Saving on health insurance costs
is challenging if you’ve recently left a job; that is, unless you consider using the benefits of COBRA
as well as your health savings account
. Federal laws have been passed over the years to make sure that you get the most bang for you buck insurance-wise, so why not take advantage of the benefits that have been laid out for you?
What is COBRA?
COBRA is also known as the Consolidated Omnibus Budget Reconciliation Act of 1985. It was created to allow you to continue group coverage even after your job ends for a period, usually up to 18 months. While you still have to pay your premium during this period, you get access to coverage that can keep you from having to find some other type of protection plan.
How Can COBRA Help You Save?
Taking advantage of COBRA can contribute to your goal of saving on health insurance costs if you’re between jobs by giving you access to group health coverage. Insurance coverage from an employer comes at a reduced price to you, which can help you save a ton per month. On the other hand, if you take that 18-month period to purchase your own coverage, you could end up spending hundreds more per month for significantly less protection.
What about My Health Savings Account?
If you were contributing to a health savings account when you departed from your job, COBRA also protects your HSA so that you don’t have to lose those funds. Additionally, if you receive unemployment benefits, you can still contribute to your HSA and use those funds as if you were employed. This benefit works out well because you will still benefit tax-wise at the end of the year from the pre-tax contributions you made while still employed.
There are a number of ways to go about saving on health insurance costs. But it’s good to know that taking advantage of COBRA and your health savings account can help you save even if you’ve lost your job.
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