COBRA and Potential Problems: What You Need to Know
COBRA is a federal law that allows employees to continue their health insurance coverage after they leave their job. However, there are a number of potential problems that can arise when you sign up for COBRA.
1. You may not receive notifications about paying your premium.
This is what happened to the individual who posted the post. They did not receive any notifications about paying their premium and thought that their coverage had been terminated. As a result, they did not make any payments and were worried that they would be dealing with collections.
2. Your employer may not invoice you for your premium.
This is another problem that can occur. If your employer does not invoice you for your premium, you will not know how much you owe or when it is due. This can lead to you missing payments and having your coverage terminated.
3. You may be responsible for paying taxes on your COBRA premiums.
If you are still listed as an employee under your employer’s health insurance plan, you may be responsible for paying taxes on your COBRA premiums. This is because COBRA premiums are considered to be taxable income.
4. You may have to pay a higher premium for your COBRA coverage.
COBRA premiums are typically higher than the premiums that you paid when you were employed. This is because COBRA coverage is not subsidized by your employer.
5. You may have to pay a lump sum payment for your COBRA coverage.
If you have not been making monthly payments for your COBRA coverage, you may have to pay a lump sum payment to catch up on your premiums. This can be a significant financial burden.
If you are considering signing up for COBRA, it is important to be aware of the potential problems that can arise. You should talk to a licensed agent to learn more about your options and to make sure that COBRA is the right choice for you.
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