What COBRA Covers
COBRA (Consolidated Omnibus Budget Reconciliation Act) allows you to continue your employer-sponsored health insurance for up to 18 months after leaving your job. However, you must pay the full premium plus a 2% administrative fee, which often makes COBRA significantly more expensive than what you paid as an employee.
COBRA Coverage Gaps
Cost: COBRA premiums average $600-$700 per month for individual coverage and can exceed $2,000 for family coverage. Without an income, these costs can be devastating.
Limited scope: COBRA only covers health insurance. It does not replace your lost income or help with other essential expenses like housing, food, and utilities.
Time limit: Coverage is limited to 18 months (or 36 months in certain circumstances). If your job search takes longer, you need an alternative plan.
How Income Protection Complements Health Insurance
PaydayShield and COBRA serve different but complementary purposes. COBRA maintains your health insurance coverage, while PaydayShield replaces a portion of your lost income.
Together, they provide comprehensive protection: COBRA keeps you insured for medical expenses, while PaydayShield helps you afford COBRA premiums and other living expenses. This combination ensures you are protected on both fronts during your transition between jobs.
Consider enrolling in income protection coverage while you are still employed. Like health insurance, it is most affordable and easiest to obtain when you don't yet need it.