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With over 76 years of experience, The Jordan Insurance Group is an industry leader in Life Insurance strategies and Employee Benefits. We strive for excellence through our due diligence in selecting products to satisfy our clients’ needs with proven benefit designs and tax strategies. Our Team utilizes a diversified multi-level approach in preserving, protecting and growing wealth for our business and individual clients.
ERISA Exclusions and How They Impact You
ERISA, the Employment Retirement Income and Security Act, was implemented in the mid-seventies and covers a wide range of health and financial benefits for employees. The biggest benefits to most employees and retirees are the COBRA program and the HIPAA program. Both of these programs protect an employee’s access to healthcare coverage, but some exclusions do apply. COBRA, or the Consolidated Omnibus Budget Reconciliation Act gives employees the option to continue coverage after a job loss or separation. While this program is beneficial and allows employees continued access to their existing coverage, it is expensive, since the employee will need to pay both the employee and employer costs to receive healthcare. COBRA does have some exclusions or negatives you need to be aware of if you enroll after a job loss:
  • Size groups eligible for COBRA (20+)
  • Under 20 size, continuation available but not necessarily for 18 months
  • Maybe divorced spouses can continue for 36 months
Cost: Taking on both the employer and the employee premiums is expensive, and the biggest problem you'll face with COBRA coverage. While COBRA allows you to continue receiving benefits at the same level and is less expensive than an individual plan, the cost can be prohibitive for many families. Eligibility: COBRA excludes employees whose hours have been drastically cut, resulting in an automatic loss of healthcare coverage. COBRA also excludes employees who have been fired for gross misconduct; simple termination is OK, but commit a crime at work and you won’t be eligible for COBRA coverage. Time limitations: COBRA benefits are only offered for 18 months; once this period has passed, the former employee needs to seek out a different form of coverage.
William Jordan
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