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Going to be laid off and worried about health insurance?

Posted on: October 31st, 2012 by Cobra Insurance Guide

cobra-insurance-copayments

Many times people are surprised by job loss and don’t have the time to plan their next move. But for some people they know when job loss is coming and have time to plan ahead. It is important for people in this situation to have a strong plan in place for their health insurance coverage before they lose their jobs. Make sure to take these steps before the last day of your health insurance coverage.

Preparing for Insurance Loss

  • Know Your Health Insurance End Date: This may seem like an obvious step but many people forget to find out exactly when their employer health coverage will end. Depending on your company and its policies, your insurance could end the last day of your employment, the last day of the health plan billing cycle, or you could have a grace period of 2-8 weeks provided by your employer. Knowing this day is critical so you understand when to start your new plan.
  • Negotiate Your Benefits Package: Many people negotiate benefits packages when they are accepting a new job, but you should also try to negotiate when you are losing your job. Many companies have the ability to offer severance or job loss packages that may include health benefits. This could include the company paying your COBRA insurance costs for weeks or months after losing your job. Always ask about the possibilities – there is nothing to lose.
  • Know Your COBRA Insurance Options: The first step in determining what insurance plan you will use after job loss is finding out if you qualify for COBRA insurance and how much it will cost. For people who do qualify for either a state or federal COBRA plan, this could be a viable option for health insurance coverage.
  • Consider Private Insurance: In addition to finding out if you qualify for COBRA, you should also fully explore your options for private health insurance. Private health insurance plans can usually offer a lower cost option to COBRA and for people who are generally healthy, almost the same coverage. You can get a free quote when you explore plans which can help you price out plans and understand your options.
  • Explore a Spouse’s Plan: Find out if you qualify for your spouse’s plan and what kind of coverage it offers. Since employers subsidize so much of health insurance costs, if your spouses has a plan it can offer the most cost effective option. However always make sure to inquire about the open enrollment date and when new participants can be added to the plan. Some companies have very strict policies and spouses can only be added during open enrollment once per month.
  • Consider Government Plans: The last thing to explore is if you or any family members can qualify for a government or community plan that is low cost. In most states children are eligible for reduced cost health care. Having children on a state plan can significantly reduce the overall costs for the family. Additionally depending on your health condition and age, you may qualify for other plans in your state.

How Many Days Do I Have to Work to Qualify for COBRA insurance?

Posted on: April 30th, 2012 by Cobra Insurance Guide

reduce cobra insurance costsDear COBRA Insurance Benefits,

I recently got a new job, but found out that I am going to have to leave the job due to family issues. However, I really need the health insurance from the new job and will need to continue it on COBRA since my husband has a pretty serious health condition. I have only worked there for 30 days and am curious about how long I need to work at my company to qualify for COBRA insurance? Is there a minimum amount of time? Could I get COBRA insurance already? Thanks.

In Need of COBRA Insurance

This is a great question and actually one that many people have recently emailed us about. The answer is actually surprisingly simple. If you are currently getting health insurance from your company and meet the COBRA insurance requirements, then you qualify for COBRA insurance. That applies to both your coverage and your family’s COBRA coverage assuming you meet the requirements.

So what if you don’t currently get health insurance from your company? Then you are not going to be able to get COBRA insurance yet. Many companies have between a 30-90 day window before health insurance starts for a new employee. If you are still in that window then either you have to wait until your health insurance starts or will not qualify for COBRA.

Is COBRA Insurance Right For Me?

Posted on: April 25th, 2012 by Cobra Insurance Guide

COBRA Insurance and Taxes

COBRA insurance is a great health insurance option for people who are absolutely sure they will soon have health insurance again, have preexisting medical conditions that make it difficult to qualify for other health insurance plans, or can financially afford to keep their current plan and benefits. However, for most of us, COBRA insurance many not be the best option and there may be alternatives that can provide us with similar coverage for much less money.

To better understand is COBRA health insurance is right for you, let’s first take a look at who is eligible for COBRA insurance.

Qualified Employee Beneficiary Qualifying Event Cost Term

Previous employer had at least 20 employees

Previous employer had a health insurance plan

Previous employer was not the federal government

Employee, spouse, and/or dependents Voluntary (quitting, retiring) or involuntary termination of employment OR reduction in work hours 102% of the entire health insurance premium 18 months
Employee, spouse, and/or dependents Termination OR reduction of work hours along with a disability certified by the Social Security Administration 102% of the entire health insurance premium for first 18 months, 150% for next 11 months 29 months
Spouse or dependent children Death of employee, Divorce or legal separation, Loss of “Dependent Child” status, OR Employee enrollment in Medicare 102% of the entire health insurance premium 36 months

Once you know if you are even eligible for COBRA, the next decision is whether or not COBRA insurance is right for you. Generally you should consider COBRA health insurance if you are:

  • Have a preexisting condition
  • Have been declined from health insurance plans in the past
  • Are pregnant or plant to become pregnant in the near future
  • Take expensive prescription medications
  • Will be undergoing a medical procedure in the near future
  • Normally need lots of medical care

On the other hand, there are many instances when COBRA insurance may not be right for you. Those include:

  • Families and individuals in good health
  • People who will need insurance longer than the term given with COBRA
  • People who can’t afford COBRA or want a cheaper option
  • People who know they will soon be employed and want a cheap, short term option

Additionally it is always important to remember that you can make individual decisions for different family members depending on your needs and budget. If only one family member has a preexisting health condition, you may sign them up for COBRA insurance and then sign the rest of your family up for a more affordable individual health insurance plan. COBRA insurance can be used for the entire family or just particular members. It can also be dropped at any time.

California COBRA Insurance – Cal COBRA Insurance

Posted on: April 2nd, 2012 by Cobra Insurance Guide

Stethoscope and Pen

Knowing the difficulty of job loss and health insurance, following the federal government’s lead, California created it’s own mini COBRA insurance plan known as California COBRA insurance, or Cal-COBRA insurance. This plan, much like federal COBRA insurance, was set up to make sure people didn’t suddenly go without health insurance after they quit, lost, or retired from their job. In addition the law protected people losing health insurance from divorce or from losing dependent status as well. Under both the federal and Cal COBRA insurance laws, people have the option to continue to use their employer sponsored health plan for up to 18 months in most cases if they meet the requirements in the law. That means that they could keep the exact same doctors, prescription plans, co-pays, and deductibles. The catch? Under COBRA and Cal-COBRA, the individual or family who signs up for COBRA is responsible for paying the entire premium without any subsidy from the employer. In addition, they also must pay a 2% administration fee.

Understanding Federal COBRA Insurance

Under the federal COBRA insurance bill, in order to qualify for COBRA insurance you must meet three requirements known as qualifying plan, qualifying event, and qualifying beneficiaries. The qualifying plan refers to the type of health insurance plan that you had while you were employed. For federal COBRA insurance, this plan must have covered at least 20 employees to be eligible. The second requirement, known as qualifying event, refers to the way that you lost health insurance coverage. In most cases if you lost, quit, or retired from your job and there was not gross misconduct you will qualify. This also includes spouses who are losing coverage due to divorce and children who are losing health insurance due to losing dependent status. The final criteria, qualifying beneficiaries, refers to who is able to elect COBRA insurance. In most instances anyone who was on the health insurance plan will be able to be on COBRA insurance.

Understanding Cal COBRA Insurance

Cal COBRA was created to make sure that more people in the state of California could qualify for COBRA insurance if they wanted it. Essentially what the Cal COBRA law does is extend the benefits to people working at companies with between 2-19 employees. It also at times extends beyond typical COBRA insurance coverage and may last up to 36 months. Like federal COBRA insurance, an individual or family must pay the entire cost of the health insurance plan plus a 2% administration fee to keep coverage.

Cheaper Options to COBRA Insurance and Cal-COBRA

Since COBRA insurance can be so expensive, usually around $1000 for a family of four, it is important to consider other health insurance plans that may be more affordable. This is especially true if you and your family are relatively healthy. Many people find by looking at private health insurance cost they can save up to $600 a month on their health insurance costs. The easiest way to find out what you might qualify for – get a free health insurance quote online and explore your options. It will show you what plans you are eligible for and their costs.

Arkansas COBRA Insurance

Posted on: March 31st, 2012 by Cobra Insurance Guide

Arkansas COBRA Insurance

For anyone who recently lost, quit, or even retired from their job figuring out what to do next for health insurance can be a tricky decision. Moreover, COBRA insurance legislation is confusing and many times it is hard to understand what options are out there. Understanding federal COBRA insurance, Arkansas COBRA insurance, and private health insurance plans is important so that you can make a decision for your family’s health insurance and budget.

Option 1: Federal COBRA Insurance, Cost for a Family: $1000+

The first option for individuals or families looking for health insurance coverage after job loss or retirement is COBRA insurance if they meet the federal requirements. Under the federal requirements most people who worked at a company with at least 20 employees on their health insurance plan will be eligible as long as they didn’t lose their job due to gross misconduct. Under the federal COBRA insurance plan you can keep the exact same health insurance plan that you had with your employer but you must pay the full cost for it. The full cost is what you normally contributed to your health insurance plan plus anything your employer paid. For most people this is between 60-90% of the health insurance cost. On top of paying the entire premium, you also must pay a 2% administration fee. For most families this ends up being $1000 or more monthly.

Under COBRA insurance you keep the exact same health insurance plan you had when you were employed for up to 18 months in most cases. It is meant to help you in the interim and make sure you do not go without health insurance. The coverage extends to your family and other dependents who were on your health insurance plan. Furthermore it can also extend to people losing insurance due to divorce or adult children losing coverage due to age.

Option 2: Arkansas COBRA Insurance, Cost for a Family: $1000+

The second option for someone in need of health insurance after job loss is Arkansas COBRA insurance. The state of Arkansas created its own COBRA insurance program for people who don’t qualify for the federal plan. The cost of Arkansas COBRA insurance is just about the same as federal COBRA because you will be responsible for the entire premium on your own. In addition there is a 2% administration fee. Arkansas COBRA insurance normally allows you to keep your employer sponsored health insurance plan for up to 18 months.

Option 3: Private Family Insurance Plan, Cost for a Family: $400+

The last and most affordable option in most cases is choosing a private individual or family health insurance plans. These plans are offered by private companies and normally are much less expensive than COBRA for similar coverage. The reason these plans can be so much cheaper is because they are only covering your family, not everyone you work with. If you are healthy that means a lower risk for the insurance company and therefore a lower rate. Most people find they can save over $600 a month by choosing a private health insurance plan. To find out what your options might be, you can get a free health insurance quote.

Insurance After COBRA

Posted on: March 16th, 2012 by Cobra Insurance Guide

insurance after COBRACOBRA insurance only lasts 18 months for most people and when the end of your COBRA insurance is quickly approaching, many people begin to think about insurance after COBRA.  There are many options for insurance after COBRA but it is important to think through all the options carefully to make sure you choose the right plan for you and your family.  We always recommend starting by getting a free health insurance quote so you have a general idea of what options are out there for you and your family. Taking 5-10 minutes to fill out a quote will open your eyes to what is on the market, the price ranges, and what you should be thinking about for insurance after COBRA.

Option 1:  Private Health Insurance

Then most common insurance that people get after COBRA is private health insurance.  This is normally through a major company and there are health insurance plans of all types depending on your health needs and budget.  The most comprehensive plans available are private individual and family plans which generally offer plans that are very similar to what you had on COBRA insurance.  There are HMOs and PPOs available as well as varying levels of co-payments and deductibles depending on your needs.

The second most popular type of private health insurance plan that people get after COBRA is a short term health insurance plan.  These plans normally have high deductibles and are meant to help cover you in the short term.  These plans can last anywhere from 1 day to about 1 year and normally only cover emergencies.  They are built to help keep you covered in between jobs or other health insurance plans.

The other popular insurance after COBRA is catastrophic health insurance plans which only cover emergencies.  These plans tend to be very inexpensive and only cover medical emergencies.  The deductibles are generally very high and they do not include doctor visits or other care in most cases.  They usually are very affordable since the coverage is minimal.

Option 2:  Government Health Insurance

It is always wise to look into government health insurance as an option for insurance after COBRA.  Many times adults and especially children can be covered by government health insurance plans is your income is below a certain level.  These plans can be offered by the federal or state government.  In addition if you are at or near to retirement age, there is government health insurance you can use.

Option 3:  Health Insurance From New Employment

Finally you can look for a new job that includes health insurance.  Many people do not remember to ask about health insurance when looking at a job but it should be an important consideration.  Even if the job isn’t exactly what you are looking for in the long term, taking a job that has health insurance, especially if you or someone in your family has a preexisting condition can be a smart move.  There are many part time jobs that come with health insurance like working at Starbucks, driving a school bus, or serving as in aid in a public school.  Look at all your options.

 

COBRA Insurance Cost Reduction

Posted on: March 14th, 2012 by Cobra Insurance Guide

reduce cobra insurance costsLosing or quitting a job is extremely stressful.  For most people money is tight and they are worried about their financial future.  And then they find out how much COBRA insurance costs and in many cases begin to panic.  Rightfully so.  COBRA insurance costs over $1000 monthly for most families and after losing a job this is an expense that most people simply can’t afford.  Luckily there are many other options out there that can help with COBRA insurance cost reduction.

Before we look at ways to reduce the cost of COBRA insurance, let’s first look at why COBRA insurance is so expensive.  In any workplace there are people are varying ages with varying degrees of health needs.  There likely are people who need constant medical care and may have ongoing, serious medical needs, and people who are generally healthy and hardly ever use their health insurance plan.  A group health insurance plan at an employer has to cover all people which drives the costs up.  Since the health insurance plan inevitably will cover people with preexisting conditions or at risk for expensive and serious health conditions, the health insurance plan is expensive.  If you are generally healthy, likely there are much more affordable options out there for you and your family.  And even if you are not generally healthy, there still may be ways to reduce the cost of COBRA insurance.

1.  Consider COBRA Insurance Alternatives to Save Up to 65%

Many people think that private health insurance plans are extremely expensive due to the news and all the coverage about the outrageous expense of health insurance.  However, for people who are in generally good health, health insurance plans can be affordable and are almost always much cheaper than COBRA insurance.  The easiest way to learn what other health insurance options are out there is to get a free quote that will provide you with multiple options from multiple companies at all price points.  Exploring these plans gives you an idea of how much a private health insurance plan would cost and what it would include.  Most people find that they can get almost identical coverage for about 65% less (or over $600 less per month) by choosing a COBRA insurance alternative.

2.  Choose COBRA ONLY for Family Members with Preexisting Conditions or Serious Health Needs

Many times if someone in your family has a preexisting or serious medical condition, you automatically think that COBRA insurance is your only option.   You are partially right.  In most cases, COBRA insurance will be the most cost effective health insurance plan for the person with the preexisting condition since they likely won’t qualify for other health insurance plans.  However, that doesn’t mean that the whole family needs to sign up for COBRA insurance.  You can choose to only have the person with the preexisting condition on COBRA and sign everyone else up for a less expensive health insurance plan.  This is possible whether or not the person with the preexisting health condition is the former employee or not.  It is possible to just keep a spouse or child on COBRA and move the rest of the family to a new plan.

 

COBRA Insurance Laws

Posted on: March 12th, 2012 by Cobra Insurance Guide

COBRA Insurance and RetirementPeople have lots of questions about COBRA Insurance laws and how they impact their choices for health insurance after losing, quitting, or retiring from a job.  There are two types of COBRA Insurance laws that people are interested in.  First, people want to know about the actual federal COBRA insurance law that lays out eligibility and who can sign up for COBRA insurance.  Secondly, people want to learn about COBRA insurance laws regarding what employers must do.  We will cover both subjects in this blog posting.

First, let’s take a look at the COBRA insurance laws for eligibility that were laid out in the 1986 federal COBRA insurance law.  There are three basic categories laid out in the law that determine who is eligible for COBRA insurance – the type of employer sponsored health insurance plan, the event that caused someone to lose coverage, and the people who are eligible for COBRA coverage.

1.  Qualifying Plan: This term refers to the type of group health insurance plan your insurer had.  Under the COBRA insurance laws that plan must cover at least 20 employees, or their part time equivalents, for the employee or their family members to be eligible for COBRA insurance.

2.  Qualifying Event: This refers to how the employer sponsored group health insurance coverage was lost.  Many people think that you are only eligible for COBRA insurance if you are laid off, but in fact you are also eligible under the COBRA insurance laws if you quit your job or retire from your job.  Moreover, there are many events that can make family members eligible for COBRA insurance.  Some examples are divorce from the covered spouse (even if they continue working at the company), death of the covered spouse, and losing dependent child status.  The qualifying event is also an important piece of the law because it outlines the length of time that people are eligible.  The general rule of thumb is that COBRA insurance coverage lasts for 18 months but in some cases like divorce for example, benefits can be extended to 36 months in many cases.

3.  Qualifying Person:  The last piece of the federal COBRA insurance law refers to who is eligible to continue health insurance coverage with COBRA.  Basically what the law states is that anyone who was covered during employment can be covered with COBRA.  This generally includes the covered employee, spouse, and dependent children. For a retiree, this would include the retiree, retiree’s spouse, or retiree’s dependent children.

Now let’s take a look at the basic COBRA insurance laws for employers.

  • You must notify employees and spouses that would be covered through the COBRA program of their right to COBRA insurance coverage at the start of the health insurance plan.
  • You must notify employees and other covered beneficiaries within 14 days of the date that the covered individual(s) qualifies for COBRA insurance. The company is required by law to provide all the necessary forms and documents. Normally this should be through certified mail or in person with a signed form acknowledging they received it.
  • You must keep accurate records that you properly notified the employees of changes during the policy and at the time of COBRA qualification.
  • You must track COBRA election periods and the length of time that an employee has been enrolled in coverage under the law.
  • You must provide invoices to COBRA informing them of the premium payments and any short bill payments. These must be balanced and recorded.
  • You must keep all records of correspondence regarding COBRA coverage.
  • If your plan changes, you must notify COBRA, through the entire time of coverage.
  • You must notify the employee when insurance benefits terminate.

 

COBRA Insurance Alternatives

Posted on: March 7th, 2012 by Cobra Insurance Guide

Losing or quitting your job can be very stressful and on top of that, many people face making difficult decisions about health insurance. While the easiest option for many is to sign up for COBRA insurance if it is an option, upon deeper examination many people learn that COBRA insurance can be quite expensive and may in fact be out of reach for their family. Even if it is not out of reach, an average healthy family spends $8000 extra annually by choosing COBRA insurance. Understanding what other options are out there can help both individuals and families better understand the best choice for their health care and budgetary needs.

Option 1: Individual/Family Health Insurance Plan, Average Monthly Rate: $420
Individual health insurance plans, sometimes called family health insurance plans, are health insurance plans offered through major companies like Blue Cross and Kaiser, that are essentially the same as an employer provided health insurance plan. They are the most comprehensive plans on the market in most cases and can be surprisingly affordable for families and individuals, especially when there are no major health concerns. Many people wonder why these plans can be so much cheaper than COBRA and the reason is actually relatively simple. Under group health insurance plans at employers, the health insurance plan covers everyone employed, whether they are completely healthy, have major medical issues, or are at high risk for major medical health concerns. Due to this fact, group health insurance plans are more expensive because they cover both the healthy individual, who is relatively cheap to insure, and the not so healthy individuals, who are very expensive to insure. When you are relatively healthy, you can get a very good rate on health insurance because you are low risk to the insurance company. It is always worthwhile to get a quote for health insurance before choosing COBRA because many people find that they can save up to 65% monthly by choosing a private plan. You can get a quote below.

Option 2: Short Term or Catastrophic Insurance, Average Monthly Rate: $200
For people who know that they will be employed soon and have health insurance, or for people who only want minimal health insurance because they rarely go to the doctor, short term and catastrophic health insurance plans can be very inexpensive. These plans are normally minimal with high deductibles but they protect you in case anything major happens. Most people find these types of plans for under $200 monthly and sometimes as low as $75 if they are willing to have a high deductible.

Option 3: COBRA insurance, Average Monthly Rate: $1,084
Under COBRA insurance the average family pays around $1100 to keep the exact same coverage as they had with their employer. Many times for people with preexisting conditions or major medical needs, COBRA is the cheapest and best option, since health insurance is expensive and sometimes prohibitive for people with serious health needs. However, if you do not have serious health needs, another health insurance plan will likely be much more affordable and can still provide excellent coverage.

COBRA Insurance and Co-Payments

Posted on: March 5th, 2012 by Cobra Insurance Guide

cobra-insurance-copaymentsCOBRA insurance is a confusing topic and it can be difficult to sort through all the health insurance jargon and options available to you. This is made even more difficult for most people since they have just lost or quit their job. However, understanding your health insurance options, including COBRA insurance, doesn’t have to be difficult. Once you understand the basics and what you should be looking for, the decision will get much clearer and be much easier for you and your family.

One major part of this decision and a question we hear frequently from readers is the question of co-payments and how co-pays are affected by signing up for COBRA insurance. We are also often asked how co-payments should factor into a decision to choose a COBRA insurance alternative.

First, let’s look at exactly what a copay, or co-payment, actually is. A copay is an amount predetermined by the insurance company that you must pay up front for medical services. For example, you may have a copay of $25 for doctor visits, $50 for specialists visits, $100 for emergency room visits, $10 for generic prescriptions, and $20 for name brand prescriptions with your health insurance plan. Co-payments vary between insurance companies and between services. Once you pay the copay in most cases, the rest of the cost is covered by the health insurance company. Health insurance companies started using copays to share some of the medical cost and also to prevent unnecessary medical treatment .

For COBRA insurance, copays will remain exactly the same as they were when you were employed due to the fact that COBRA insurance simply continues the previous insurance that you had. That means that if you are used to paying $10 for all prescriptions, you will continue to pay $10 with COBRA insurance. If the health insurance co-payments change at your previous employer, they will also change for you.

When looking at alternative health insurance plans to COBRA insurance, which can cost over $10,000 annually for families, many people immediately shy away from any plan with high co-payments since they aren’t used to them. But in many cases, even if you take a higher copay cost, you can still save thousands of dollars by choosing a private insurance plan. Here’s how.

Let’s imagine that by signing up for COBRA insurance, your healthy family of four will spend $1000 a month for health insurance. Included in that plan are co-payments of $10 each for prescriptions and all doctor visits. On average your family visits the doctor 20 times a year and fills 5 prescriptions. (Likely your family visits the doctor MUCH less than this!) That means with COBRA insurance, you would pay $12,000 annually in premiums and an additional $250 on copays. That means your total COBRA insurance cost for the year is $12,250.

Now let’s imagine that your family finds a private health insurance plan that costs $425 monthly (based on the national average for insurance costs) but it comes with co-payments of $100 for prescriptions and doctor visits. This number is much higher than the national norm but will help show how much you can save even with high co-payments. Given your family visits the doctor 20 times annually and fills 5 prescriptions, you will spend a total of $2500 on copays. When we add that to the annual cost of the premium, $5,100, the total health insurance cost is $7,600. You are still saving $4,650 by using private health insurance!! And that is with extremely high co-payments and more doctor visits than most families have.

Want to find out how much you can save with private health insurance? Get a free, no obligation quote and compare that to the cost of COBRA insurance below.

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