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Losing my dependent status – what are my options?

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

Dear COBRA Insurance Benefits –

I am on the verge of losing my dependent status and have no idea what to do for health insurance. I have been on my parent’s insurance plan forever and am currently unemployed so there is no option for insurance from a company. The plan I have with them is really comprehensive, it seems like everything is included. But with that said I hardly ever use anything unless I randomly catch something. I would say I have used the coverage probably once in the last three years. I am pretty healthy in general.

With that said I am not willing to totally give up all coverage and cross my fingers that nothing happens. I want to have some type of coverage so that I am protected. What options should I be considering? Is COBRA a good choice?

Thanks

Dear No Longer A Child

Losing your dependent status can be a tricky time and it is hard to know what type of plan to sign up for. The good thing is that you are one step ahead of the pack since you are already thinking about your health insurance and know how important it is to keep some sort of plan in place. Based on what you shared, here are some potential options for you ranging from least expensive to most expensive.

  • Catastrophic or High Deductible Insurance: This is going to be the least expensive option when it comes to health insurance but will also provide the least amount of coverage. A catastrophic plan and high deductible plan are similar and basically will only cover emergency medical needs. For any other medical need you will need to pay out of pocket for the treatment. However it does ensure you are safe in case of anything serious and can be very affordable, starting at around $40 monthly.
  • Private Individual Insurance Plan: The next option if you want more comprehensive coverage will be a private individual policy. These plans more closely resemble regular employer sponsored plans and can be very affordable for someone who is young and healthy. In fact they start at around $100 monthly and can include pretty comprehensive coverage.
  • COBRA Insurance: Finally the last option, but definitely most expensive, is COBRA. With COBRA you would be able to continue to use the same health insurance plan you have with your parents for up to 36 months. The catch is that you must pay the entire premium plus 2% to keep the plan. On average this runs about $400 or more monthly. To find out exactly how much COBRA would cost for you, it is necessary to contact the plan administrator and tell them you are interested in signing up for COBRA and need to know the costs. Likely this will trigger them to send you an enrollment letter which will state the exact cost of the plan.

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.

COBRA Health Insurance Laws

Posted on: June 13th, 2012 by Cobra Insurance Guide

Many of the questions we receive on a daily basis are regarding the current COBRA health insurance laws and how they affect people who have been laid off, quit their job, or retired from their job. The COBRA insurance laws have actually not changed much since they were passed in 1986 and still serve the same purpose to protect individuals and families from suddenly being without health insurance.

Under the COBRA health insurance laws people who lose, quit, or retire from their job without the presence of gross misconduct AND who meet certain government requirements can elect to continue the exact same health insurance plan with COBRA. This benefit extends to their family members as well. However the main difficulty for most people with the COBRA laws are that you are required to pay the entire cost of the health insurance plan. Since most employers pay anywhere between 50%-90% of the cost, this is a significant expense especially for someone who has just lost their job.

The three conditions that the government sets out in the law are known as qualifying plan, qualifying event, and qualifying beneficiaries. Qualifying plan refers to the type of health insurance plan the person had when they had a job. In most cases any plan that covered 20 full time employees will be eligible for federal COBRA laws. The second requirement, qualifying event, is how the person lost their insurance coverage. For employees this can be quitting, retiring, or losing their job without gross misconduct. For family members this could be that the covered employee lost, quit, or retired from their job, due to a legal separation or divorce, or because a dependent loses their dependent status. The final requirement, qualifying beneficiaries, is who else is eligible for coverage. In most cases anyone who was covered under the health plan can continued to be covered with COBRA insurance laws.

Find Your Own Health Insurance

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

For anyone who is unemployed, self employed, or works somewhere that doesn’t offer medical insurance, finding your own health insurance can be an extremely daunting task. There are hundreds of companies offering plans of all different types at all different price ranges. How do you choose a plan that is right for you and what options do you have? Use these resources to help you find a health insurance plan that is right for you.

  1. Government Uninsured Help Line: The Foundation for Health Coverage Education created this free helpline to aid people who are looking for health isnurance and want to know what options they have. Make sure you have information available about your income, number of family members, ages, and health conditions ready so they can provide you with all of your options. You can call them at 800-234-1317 or visit their website at Coverage For All
  2. Government Healthcare Website: To help people navigate the difficult web of health insurance options, the government created a website, HealthCare.gov, that helps connect people with private insurance companies and governmental insurance options. By entering information about where you live, your health conditions, family members, ages, and income, the site gives you a number of options for health insurance in your area.
  3. COBRA Insurance: If you lost, quit, or retired from your job in the last 60 days you are probably eligible for COBRA health insurance. With COBRA you can keep the health insurance plan you had with your employer for up to 18 months in most cases. In addition, many states offer state run COBRA insurance if you don’t qualify for the federal plan.
  4. Free Health Insurance Quotes: Similar to the government website, you can also get free quotes through a private health insurance company to learn about your options. Sometimes these sites are more up to date than the government sites and offer more accurate prices.
  5. Preexisting Condition Insurance Plans: If you have a preexisting condition and have difficult qualifying for health insurance, you may be able to sign up for a PCIP, or preexisting condition plan. These plans cover people who have preexisting conditions and can’t find health insurance.

Lost Your Job? Are You Considering COBRA Insurance?

Posted on: May 24th, 2012 by Cobra Insurance Guide

Stethoscope and Pen

For people who lost their job or were laid off, COBRA insurance is usually an option to continue health care for the employee and their family.

In most cases if your former health insurance plan covered 20 employees or more and the company is still in business, you can qualify for COBRA insurance under the 1986 federal law. This coverage lasts for 18 months in most cases and came about to protect people in your situation from suddenly going without health insurance coverage.

According to the federal COBRA law, when you are laid off your employer has 14 days to notify you in writing about your rights under COBRA. From there, you have 60 days to decide if you want to enroll in the coverage. If you do not sign up within that 60 day period or pay the premium, you will lose the right to coverage.

COBRA Insurance and Health Reform

In March of 2012, the Patient Protection and Affordable Care Act was passed by Congress to help ensure that more Americans have access to affordable health insurance and ensure people can actually get coverage. Under this law in 2014 there will be state run health insurance exchanges that people can use to purchase affordable health care. This law will not change COBRA insurance coverage in anyway, but it will likely decrease the amount of people who choose to use COBRA insurance.

The Cost of COBRA Insurance

With COBRA you get the exact same coverage that you had with your employer but the main difference is that you are responsible for paying the entire premium plus a 2% administration fee. This cost for most people is very expensive and normally runs over $1000/month for families. This is because most employers pay for up to 90% of the health insurance costs of their employees.

What Can I Do if COBRA Insurance is Too Expensive?

Most people can’t afford COBRA insurance. It is very expensive and most people who need it just got laid off so that kind of expense is unimaginable. According to some statistics COBRA insurance can eat up 60-70% of someone’s unemployment check leaving almost no room for other expenses. However luckily there are other options to explore if you can’t afford COBRA insurance. If you can’t afford COBRA insurance you should explore state and federal insurance programs like Medicaid and CHIP, private insurance which is normally much less expensive (you can get a quote below), and community health programs that provide free and reduced cost care.

PCIP Preexisting Condition Insurance Plan

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

The Affordable Care Act was passed in 2010 and this law created Preexisting Condition Insurance Plans which helps people get health insurance who have been denied coverage based on a preexisting condition.

PCIPs are administered by your state government or the federal government through the Health and Human Services Department. It is meant to be an interim health insurance option for people who have been without insurance for 6 months, have been denied coverage, or have a preexisting condition. In 2014 with the passing of the Affordable Care Act, everyone will have access to health insurance and PCIP plans will no longer be needed. However in the mean time they provide health insurance to people who otherwise would be uninsured.

Preexisting Condition Insurance Plans

A PCIP plan will cover most things a regular health insurance plan would cover including doctor visits, hospital visits, prescription drugs, and more. Your preexisting condition will not be denied treatment with the covered. Additionally, PCIP plans shouldn’t charge you a higher premium due to the condition.

Eligibility for PCIP Insurance

  • Are a US citizen, national, or reside in the US legally
  • Have been without health insurance for six or more months
  • Are not currently insured even if your plan doesn’t cover your condition and are not in a state high risk pool
  • Have a preexisting condition or have been denied health insurance due to your condition

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.

COBRA Health Insurance

Posted on: March 21st, 2012 by Cobra Insurance Guide

cobra-insurance-copaymentsCOBRA health insurance is a term that is often heard in workplace conversations, on the television, and in unemployment circles but few people can actually tell you what COBRA health insurance really is. In fact many Human Resources workers who deal with workplace health insurance daily, struggled to say much more about COBRA health insurance than it is something people can use after losing their job. COBRA health insurance actually involves a lot more than that and it is extremely important for anyone who recently lost, quit, or retired from their job to fully understand it. It can also benefit anyone going through a divorce or who will soon lose their dependent child status.

What is COBRA Health Insurance?

COBRA health insurance is a law, not an insurance plan, that was passed by the United States government in 1986 to prevent people from suddenly losing their health insurance. The law states that if they choose to employees and their families can continue to use their prior employer’s group health insurance plan for up to 18 months in most cases. The health insurance plan under COBRA health insurance will stay exactly the same but the major difference will be that the employee must pay the full cost. Normally this is at least double what the employee paid while employed since most companies subsidize health insurance costs.

Who Can Use COBRA Health Insurance?

Under the COBRA health insurance there are three conditions that must be met in order for an employee and/or their family members to qualify for COBRA – qualifying plan, qualifying event, and qualifying beneficiaries. The first condition known as qualifying plan refers to the type of group health insurance plan that the employee had while employed. In most cases the person will qualify for COBRA health if the plan covered at least 20 full time employees or their part time equivalents. The second condition, known as qualifying event, refers to why health insurance is being lost. Most people qualify for COBRA health insurance under this condition if they quit, retired from, or lost their job without serious misconduct. Spouses can also qualify if they are losing their health insurance due to death of the covered employee or divorce from the covered employee. Adult children who are losing their dependent status, normally at 26, can also qualify. The final condition, qualifying beneficiaries, refers to who is eligible to get COBRA health insurance. In most cases anyone who was covered on the plan before can be covered with COBRA.

Are There Less Expensive Alternatives to COBRA Health Insurance?

There very well be more affordable alternatives to COBRA health insurance depending on your health insurance needs. For people who are relatively healthy, private insurance plans are usually much more affordable than COBRA. In fact on average people save about 65%, or over $600 monthly, by choosing a private individual or family plan. The best way to learn about private health insurance options is to get a free quote and explore. It takes about 1 minute to get a quote and start learning what is out there.

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.

 

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