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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.

Federal Employeees and COBRA

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

Nurse and Patient

When the COBRA laws were passed in 1986, federal employees were exempt from being able to continue their health insurance after job loss with COBRA. However this did not mean that federal employees who used the Federal Employees Benefit Health plan (FEHB) had no way to continue their coverage. In fact, the government created it’s own COBRA like policy – the Temporary Continuation of Coverage, within the FEHB to protect employees in a similar way.

What is the FEHB Continuation Plan?

The portion of the Federal Employee Health Benefit plan that provides continuation is known as Temporary Continuation of Coverage(TCC). Under this plan qualifying employees can enroll in TCC after job loss and they can also extend coverage to their spouses and children. Also similar to COBRA in order to maintain this coverage, employees must pay the full premium plus a 2% admin cost. Additionally this coverage lasts for 18 months for the employee and up to 36 months, or 3 years, for the spouse and children depending on the qualifying event.

Signing up for Temporary Continuation of Coverage

Similar to COBRA there are strict rules and guidelines for signing up for TCC. You have just 60 days to apply for TCC and failure to complete the application form within this window means you are ineligible for coverage. In addition, once you sign up for TCC the benefits are retroactive back to the day you lose coverage. You can get the forms for signing up for TCC through the Human Records department of the federal office you work in.

What is a qualifying event for TCC?

There are multiple qualifying events for TCC that closely resemble the qualifying events of COBRA regulation. For employees the only qualifying event is separation from federal service without the presence of gross misconduct. The agency you worked for is responsible for determining whether or not something is actually gross misconduct.

For children there are additional qualifications for TCC including:

  • Turning 26 years old
  • Loss of status as a natural child, foster child, or stepchild
  • Death of the employee in qualifying instances

Additionally for spouses there are other conditions that can trigger TCC coverage including:

  • Divorce
  • Annulment
  • Death of the covered employee

Keeping an Ex-Spouse on Your Health Insurnace

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

COBRA and divorce

Recently there has been a lot of press here in California about the intricacies of the laws and policies around divorce and health insurance. It all started when the ex-spouse of a city employee in Belmont decided to sue the town for not informing him he had the option to stay on his ex-wife’s health insurance plan. Instead this man signed up for COBRA insurance and ended up paying $524 a month for his coverage, which cost him over $18,000 in the long run. He is hoping to recuperate the difference in cost between the two plans and likely will win. Someone won a similar case just two years ago.

So what does that mean for you? Well it depends on the policy that your ex-spouse has. The first thing to do – ASK. Call the health insurance company or Human Assets department of your ex-spouse’s company and ask if there is an option in the insurance policy to cover spouses after divorce. This isn’t common, but some companies do offer such plans. And if the company does offer it, immediately find out how much it costs. Some companies will continue to subsidize the cost, but some will not. If they will not then you will pay basically the same as you would for COBRA and perhaps more than for a private plan.

Another rising trend among people getting divorced but concerned about health insurance is actually to stay married or only legally separate depending on the state they live in. For people with expensive medical needs or preexisting conditions, health insurance can be a major concern during divorce. So more and more people are staying married in amicable separations so that one spouse can continue to receive the medical care they need. While this normally begins as a temporary situation, many couples report that they continue like this for years to avoid astronomical medical and insurance bills, as well as maintain the exact same level of care and treatment.

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.

The High Price of COBRA Insurance and Preexisting Conditions

Posted on: April 26th, 2012 by Cobra Insurance Guide

No family ever predicts that a serious medical condition will hit their family, but sometimes it happens. Families suddenly find themselves facing decisions they never expected and many times facing health insurance bills they can’t fathom. Making this situation all the more complicated is that many times in the face of serious illness, people are forced to quit their job to care for their loved ones, and that’s when COBRA insurance comes into play. For some people COBRA insurance can be an incredible option in this situation, but for others, it can quickly become more expensive than they could ever imagine. To help understand this better, let’s look at two different families in similar situations, but apt to make very different decisions.

Our first family recently found out their son had cancer and will need almost around the clock care during his treatment. His mother is happy to provide that and preparing to quit her job in order to take care of her son. Her husband is self employed and does not have health insurance. Previously the entire family used her health insurance. Unfortunately, her company recently needed to cut costs and drastically changed their health insurance plan. The HMO has a deductible of $30,000 per family per year and the premiums have skyrocketed. While she was employed, her employer continued to cover 80% of the cost. After quitting her job and looking at her COBRA election form, she learns that health insurance for her family will cost over $7500 monthly due to the lackluster health insurance plan and her son’s condition. That is over $90,000 annually plus the $30,000 deductible which they will definitely use given her son’s condition. In all, her family will spend $120,000 this year on health insurance, a number they can’t afford.

Our second family also recently found out that their oldest daughter has a serious stomach condition and will need weekly medical care. She also will need constant care at home for at least the first 6 months. Facing the same decision, the family decides that they will stay at home to care for their daughter and use COBRA insurance coverage for the 18 months. Luckily for this family, the health insurance plan they are using is very good. Even with COBRA insurance they will spend $1500 monthly for their health insurance with no deductibles and minimum co-pays. Given their child’s preexisting condition, they know this is the best rate they can get.

So what can the first family do? It wasn’t there choice for the insurance plan to change and there is no way to afford $120,000 in medical care. Right now, they have a few options to cut their costs. First, they can consider only ensuring their son with COBRA and moving the rest of the family to an individual plan. This will cut some of the costs, but probably not drastically enough. Secondly, they can look to put their son on a pre-existing condition plan, or PCIP, and look for the lowest rates available. They will not be cheap but they will likely be less than COBRA insurance. Finally, they can explore government and state insurance plans and see what their options are. Depending on the state there may be options that can help cover the costs. Another option, finding part time work with health insurance. Starbucks for example offers health insurance to it’s part time employees.

Finding Health Insurance On Your Own

Posted on: March 19th, 2012 by Cobra Insurance Guide

Finding-Health-InsuranceFor anyone who is out of work, self employed, employed without health insurance, or in need of health insurance for any other reason, there are ways to find affordable health insurance that will provide you with the coverage you need as well as the piece of mind you want. Find health insurance on your own is a very important step to take because none of us can predict when a medical emergency may strike so we always want to be prepared. If you need to find health insurance on your own, here are some options to consider.

1.  COBRA Insurance:  COBRA insurance is a solid option for anyone who previously had health insurance with their job and meets the COBRA insurance requirements.  Most people do find that they are eligible for COBRA insurance which lets you continue your previous health insurance from your employer.  What many people don’t realize is that COBRA insurance can also be used by spouses going through a divorce who were covered under their spouse’s plan, children who no longer qualify as dependents, and even retirees.  COBRA insurance usually lasts for 18 months but in some cases can be extended for 36 months.

2.  United States Uninsured Help Line:  In the United States, the nonprofit group Foundation for Health Coverage Education is dedicated to helping people find health insurance options and understand what is available to them.  Based on your age, gender, household income, and health needs they will help you understand what plans you should consider as well as if you are eligible for state health insurance plans.  You can call them at (800) 234-1317.

3.  Independent Agents:  Athough many people are nervous and intimidated to call a private agent, mostly because we are worried we can’t trust them, sometimes they are the best place to turn.  Although they usually make a commission when they sell you insurance, they are very knowledgeable about what is available, what you will qualify for, and what options you should consider.  Also remember that just because you meet with an insurance agent does not mean you have to sign up for health insurance with them.  We always recommend getting a free health insurance quote on your own first so you know what to ask and what to look for.

4.  Preexisting Condition Plans:  In 2010 healthcare reform legislation was passed that created preexisting condition plans for people with preexisting conditions.  In the past most people found that if they has a serious condition they had no health insurance options but this is no longer the case.  You must have been without health insurance for at least 6 months to qualify for this type of plan.

5.  Healthcare.gov:  Many people like to use government websites to start their health insurance search because they believe the information is accurate and unbiased, which it is mostly.  One such site for health insurance options is Healthcare.gov which will ask you to answer a series of questions and then provide you with health insurance options from private companies.  You can also do this through EHealthInsurance and start getting health insurance quotes now.

 

 

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.

Health Insurance for the Unemployed

Posted on: October 24th, 2011 by Cobra Insurance Guide

Stethoscope and PenNot having health insurance can not only be scary but extremely costly if you do end up getting sick.  However, millions of people go without health insurance everyday due to the high cost of having health insurance if you are unemployed.  If you are considering health insurance for the unemployed, here are four choices you may want to consider.

  1. Short Term Coverage:  Short term health insurance plans can be good temporary solutions for the unemployed.  They generally only work for a limited time period and only cover serious medical needs.   Most come with a deductible around $2500 and will not cover office visits or prescriptions.  They also usually do not cover any preexisting conditions.  However, the benefit is that they can cost at low as $35 monthly.
  2. Individual Health Insurance:  Individual health insurance is the health insurance that is most like typical coverage, but it comes at an extremely high price tag for the unemployed.  This can easily cost over $500 monthly if you want full insurance that covers doctor visits and prescriptions.
  3. COBRA Insurance:  If you have left your job within the last 2 months and meet the federal requirements, COBRA insurance may be a good option for you.  It will allow you to keep the same health benefits you had but you will have to pay the full cost.  This cost will be less than you would pay for similar coverage in most cases because you still get the group rate.
  4. No Health Insurance:  The final option is to keep you fingers crossed and not have any health insurance.  Although this is a very risky decisions, millions of people make it.  Due to the high costs, people go without health insurance and go to free and reduced cost clinics for care.

COBRA Insurance and Open Enrollment

Posted on: October 14th, 2011 by Cobra Insurance Guide

People who are covered with COBRA insurance usually have major questions arise during open enrollment times with their health insurance plan.  However, since under COBRA insurance you are simply continuing the exact same plan, open enrollment will be the exact same as it was when you were employed.

That means that during open enrollment with COBRA health insurance you will be able to change your plan details, such as switching from a PPO to HMO to reduce costs, add new beneficiaries, and make any other changes you desire.  One important thing to consider during open enrollment is looking at ways you can reduce costs.  This may include downgrading your plan, increasing your deductible, dropping certain enrollees, dropping vision or dental, or other things that reduce the cost of your insurance.

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