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Archive for the ‘COBRA Insurance Eligibility’ Category

Ten Essential COBRA Questions

Posted on: November 5th, 2012 by Kristen Marie

looking at an insuranc policy

Understanding COBRA insurance is important for anyone whether they are employed, unemployed, insured, or uninsured. Knowing your options and the basics will ensure you are prepared in case you find yourself in a situation in the future where you have to make difficult decisions about health care and COBRA.

What is COBRA

COBRA, short for Consolidated Omnibus Budget Reconciliation Act, is a law that was passed in 1986 to let people continue to use their health insurance plan after job loss. Under this law, employees who meet the criteria for enrollment can continue to use the exact same health insurance plan they had when they were employed. In most cases it lasts for 18 months and will cost 102% of the whole premium. Additionally the benefits extend to children, spouses, and any other dependents.

Who can use COBRA

Under the law there are three conditions that must be met in order to use COBRA. First the health plan that the employee was on must cover at least 20 full time employees (or their part time equivalents) and must still be active. Secondly, the employee must have lost their insurance due to involuntary or voluntary job loss without gross misconduct. This could include quitting, being laid off, or even retiring. Finally, the person signing up for COBRA must be an eligible beneficiary which could include dependents and spouses. Additionally children and spouses can qualify for COBRA in the event of divorce, death, Medicare qualification, and loss of dependent status.

How many months can I use COBRA

In most cases COBRA insurance can be used for 18 months and it starts on the day you would have lost coverage. In some cases, COBRA can be extended to 36 months if you have a disability or second qualifying event. Additionally children and spouses can use COBRA for 36 months in the event of death, divorce, loss of dependent status, and Medicare qualification.

What happens to my insurance if I get divorced?

In most cases, as long as your spouse’s plan meets the qualifying requirement, then in the event of divorce you will qualify for COBRA for up to 36 months. It is your responsibility to inform the health insurance provider and sign up for COBRA. Failure to do this right away can result in not being eligible for benefits. In most states you are also eligible for COBRA in the event of legal separation.

How much is COBRA

Under the law COBRA insurance costs 102% of the premium. This includes the entire premium – both what you paid and what your employer paid – plus a 2% administration fee. You can usually find this amount listed on the COBRA enrollment paperwork or you can calculate it yourself.

Do my children get to use COBRA

As long as the covered employee qualifies based on the plan type, then children are eligible as well for COBRA coverage. The law and benefits extend to the entire family. If you learn you are not eligible for COBRA, then you can look into state CHIP plans that may cover your children.

What can I do if I can’t afford COBRA?

There are multiple options for people who can’t afford COBRA and the best option for you will depend on your health status, age, and personal situation. The most common options that people consider are private insurance plans, government or community insurance plans, and finding a trade/alumni insurance plan. Private plans can usually save people up to 65% on the monthly cost and actually offer very similar coverage to COBRA.

Where do I sign up for COBRA?

Signing up for COBRA is a relatively easy process. To sign up you will need to get the COBRA election form form your former employer and complete it by the due date on the form. You will also need to pay the premium to start the insurance. It is retroactive back to the day your coverage was lost and will cover any expenses incurred during that time.

How will my coverage change with COBRA?

Your coverage will not change at all with COBRA because you are keeping the exact same plan. In some instances if the company you worked for changes aspects of their plan, then your plan will also change just like it would if you were still employed.

Can I use COBRA if I quit?

Yes. COBRA insurance works for voluntary and involuntary job loss which includes when someone quits their job. Many people are unaware of this option and miss out on potentially using COBRA for their health plan.

Making Sure Preexisting Conditions Stay Covered

Posted on: November 1st, 2012 by Kristen Marie

Dear COBRA Insurance Direct,

Although I am currently employed, I am fearful that my company may soon go out of business and I have a pretty serious preexisting health condition that would likely disqualify me from many private plans. Additionally my company doesn’t have their own health plan but instead purchases a plan through a business association and the plan is in the name of the business trade association. If they do go out of business (which looks like will happen) – will I be able to purchase a family policy through the business association? Or will I be able to find a new plan due to the HIPAA act which makes it illegal to exclude people with preexisting conditions as long as too much time doesn’t pass. Should I apply for COBRA instead? It just seems expensive…

Thanks!

– Confused in Minnesota

Dear Confused in Minnesota –

First of all – you are definitely one step ahead of the game since you are already thinking about this. Many people don’t give a second thought to health insurance until it is too late and then scramble to find a solution. Being proactive before your company goes under is a smart move and will likely save you money and help you find the best coverage for you. This is even more important since you have a preexisting condition that could exclude you from certain policies and plans.

Let’s start with the good news. Under the HIPAA – Health Insurance Accountability and Portability Act – you are guaranteed to have access to continued health insurance that includes coverage of your preexisting condition as long as you sign up quickly for a new policy. In most cases you have 63 days to sign up for a new plan before companies can exclude your preexisting condition. Additionally some states mandate that you use COBRA as an option first if it is available. It is best to check with your state health care office for exact regulations in your state.

Now let’s talk about COBRA. In order to be able to use COBRA the company has to remain in business – without a business and a health plan, there is no COBRA insurance. So is the company does go out of business as you expect, COBRA is off the table and you will need to look for a new policy.

In terms of buying an individual health plan from the business association, that will be up to them. They may allow you to purchase a plan since you will remain in that industry, but they also may not. Health insurance is expensive and they may not be willing to take on an additional expense.

Likely your best option will be to find a new plan as soon as you learn the company is indeed closing. Make the start date of that plan the same day as your last day of coverage. Make sure to find a plan that allows you to continue to use the same doctors and networks you prefer for your condition and when you shop around for policies, ask specific questions about your health condition and coverage. The more you ask the better the policy will be that you find.

Thanks –

COBRA Insurance Direct

COBRA and Bankruptcy

Posted on: September 30th, 2012 by Kristen Marie

medical files

It’s an all too common situation, a company or business files for bankruptcy or closes it doors and suddenly employees are scrambling to figure out what to do about health insurance. Naturally COBRA insurance surfaces as a possible insurance option, but unfortunately COBRA isn’t an option when a company goes bankrupt. Since COBRA is a continuation insurance, there must be a policy to continue. When a company goes bankrupt, their insurance policy is cancelled as well which eliminates COBRA as a potential insurer. So what can you do?

First things first, you need to find another health insurance plan and quickly. Not going without health insurance is dangerous, not only because you may need medical care and it will be extremely expensive but also because going without health insurance makes it harder to get health insurance in the future, especially if you have a preexisting condition. Under the HIPAA law insurance companies can not deny you for a preexisting condition as long as you have continuously held insurance and not experienced a lapse in coverage of over 60 days. This is extremely important to pay attention to because you never can predict medical needs or a condition arising and not having continuous coverage can make this more difficult for ever.

So what options do you have? Well luckily there are lots of alternatives to COBRA and many are actually much less expensive. The option that is best for you will depend on your current health status, age, income, and how you like to use your health insurance.

For people who have preexisting conditions and major medical needs there are likely two insurance options you should consider. The first is a private individual or family plan that will offer similar coverage to what you had before the company went bankrupt. Additionally you should look into preexisting condition insurance (PCIP plans) which offer insurance to people with preexisting conditions. You could also look at state high risk pools.

For people who are generally healthy, there are lots of options for insurance and it depends on your needs. For a full service plan you will want to look at an individual or family plan that mirrors a typical employer plan. However if you do not use your insurance as much and want a cheaper option, then you can look into high deductible and short term plans.

What is the COBRA Insurance phone number?

Posted on: September 27th, 2012 by Kristen Marie

medical equipment

You have questions about COBRA and want to talk to someone about them. It’s a pretty common situation for people looking at COBRA coverage but it can be surprisingly difficult to know where to call and who to contact for COBRA. Here is a quick guide about who to contact and how to contact them when you have questions about COBRA that you need to get answered. Additionally you can take a look at our frequently asked COBRA questions.

Questions About Eligibility

When you have questions about whether or not you are eligible for COBRA the first place should you call is your former employer They have an obligation under the law to inform you of your COBRA rights both when you start working and after you have lost your job. If you are not able to find the answers you want after speaking to your former employer, the next place to call is the health insurance plan provider. They should also be able to inform you if you are eligible. Finally if all else fails you can contact the Department of Labor at 1-866-487-2365.

Questions About Coverage

When you have questions about your coverage including what services you can use and what different services of health care visits will cost you should contact your health insurance company. They will be able to tell you exactly what is included and how much it costs. They can also help you determine which doctors and hospitals you can visit with COBRA. Remember COBRA is just an extension of your old plan so everything will stay the same.

Questions About COBRA Laws

If you have questions about the actual law for COBRA the best place to look is either at our COBRA law page or to contact the Department of Labor, who oversees the law in the federal government. In many cases you can find all the information you need about the law online, but if not try calling the Department of Labor hotline at 1-866-487-2365.

Employer Failed to Fulfill Their Responsibility

If you believe that your employer has not fulfilled their legal obligations under the law, this is a very serious issue that carries very serious fines. In fact employers can be fined up to $110 per employee daily from the IRS and also incur hefty fines from other agencies. You should immediately contact the Department of Labor in this situation so that they can assist you right away.

COBRA Insurance Rules

Posted on: September 26th, 2012 by Kristen Marie

doctor writing prescription

Like any other federal law, there are lot of COBRA rules that are important to understand and follow to ensure that you get the coverage you want and are able to keep it. Failure to follow the rules for COBRA can result in you losing your coverage or not being able to sign up at all. Additionally family members and other beneficiaries may miss out if they are unaware of when they need to notify insurance companies and workplaces of their wishes. Make sure to follow these rules when even considering COBRA health insurance.

Rules for Signing Up

There are certain rules that both the employer and employee must follow in order to sign up for COBRA health and make sure they get the coverage they want.

  • The employer must notify the employee of their COBRA rights when they first become employed
  • The employer has 14 days to notify the employee and their beneficiaries of their eligibility
  • The employee and beneficiaries have 60 days from the date on the notice to sign up for COBRA
  • COBRA is retroactive back to the day coverage was lost if someone signs up
  • In the event of divorce, death, Medicaid qualification, or loss of dependent status it is the responsibility of the beneficiary to inform the workplace and insurance company of their intention to sign up for COBRA

Rules About Cost

The federal government also set very specific rules about the cost of COBRA that anyone on the federal plan must follow in order to be in compliance.

  • COBRA will cost 102% of the full premium
  • Employers are not required by law to subsidize any part of the COBRA expense
  • Insurance companies may cancel your COBRA coverage if you fail to pay your premium on time

Rules About Changes to Plans

Many people want to know what happens to their plan when the company changes the plan or even goes out of business. Here are the most common COBRA rules regarding changes to health plans.

  • If the company goes out of business or stops offering health insurance plan, your COBRA coverage will end
  • If the company changes insurance providers, you will have the same option to switch to the new provider as you would if you were still employed. Make sure to closely look at any changes in coverage and cost before just enrolling in the new plan
  • Open enrollment works the same with COBRA as it did while you were employed. Always plan carefully around open enrollment since COBRA only lasts for 18 months.
  • If the employer decides to increase the cost of the health plan, the same price increases will be passed onto your COBRA coverage.
  • Any changes to the cost of co-payments, deductibles, hospital charges, co-insurance, etc. will also affect your plan

Anytime you are unsure of the COBRA rules the best thing to always do is to call your health insurance provider or the Human Assets department at your former company. Additionally our questions and answers about COBRA can help you find information you are looking for about COBRA coverage, eligibility, and more.

Health Insurance Options After Graduation When You’re Unemployed

Posted on: September 12th, 2012 by Kristen Marie

Dear COBRA Insurance Direct –

So here is my situation. I am 23 years old and just graduated college, but like many of my classmates I still don’t have a job and really need health insurance. I go to the doctor often and know I can not afford the cost with a health insurance plan. What options do I have? Can I sign up for COBRA insurance? I am pretty healthy overall, just prefer to have a full coverage plan. Thanks.

Truly,
Unemployed with Degree

Dear Unemployed with Degree,

It sounds like you are in a difficult situation, but at least you are not alone. Many college graduates these days find that it is much harder to find a job than it was in the past and also find themselves pondering difficult health insurance decisions. Based on your situation, you actually probably have more options than you think for health insurance while you look for a job.

  1. Keep Using Your Parent’s Insurance: Under the recent health care legislation, you can use your parent’s health insurance up to the age of 26 years old now. Even if you haven’t been on it because you used university insurance, you could sign up again during open enrollment. If your parent’s are averse to the extra cost, offer to pay your share because it will still likely be better coverage and less expensive than anything else.
  2. Look for an Alumni Insurance Plan: Many colleges and universities have started offering health insurance plans for alumni that they can use. These plans can usually offer a better rate than a private plan since they are covering more people. Inquire at your school to find out what is available for recent graduates.
  3. Consider COBRA Insurance: If your parents recently qualified for Medicare, lost their job, or had another qualifying event, you qualify for COBRA insurance for up to 36 months. However you must notify the employer and plan if you are in this situation immediately and sign up within 60 days of the event happening.
  4. Look at Private Plans: Given you said you are relatively healthy and you are young, you can probably get a very good rate for a private insurance plan. These plans have a reputation of being very costly but for someone who is young and healthy, you can likely find a full coverage plan for under $200 a month.

Can I Use Both Medicare and COBRA?

Posted on: September 10th, 2012 by Kristen Marie

doctor and elder patientDue to the difference between Medicare coverage and COBRA coverage, many people want to know whether or not they are able to use COBRA and Medicare at the same time.  And the answer isn’t that simple unfortunately.  It depends on both why you qualified for Medicare and when you enrolled in COBRA coverage.

For people who qualify for Medicare coverage because of their age or a disability, being able to use both plans will be based on when you enrolled in COBRA and which plan you had first.

  • For people who were on COBRA insurance plans before they enrolled in Medicare, in most situations COBRA ends when you start Medicare.  If you already have COBRA when you enroll in Medicare, your COBRA coverage usually ends on the date you enroll in Medicare. However, if you are already on COBRA and become eligible for Medicare, it is always smart to enroll in Medicare Part B right away.  This is because there is no special enrollment period when your COBRA coverage comes to an end.  Any dependents or spouses on COBRA will be able to use it for up to 36 months due to your Medicare qualification.
  • If there are certain things that your Medicare plan does not cover, but your COBRA plan does cover, you may be able to keep a portion of your COBRA plan.  A common example of this is when someone has dental insurance through COBRA but Medicare doesn’t have the same dental offering.  Many plans will allow you to only keep the dental part with COBRA.  To find out if you are eligible, you should contact your health insurance administrator.
  • For people who are already on Medicare and then lose their job (or have another qualifying event) and become eligible for COBRA coverage, you are allowed to sign up for COBRA.  This right is part of ESRD, and in this situation Medicare will be the first plan to pay for any services and then COBRA will pay after that.  The reason to take COBRA in this situation would be due to high medical costs that Medicare doesn’t cover but your COBRA plan would.

Additionally it is important to understand that people who are eligible for Medicare (due to ERSD), have a 30 month coordination period when the employer’s group health insurance plan pays first and then Medicare pays second.  For people enrolled in COBRA during this 30 months window, COBRA health insurance will be the primary insurer.  When COBRA ends, which is likely to happen within that period, Medicare will then take over.  If your COBRA coverage does not end in the 30 months for some reason, then the positions will simply swap and Medicare will become the primary insurer.

Church Plans and COBRA Insurance

Posted on: September 7th, 2012 by Kristen Marie

doctorsDear COBRA Insurance Direct,

For the last five years I have worked with my church and they have provided me with a health insurance plan for my family.  I just had another child and will need to leave my church position so I can stay home with the new baby.  Am I able to use COBRA to continue the health plan I had with my Church?  I am really worried about keeping my health care. 

Sincerely,

Worried at Church

Dear Worried At Church,

In most cases the federal COBRA law does not cover church insurance plans so likely it will not be an option for you to continue your plan with COBRA.  However even though this isn’t normally an option it is still a good idea to contact the health plan administrator to double check.  They will be able to tell you immediately if your plan is eligible.

If you learn that your plan is not eligible for COBRA, then you will need to look into alternative plans.  Depending on your health care needs you could consider a private family plan, a high deductible plan, or a government plan.  The private family plan will provide similar coverage, likely at a lower price, to what you had with the church.  A high deductible plan will only cover emergencies.  The governmental plans vary by state but most likely are a good option for your children and can provide free or lower cost care.  Good luck!

What are Independent Election Rights With COBRA?

Posted on: September 6th, 2012 by Kristen Marie

doctor and patientUnderstanding the language in your COBRA election form can be difficult and most people find themselves looking for a dictionary just to understand what their options are.  One question we frequently hear from people is in regards to Independent Election Rights and what that means.  COBRA insurance independent election rights refer to the ability to choose who signs up for COBRA and who does not independently.  For example, if you have a family of four, you will decide whether or not each person signs up for COBRA independently.  You could decide to sign up one parent and then put everyone else on a private plan.  Essentially each person can make their own election decision.

Why would someone use independent election rights for their COBRA insurance?  The main reason that people use their independent election rights is to save money.  How?  Well when someone has a preexisting condition or major medical needs, they often learn that COBRA insurance is the best option for them so that they can continue the exact same care and because they may be denied from other plans.  However for their family members without the same needs, COBRA is expensive and unnecessary.  Normally they can sign up for a private plan and save up to 65% on the cost.  Or perhaps the children qualify for a governmental plan so the parents only sign up for COBRA.  No matter the situation many people find that when they choose to only sign up those who most need it for COBRA and find alternative plans for everyone else, they save money.

Can I Use COBRA Insurance If I Am Fired?

Posted on: September 5th, 2012 by Kristen Marie

Dear COBRA Insurance Direct,

I have been working at a company in Nevada for the last ten years.  The company has about 100 employees.  Unfortunately over the last six months or so I have had some personal problems and I was fired because I was consistently late to my shift.  I have had health insurance with them the whole time I have been employed and my wife and children also use the insurance.  Can I sign up for COBRA insurance if I was fired?

Thanks –

Fired and Confused

Dear Fired and Confused -

The good news is that you most likely can sign up for COBRA.  COBRA is for people who lost their jobs voluntarily and involuntarily.  Involuntarily loss of job can include both being laid off or fired as long as there was no gross misconduct.  In most situations being late is not enough to be considered gross misconduct so you should be able to sign up.  If your employer is telling you that you are not eligible due to being fired you can call the Department of Labor in Nevada to argue your case.  You can also contact the health insurance company and they may be able to help.

Additionally depending on your situation, I would recommend also exploring alternative plans because you may find you can save money by using a private plan.

Good luck!

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