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Turning 27…What are my insurance options?

Posted on: November 7th, 2012 by Kristen Marie

Dear COBRA Insurance Direct -

I have been very fortunate the past 27 years of my life to be covered under my father’s health insurance policy. Not only have I been covered, my parents have continued to pay the health insurance cost for me and never once asked that I send them a check. Now on the verge of reaching my 27th birthday, I have to find my own health insurance plan. I currently am self-employed and trying to launch my own internet business.

In terms of a plan – I am pretty healthy but like to go to the doctor when something comes up. My insurance plan with my Dad was awesome – gym membership, mental health services, any doctor, any hospital – you name it, the plan had it. I don’t need all the same bells and whistles, but I would like something that offers good coverage and that I can depend on. Do you have any ideas on where I should start looking for insurance? Is COBRA a good choice? I have a pretty limited budget.

Thanks -

Trying to avoid my 27th birthday

Dear Trying to Avoid My 27th Birthday,

First of all it is great that you are thinking about this ahead of time. All too often people don’t think about this until it is too late and they have already let their coverage lapse. In your situation you have a few options for health insurance that could help you maintain the kind of coverage you want at a price you want. It’s a good idea to explore each one and find the plan that best suits your needs. Here’s an overview of your options:

  • COBRA Insurance: Under the current laws, it sounds like you would likely qualify for COBRA given your father’s plan covers at least 20 full time employees. Under COBRA you could maintain the exact same insurance plan you’ve had for up to 36 months. The main advantage of this – you get to keep the great plan your Dad has. The main disadvantage – it will probably be really expensive. Under COBRA you will be responsible for paying the entire premium yourself plus a 2% administration fee. To find out the exact amount, contact the health insurance company and inform them you are losing your dependent status and want to know how much it will cost to continue their plan with COBRA. Based on the plan details you shared, likely this will be $400 or more monthly.
  • Private Insurance: The second option to explore is a private insurance plan. Likely since you said you are healthy and you are young, you can find a pretty affordable plan with good coverage for around $125-$150 per month. These plans are offered by major companies like Blue Cross, Aetna, and others and are able to offer pretty affordable care to people who are healthy. Under these plans you will be able to go to the doctor, fill prescriptions, etc. but they likely won’t cover everything your Dad’s plan did. Find out more about private plans, coverage, and prices.
  • Trade or Alumni Organization Insurance: Depending on your industry and your educational past, you may be able to find an affordable health insurance plan through these organizations. Many alumni associations offer health insurance and many trade organizations also do. One of the most popular is the Freelancer’s Union. They provide coverage to lots of people in your situation.

No matter what you decide, it is incredibly important that you maintain your insurance company. Having a lapse in care can disqualify you from future plans and make future insurance much more expensive. Moreover you never know when illness will strike and you will need your health insurance.

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.

COBRA Insurance Between Jobs

Posted on: September 29th, 2012 by Kristen Marie

A common question we hear from folks considering COBRA is whether or not it is a good idea to use COBRA insurance between jobs. Unfortunately the answer isn’t straight forward and depends on your current health status, age, and how long you think you will be between jobs. For some COBRA will be the best option between jobs and for others they may be able to find a much less expensive alternative. However here is some general advice about insurance options between jobs.

Length of Time Between Jobs

The length of time between jobs is going to be a major factor in determining whether or not you should use COBRA. But first let’s define the length of time as not just when you start the new job, but when your health insurance would start with the new job. Many times you have to be on staff for thirty days before the new insurance will kick in.

For people who will be without insurance for less than 2 months, they likely shouldn’t do anything. Here’s why. COBRA is retroactive back to the day you lost coverage and you have 60 days, or two months to sign up. That means that should you end up needing any type of health care during the 60 days you can sign up before the window is over and get reimbursed for your expenses once you enroll in COBRA. However if you don’t have any medical care needs, which is likely, then you have saved the two months of premiums for COBRA, which could be over $2000 for a family.

For people who will likely be without insurance anywhere between 3 months and 18 months (the length of COBRA coverage), whether or not COBRA is right for you will really depend on your health care needs. For people with preexisting conditions or consistent medical care COBRA may be the best option especially if you can afford it and only will need it for a short time. However if you do not have constant health care needs and don’t use your insurance often then a COBRA insurance alternative may be a better option, especially if there is a long period between jobs. Short term insurance could be a good alternative for a time period of 1 year or less and a private plan could also help save you money if you want more comprehensive care.

Your Health Status

Generally it is recommended that anyone with serious health care needs or preexisting conditions use COBRA to continue their care since they are likely to either be denied from an interim plan and/or be charged outrageous premiums. Additionally not having to change a treatment plan or doctors is very beneficial for someone who uses their health insurance frequently. Alternatively for someone who is generally healthy, young, and doesn’t use their health insurance often, a private plan will likely help them to save a significant amount of money. These plans are similar to COBRA coverage but will charge lower premiums for people who are healthy. Additionally you can consider high deductible plans and short term plans if you do not often use your insurance.

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.

Is COBRA a Good Option For You?

Posted on: September 24th, 2012 by Kristen Marie

nurse and child

Most people have a million things on their minds when they lose their jobs – How I am going to pay my bills? How do I find another job? What do I do now? and eventually What am I going to do about health insurance? Is COBRA right for me? It’s a scary position to be in and can feel very overwhelming. But hopefully we can help alleviate some of the stress about determining what to do about health insurance and COBRA.

COBRA is best for…

In most situations COBRA insurance is best for people who:

  • Have a preexisting condition and are likely to be denied from other plans
  • Are pregnant or plan on becoming pregnant
  • Have had surgery recently or plan to have surgery in the near future
  • Have been denied from a health insurance plan before
  • Lead a high risk lifestyle
  • Are over the age of fifty who may be denied from another plan
  • Take expensive medication
  • Can afford the premiums and do not want to deal with a change in insurance

A COBRA alternative is best for….

Alternatively there are many people who don’t necessary need COBRA and can likely save money if they find a new plan. You should look at an alternative to COBRA if:

  • You are young and generally healthy
  • You do not use your health insurance often
  • You do not have a preexisting condition
  • Qualify for state or federal health insurance
  • You can use a spouse’s insurance plan
  • You want to save money

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.

Will COBRA Insurance Work If I Move?

Posted on: August 21st, 2012 by Kristen Marie

stethoscopeLosing a job normally brings about lots of changes to someone’s lifestyle, and more often than not this may involve moving. Sometimes it is a local move, but many times people end up moving long distances to save money, find work, or be closer to family during a hard time. However for people using COBRA insurance, or considering COBRA, relocation may affect your benefits. Therefore it is important to find out what consequences relocation will have on your COBRA coverage before packing up.

The main factor that will determine whether or not you can use COBRA if you move is your health insurance provider and policy. Some insurance plans only cover people living in a certain region or state, while others offer national coverage. Normally if your plan is a regional or state plan, your insurance will be cancelled if you move out of that coverage area. For national plans, COBRA usually extends to any state you move to. Normally international moves are never covered though COBRA insurance.

Additionally, make sure not to make any assumptions about your plan without consulting your health insurance provider and asking them specifically about your relocation plans and COBRA coverage. Many people make assumption that because their plan is provided by a national company, like Blue Cross, that automatically means that their coverage will work nationally. However most plans sponsored by national companies are regional or state based and in fact will not work if you move.

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