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Answer:
Last week, we answered a question from a BuyandHolder who fears losing his job...and in that connection we wrote about getting prepared to file for unemployment coverage. Lining up the necessary documents and applying at the right office takes a surprising amount of time, so it’s wise to prepare ahead of time. Click HERE for the details.
Thanks to the Consolidated Omnibus Reconciliation Act of 1985 (COBRA), companies with 20 people or more must offer employees who are being laid off the opportunity to extend their health coverage at group rates. Continuation lasts a minimum of 18 months, sometimes longer. In fact, often longer when the unemployment rate nationwide is high.
That’s the good news. The bad news is you are the one left paying the premiums –- 100% of them plus an administrative fee. According to the Kaiser Family Foundation, in 2008 the average premium was $397 per month for an individual and $1,081 for a family. If you’ve been accustomed to your employer paying all or most of your premiums, this may come as a bit of a shock.
Nevertheless the COBRA premiums are almost always less than if you take out your own individual health insurance policy. Two possible exceptions: If your spouse has coverage, it's probably cheaper to purchase family coverage under his or her plan. And if you’re very young and very healthy, your own plan might be cheaper than your employer-provided plan.
$TIP: To check on what your state offers, visit the
National Association of Heath Underwriters website: http://www.nahu.org/consumer/healthcare/topic.cfm?catID=180
CAUTION: You must apply within 60 days after being notified by your employer of your rights under COBRA and you have 45 days after you elect COBRA coverage to make the first premium payment.
If you think you will land a new job right away, the 60 days is important...it means you can postpone paying COBRA premiums for two months and still be covered. But watch the calendar like a hawk, especially if you have a preexisting medical condition. If you go over the 60 days without insurance and then get a job that has employee insurance, the new company’s health plan is not obligated to cover your preexisting medical condition.
And, COBRA is not universal...The federal government has its own form of continuation coverage for employees (similar to COBRA), and many states have “mini-COBRA” plans that cover employees of smaller companies with 2-19 employees. If you fall into either of these categories, find out what type of coverage, if any, you are entitled to.
If you have a health plan through a church or church related association, you may not be able apply for COBRA, though other continuation programs, very similar to COBRA, are often available. Again, ask.
Other exceptions... Nor is COBRA available to those who are fired for gross misconduct. The definition of gross misconduct is vague but is likely to include theft, embezzlement, violation of company policy and non-work related violence affecting the workplace. So behave!
$TIP: If you have questions that we haven’t answered, check with your benefits officer and go to: Cobra Health Plan Advice for Individuals & Small Businesses at: www.cobrahealth.com. This is one of the most thorough sources of information.
Good luck! |
