In this day when companies are facing layoffs, buyouts, and other financial difficulties, it may be difficult to hold on to a good health insurance policy. Thanks to the government, however, there has been a couple of programs that will allow you to keep the same coverage you had before your situation changed – if you act soon enough. Here are some things you need to know about the COBRA program that could enable you to enjoy the same health insurance coverage you had.
COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, enables you to keep the same coverage for up to 18 months. In some cases, this time period may be extended for an even longer period of time for dependents.
In order to qualify for this program, participants have to meet certain qualifications. The good news is that the conditions for COBRA are rather lenient. If you were an employee, and are now out of work, you may qualify – even if you were fired, or laid off. The exception is if you were extremely negligent in your duties, or performed some act of misconduct that got you fired.
Other qualifying situations may occur in the event of a divorce or the death of the employee. Sometimes there may also be a separation involved, or the employee may retire, or go on Medicare. In cases like this the coverage may be extended for periods up to 36 months. One situation, however, where coverage will not be given, is in the event that the company goes out of business. In that event, though, you may still be able to get your health insurance coverage through HIPAA.
Application Time Is Limited
After a qualifying event occurs, you need to act rather fast because there is not a lot of time given in which you need to apply for the COBRA program. You must act within 30 days of the event by informing the insurance plan administrator (the employer) of your intent to continue the coverage. It is best that you do it in writing – for your own records. After you notify them, they will send you a letter within 14 days, and then you have up to 60 days to decide if you will accept the COBRA coverage.
While you are able to continue the coverage that you had prior to the event, there is a major difference that also takes place. Whereas the employer paid a part of the premiums previously – now it becomes entirely up to you to meet the full price. So, there may be a little sticker shock, because it will not be cheap. Since group insurance is usually much less expensive, you may be surprised at just how much the employer was paying.
One of the great benefits of using the COBRA health insurance coverage is that there most likely will not be any preexisting conditions given since you were already covered before. This means that your coverage continues without any hitches hopefully, and you can then continue to enjoy what you had before.