| A friend of mine recently quit his job. The position | | | | after your last day. Here are the catches, though: |
| was a contract position, and the insurance would | | | | |
| not become effective for six months. Since he | | | | |
| has diabetes, he really wanted to know what his | | | | You cannot alter the amount of coverage you |
| options were. How could he continue to receive | | | | receive. If you were covered for the works |
| health care without spending a small fortune in the | | | | before you left, then you'll have to be covered |
| interim?Of course, he began asking us about | | | | for the works until you cancel COBRA coverage. |
| these things, and we had to be honest with him. | | | | If you leave the policy for any reason, you're |
| First of all, COBRA is a very useful legal tool, if | | | | done. Don't miss a payment! and don't release |
| you have no better options. However, it is best | | | | yourself from the program until you are |
| to do some homework and find a reasonable | | | | completely covered by another policy and that |
| insurance company. You can then purchase a | | | | policy is in effect. |
| short-term policy for yourself during the time that | | | | You only have a very small window of thirty |
| you will not otherwise be covered. COBRA can be | | | | days from your last day to elect COBRA |
| very expensive, and since you cannot reduce the | | | | coverage. |
| amount of coverage you have with COBRA, you | | | | While COBRA coverage is offered to you, it |
| may end up paying for items in your policy that | | | | does not take effect until you sign up for it, in |
| you don't need simply to maintain healthcare | | | | writing. |
| coverage.Why do you need to maintain healthcare | | | | And the final catch: You pay 100% of the |
| coverage? Because most policies have a clause | | | | monthly premiums. |
| about pre-existing conditions. The terms for | | | | In most places, the employer graciously picks up |
| "pre-existing" differ from policy to policy, so read | | | | a portion of the monthly premiums, usually from |
| your current policy very carefully, and your new | | | | 40% to 75%. In very very rare cases, an |
| policy very carefully before making any | | | | employer will actually pay 90% or more of the |
| decisions.For pre-existing conditions, the general | | | | monthly premiums. But if you elect COBRA |
| rule of thumb is : If you've been without insurance | | | | coverage, you agree to take on the full monthly |
| for 30 days, any illness or condition at the time | | | | premiums, at your own cost. And don't be late |
| you sign your new policy is considered | | | | with your monthly payment. If you are, they can |
| "pre-existing", and thus is not covered by your | | | | cancel you immediately, and there is no second |
| current policy. Which means, that any life-long | | | | chance to sign up again.Just because COBRA |
| condition -- such as diabetes or epilepsy -- can be | | | | must be offered to you, doesn't mean you get it |
| considered pre-existing. Once your condition is | | | | automatically. You must choose (in writing) to |
| labeled pre-existing, it can be excluded from your | | | | accept the COBRA coverage, and fill out the |
| healthcare coverage under the current policy, | | | | necessary paperwork. Speak with your HR |
| even if you pay your monthly premiums.Because | | | | department for what paperwork your particular |
| of his medical condition, he found that getting | | | | insurance requires.After all of this information, he |
| private insurance was going to cost him a small | | | | chose to keep his COBRA insurance for the six |
| fortune each month. Normally we suggest that a | | | | months until his next insurance policy took effect. |
| person use a work policy from their spouse. | | | | He payed over $1000/month for himself, wife |
| Leaving your job constitutes a "Life Change", and | | | | and four children. It sounds like alot, but in order |
| can bypass most policies' once-per-year change of | | | | to prevent any "pre-existing condition" clauses, |
| coverage clause. However, his wife does not | | | | and to be prepared should something happen |
| work. He is the sole income provider for his | | | | during the six-month window, he chose to pay |
| household. Taking all of this into consideration, we | | | | the price instead of rolling the dice.If you find |
| definitely suggested that he take advantage of | | | | yourself looking for a new position, or just an exit |
| the COBRA coverage.What is COBRA? It is an | | | | of your current job, be aware that COBRA exists |
| acronym for Consolidated Omnibus Budget | | | | to help you. In many cases you can find alternate |
| Reconciliation Act. But that usually means nothing | | | | forms of insurance, such as a spouse's policy or a |
| to laymen like us. In short, it is a continuation of | | | | less expensive private label. But in some cases, |
| benefits federal act. The part that effects us | | | | COBRA really is a good alternative. It can cost |
| states, in short: If you are insured at work and | | | | you a little in the short-term, but saves your |
| there are more than 20 employees, they must | | | | insurance history in the long term.Jerry Hanel is |
| offer the same insurance coverage you were | | | | co-owner and Technical Advisor to InsuranceQNA. |
| getting under their policy for up to 18 months | | | | |