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