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