When a company closes, large or small, it means that there is no longer a health plan and therefore, no federal COBRA or state continuation coverage available for former employees and their dependents. What are your options?
Another Group Plan
First, if you have a spouse or domestic partner whose employer offers health coverage, we recommend signing up. You usually have 30 days after the loss of your group coverage, which is considered a qualifying event.
You will then have rights to continuation coverage under the new group plan.
Individual Market Insurance
Coverage is available in the individual market, as long as you had coverage when the plan ended. You are guaranteed coverage in the individual market under HIPAA (Health Insurance Portability and Accountability Act). You can also apply for an underwritten plan.
Underwritten Plans
If you are healthy, you'll want to apply for a medically underwritten plan. You'll have a wide choice of plans from various insurance carriers. Talk to an insurance broker to determine which plan and carrier are right for you and your family.
You may need to provide proof that you had prior coverage under the group plan. Ask your insurance carrier for a Certificate of Creditable Coverage. This will exempt you from any pre-existing condition exclusions.
Guaranteed Issue Plans
If you have had health problems, you'll also want to apply for a guaranteed issue plan (GI), often referred to as HIPAA plans.
There are time limits for applying - within 63 days of the last day your group plan existed. You'll have to provide proof of prior coverage through a Certificate of Creditable Coverage.
HIPAA plans are more expensive than underwritten plans. If you're applying for HIPAA, you probably have some regular health care and/or prescription expenses. Different carriers offer different plan designs. You'll want to compare prices and physician networks to be sure you can access the services you need.
Public Programs
Depending on your income and situation, you or your children may be eligible for coverage under a public program. Check out the Foundation for Health Coverage Education® (FHCE) website for help finding coverage in your area: www.coverageforall.org.
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