Lost your job but want to keep your health insurance? Whether your job loss is voluntary or involuntary, you have options for keeping yourself covered. There is no "one size fits all" - the option that works for you will depend on your personal circumstances.
Good news for those who qualify, the temporary 65% COBRA premium subsidy through the American Recovery and Reinvestment Act (ARRA) of 2009 will relieve some of your financial burden for up to 9 months.
It's best to act promptly, but give yourself enough time to make a good decision. Some options require action within a specific time period after losing your group coverage.
Work with a insurance professional to choose the best option. (If you're in California, we're happy to help you. Email us at info@shargel.com.)
Within 30 days: Enroll in another available group plan
You've got coverage! Moving to a second employer's or your spouse/domestic partner's group health plan is the first option. Employees and spouses will keep full individual COBRA rights for the future under the new plan. Domestic partners may have different rights - contact your group plan administrator.
Key note: If you are eligible for coverage under another employer's or a spouse's health plan you are not eligible for the ARRA COBRA premium subsidy.
Within 60 days: Accept federal or state COBRA continuation coverage
Relief is in sight! Signing up for COBRA continuation coverage (and the 65% federal ARRA premium subsidy, if eligible) is the best option for most people who expect to eventually find new employment, and for people with health issues.
Key note: The temporary ARRA 65% COBRA premium subsidy for involuntary job loss makes this option more affordable.
Within 63 days: Sign up for a guaranteed issue individual plan
Use your safety net! Applying for a guaranteed issue (GI) plan in the individual market is the option if you have health problems and your former employer no longer offers a group health plan.
Key note: You must meet specific requirements to be eligible for GI plans. It's essential to consult with a health insurance broker.
Anytime: Buy your own personal coverage
Consider yourself lucky! Purchasing health insurance in the individual market is the option to consider if you're healthy and:
- you have income above the COBRA subsidy phase out limit;
- you plan to be self-employed for some time;
- your employer does not offer a group plan; or
- you do not qualify for your employer's plan.
Key note: You must medically qualify for individual plans. Insurance carriers are very picky about medical underwriting. Sign up for COBRA or another available group plan until you are certain your coverage is approved.
Your best option depends on availability, affordability, plan benefits, your health status and the duration of coverage you need.
The American Recovery and Reinvestment Act of 2009
If you lost group coverage due to an involuntary termination of employment between September 1, 2008 and December 31, 2009, and meet the eligibility requirements, the ARRA COBRA subsidy (which also applies to Cal-COBRA in California) can help make coverage more affordable during the subsidy period.
Your former employer or health plan will send you information regarding COBRA, the federal subsidy, and how to enroll. You can read about the ARRA COBRA subsidy on the US Department of Labor website. Check out the FAQ for employees.
Information posted here copyright Shargel & Co. Insurance Services. Please feel free to reproduce with proper credit to Susan Shargel, and include a link to http://insuranceinsights.shargel.com
