What To Do When You COBRA Health Insurance Coverage Ends
Maintaining your health insurance coverage can be a challenge when you suddenly find yourself unemployed. To provide a safety net for these workers, the federal government enacted the COBRA law. COBRA, or the Consolidated Omnibus Budget Reconciliation Act of 1986, allows workers who voluntarily resign, are laid-off or terminated for any reason other than ‘gross misconduct’ the right to continue coverage under their company’s group health insurance for up to 18 months at their expense.
If your former employer has a group plan with at least 20 employees enrolled who have worked at least six months, you may qualify for COBRA health insurance coverage. If your wife or child were enrolled under the company’s group plan, they may also opt for COBRA continuation of coverage benefits even if you opt out of COBRA. Depending on the qualifying event, you and your qualified family members can enjoy COBRA benefits for as long as 36 months.
But COBRA continuation of coverage benefits is not cheap; you will have to pay up to 100% of the premiums plus a 2% administrative fee, which can eat up as much as 84% of the average unemployment benefit check. Of course, you can apply for assistance to pay your COBRA premiums under the American Recovery and Reinvestment Act of 2009, which will give qualified participants a 65% subsidy to pay premiums, but this will only last for nine months or until the end of your COBRA benefits period, if you elected to join COBRA late.
It is wise to take a look at individual health insurance policies either before your COBRA subsidy runs out or before you even elect to have this sort of coverage. Why? These plans can be more affordable than the COBRA continuation of coverage benefits. When it comes to individual coverage, you can choose between various HMO and PPO health plans. These are common health insurance terms for the main types of managed health care. With an HMO (Health Maintenance Organization) membership, you must choose a primary care physician who refers you to other specialists when you need services beyond their specialty. If you are a member of a PPO plan (Preferred Provider Organization), you are free to choose the providers for your care at your will, as long as they are in the network. Choosing one of of the network will mean that your claims are not entirely covered, or possibly not covered at all.
So what are the pros and cons of getting HMO vs PPO insurance? While both can be affordable, you should get an HMO if you care more about preventive care services and you don’t have a preferred doctor. On the other hand, a PPO might be the better choice if the doctor you’re already seeing is a member of the PPO network or you want some freedom to direct your health care since you can see any specialist you want as long as they are a member of the network.
Want to find out more about COBRA continuation of coverage benefits , then visit Kristaria Dawson’s site on how to choose the best COBRA health insurance coverage for your needs.
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