Losing a job can be a catastrophic event, but do you know what your health insurance options are after a job loss? Would you know where to find affordable health insurance coverage for yourself and your family?
There are a multitude of options available should you lose your job or employer-provided health insurance, and you can save yourself a lot of money and headaches over the long run if you choose wisely.
1. COBRA
Otherwise known as the Consolidated Omnibus Budget Reconciliation Act, this federal law was enacted in 1986 and provides continuation coverage on an existing employers group health plan for 18 or 36 months after a job loss or life event. If your employer has 20 or more employees, it falls under the federal umbrella and lasts 18 months. If not, many states have mini-COBRA plans that are handled by state-authorized insurance agencies and provide coverage up to 36 months. Now that the presidential extension of government subsidies has expired, however, many families cannot afford the expensive premiums.
2. Short-Term Medical Plan
This kind of health insurance protects you in the event of an unexpected illness or injury and is designed to provide protection as you transition between jobs or life situations. A life situation can range from losing your job to becoming newly divorced and no longer eligible under your former spouse’s group health plan. It is cheaper than traditional health insurance and does not limit you (or your eligible dependents) to a specific network of doctors. But as the name indicates, it provides only brief medical coverage and you are not guaranteed renewal after the initial term expires. It is also difficult to get if you are over 65. Short-term medical plans do not cover vision, dental or maternity expenses.
3. Parents’ Health Insurance Coverage (if you are under age 26)
An addendum to President Obama’s current health care plan – at least for now – stipulates that you can get coverage under your parent’s health insurance plan as an adult until age 26 without being a full-time student or dependent. However, it is only available if you do not have group health care options and it does not cover your spouse or dependents.
4. Organizational Membership
According to Paul M. Hamburger, a partner and head of benefits practice Proskauer Rose LLC in Washington D.C., you can purchase individual health insurance through memberships in organizations like unions (such as the Screen Actors Guild SAG), alumni associations, professional organizations or the AARP.
5. High Deductible Health Plans (HDHPs)
Another kind of health insurance that Hamburger suggested is more commonly referred to as catastrophe coverage. “This variety features very high deductibles ($50,000) and is designed to protect you in the event of a catastrophic injury or illness. The premiums for this type of coverage are very inexpensive,” Hamburger said. “A High Deductible Health Plan will cover you as a stopgap until the new health care coverage kicks in.”
Of course, individual circumstance will likely determine your best option for health insurance.
For instance, according to Jeff Williams, President of Health insurance of Washington, even if group coverage is available, an individual catastrophic plan is probably cheaper. But if you are on the older side of the average age at your company, it is probably cheaper to go on COBRA, rather than get quotes for an individual plan for a 55-year-old.
“It is hard to generalize because COBRA runs the gamut as far as what it covers and the range of deductible,” Williams said. “They are simply the company health plan without a discount.”
– by Bill Hupp