Posted on Thu, Jan 22, 2009
COBRA alternatives are necessary because the program costs more than most people can afford. This law exists to provide continued health coverage after an employee leaves a job. Coverage is only intended to be temporary. When a person is faced with the choice between purchasing private health insurance and continuing with group health care insurance through COBRA, they must act quickly because they have a 60 day window to enroll in the COBRA plan. COBRA is the acronym that is short for the Consolidated Omnibus Budget Reconciliation Act. This law protects people by allowing the individuals that are eligible to continue their group health care plan for up to 18 months.
Eligible people have a limited time to make their decision about whether to proceed with the plan under COBRA or to instead choose a plan offered through an independent health insurance agent. After 60 days, the person is no longer eligible to use the benefits protected by COBRA.
Here are the advantages of using the COBRA plan:
· Coverage is guaranteed for up to 18 months as long as premiums are paid on time without interruption. There is no guarantee that everyone can find coverage in the private sector. COBRA allows the covered person to continue the policy they had while working for their former employer without interruption. This removes any worry about spending time looking for an alternative to COBRA.
· Group medical insurance plans usually have a lot of bells and whistles such as low deductibles, high dollar coverage, and a long list of providers and conditions that are covered. Sometimes it is difficult to find similar choices with private medical insurance.
· Pre-existing conditions are often excluded for at least 12 months on private health insurance plans. The length of time the exclusion continues depends entirely on the company. A person covered through their former employer’s group health insurance plan does not have to worry about pre-existing conditions, at least while the coverage continues.
Disadvantages of continuing with the plan through COBRA:
· If a person misses a payment, coverage can be canceled. Once the policy is canceled, it cannot be reinstated. COBRA law requires the insurance company to send notices of nonpayment for cancellation; however, it is easy for a person to miss the notice, leading to an increased likelihood that the policy will be canceled.
· Premiums on a group health care plan are very high in comparison to private plans. The law requires that the covered person pays 100% plus a 2% penalty of all premiums. People often find that their premiums through COBRA are up to three times higher than private health insurance plans.
· COBRA is a temporary fix to a health insurance problem. The very fact that coverage is temporary can be a problem if the covered person finds a job that does not offer healthcare benefits.
Experts recommend that people find an alternative to COBRA as soon as possible to save money and to obtain a policy that is not temporary.
Posted on Thu, Jan 22, 2009
There are certain eligibility requirements that must be met in order for a person to qualify for COBRA benefits. The Consolidated Omnibus Budget Reconciliation Act was enacted by Congress to protect people from losing health insurance due to the loss of a job, the death of a sponsoring family member, a divorce, the death of the sponsoring family member, and other life altering events that are deemed eligible.
Usually, if a person leaves a job, they have the right to purchase health insurance on the group medical insurance plan sponsored by their employer for up to 18 months, due to the provisions of the law under COBRA. The employer is required to notify the former employee of the cost of their insurance premium in writing. Employers also give a verbal explanation at the exit interview.
There are some cases where people find out that they are not eligible to receive extended health benefits under COBRA provisions. The people affected are unpleasantly surprised when they discover their status, if ineligible. If a person discovers he or she cannot receive benefits under COBRA, there are other options that are available and they must act quickly because time is of the essence. Most insurance companies will not cover pre-existing conditions if there is a break in coverage of more than 60 days, so it is important that if a person is recently separated from their job that they contact a health insurance agent so they can understand all of their options.
Here are a few of the situations that cause people to be ineligible for benefits under COBRA:
· The law only requires companies with over 20 employees to provide benefits under the laws governed by COBRA. Employees who work for companies that have fewer than 20 employees are not eligible for benefits under COBRA. If they leave their job or are terminated, they lose benefits at the end of the specified coverage period. In most cases, coverage ends at the end of the month the employee is terminated. People who fall into this category need to contact a private health insurance agent as soon as possible to purchase an individual policy.
· Many companies in this economic crisis are doing everything they can to eliminate expenses. Health insurance coverage for employees is a big expense for businesses. Employees should be aware that their company could cut health insurance benefits or eliminate them altogether. If that happens, the employee is not eligible for benefits under COBRA.
· Sometimes, people who are paying for continued health insurance benefits lose their eligibility when they miss a payment. The law states that if people fail to pay for their coverage at any time, they can lose their eligibility status. Although COBRA requires the insurance company to send out a cancellation notice when a person misses a payment, people do not always see the warning letter. That is why it is imperative for people to watch for any notices from their insurance company.
Posted on Thu, Jan 22, 2009
Most people have no idea what COBRA means. Congress enacted the Consolidated Omnibus Budget Reconciliation Act or COBRA to protect people in the event that they face the loss of health insurance coverage when changing jobs, after the death of the eligible employee, after divorce, or some other life altering event. COBRA is not health insurance. It is simply a law.
Once a person becomes eligible under COBRA, they have 60 days to make a decision about whether they want to continue coverage or not. If they decide they want coverage, COBRA allows them to continue coverage under their former employer group health insurance plan for up to 18 months. Premiums can be as much as three times the amount they paid while employed because the former employee is now responsible for 102% of the premium cost. Most of the time, it is prohibitively expensive. Maybe that’s why only 20% of eligible people elect to continue their health insurance benefits.
Fortunately, there are alternatives that can save people money. Health insurance agents have many different options they can present to people seeking health insurance. They are licensed professionals who are educated and experienced in dealing with healthcare insurance questions on a daily basis.
Here are just a few options that are available:
· Aetna is one of the largest insurance companies in the United States. They offer health insurance coverage in many different states. Aetna has group plans customized for the differing needs of the employers that buy group health insurance through the company. The cost and plans vary significantly depending on individual state laws and business needs. Aetna does business in the private sector as well.
· Blue Cross and Blue Shield are two names that are widely recognized around the United States. They offer health insurance to both companies and individuals. Because they are nonprofit companies, the rates are usually much more competitive than those offered by other companies.
· Short-term health insurance can be a very viable alternative for those who are in between jobs. Often, people are without insurance for only a brief period of time. Once they get a new job, they will be eligible to enroll in the group health care plan offered by their new employer. Short-term health care insurance is sold by many different companies and can be purchased by individuals through an independent health insurance agent. Coverage on these plans is usually very affordable, but does have its limititations.
Obviously, people need to seek the services of a professional licensed health insurance agent that does business in their state. They can provide free quotes and valuable information to help people make the right health care decisions relevant to their own unique situations.
Posted on Thu, Jan 22, 2009
People who have lost their jobs for any reason may be concerned about finding COBRA alternatives. The COBRA legislation was set up by Congress to provide protection for people who have health insurance provided by their employers. The Consolidated Omnibus Budget Reconciliation Act or COBRA was created to give people the option of continuing with insurance through the employer’s group plan for up to 18 months after termination of employment. In other words, if you lose your job for any reason you can elect to pay to keep the same insurance for up to 18 months.
It all sounds good in theory but there are a few concerns people face when considering using COBRA:
· COBRA is expensive. People have to pay about $600-$800 for individual health insurance through this plan. Families can expect a bill of at least $1300. Most people are unpleasantly surprised by the high dollar amount they are expected to pay for continuation of their health care coverage.
· Why is COBRA so expensive? While the person is working, the employer likely paid the majority of the health insurance premium. That was part of the employee benefits package. Once someone no longer works for the employer, the premium burden falls to the former employee because the employer is not required to pay for health insurance benefits for people who do not work for them.
· Unemployment compensation does not pay enough to cover COBRA. Affordability is important for people who have been laid off or lost their jobs. Affording a high health insurance premium is difficult for someone who lives on unemployment compensation. Most people who use their unemployment benefits only receive a maximum of $1300 each month. It does not make sense to spend almost all of that money to provide health insurance rather than food or living expenses.
· The government allows 60 days for someone to make the decision about whether or not to choose COBRA benefits or the alternative. Any person who has recently lost a job may not feel emotionally prepared to deal with finding affordable health coverage. Getting a health insurance comparison from a qualified insurance agent will equip a person to make a judgment about healthcare options.
The need for family medical insurance does not end when the job does. Changing jobs causes a lot of stress. Living without a job creates higher stress levels. High insurance premiums cause even more stress. Fortunately, COBRA alternatives do exist that can save money. A qualified private health insurance agent is the best person to consult for questions about health insurance.
Posted on Thu, Jan 22, 2009
COBRA alternatives are necessary because the program costs more than most people can afford. This law exists to provide continued health coverage after an employee leaves a job. Coverage is only intended to be temporary. When a person is faced with the choice between purchasing private medical insurance and continuing with group health care insurance through COBRA, they must act quickly because they have a 60 day window to enroll in the COBRA plan. COBRA is the acronym that is short for the Consolidated Omnibus Budget Reconciliation Act. This law protects people by allowing the individuals that are eligible to continue their group health care plan for up to 18 months.
Eligible people have a limited time to make their decision about whether to proceed with the plan under COBRA or to instead choose a plan offered through an independent health insurance agent. After 60 days, the person is no longer eligible to use the benefits protected by COBRA.
Here are the advantages of using the COBRA plan:
· Coverage is guaranteed for up to 18 months as long as premiums are paid on time without interruption. There is no guarantee that everyone can find coverage in the private sector. COBRA allows the covered person to continue the policy they had while working for their former employer without interruption. This removes any worry about spending time looking for an alternative to COBRA.
· Group health plans usually have a lot of bells and whistles such as low deductibles, high dollar coverage, and a long list of providers and conditions that are covered. Sometimes it is difficult to find similar choices with private health insurance.
· Pre-existing conditions are often excluded for at least 12 months on private health insurance plans. The length of time the exclusion continues depends entirely on the company. A person covered through their former employer’s group health insurance plan does not have to worry about pre-existing conditions, at least while the coverage continues.
Disadvantages of continuing with the plan through COBRA:
· If a person misses a payment, coverage can be canceled. Once the policy is canceled, it cannot be reinstated. COBRA law requires the insurance company to send notices of nonpayment for cancellation; however, it is easy for a person to miss the notice, leading to an increased likelihood that the policy will be canceled.
· Premiums on a group health care plan are very high in comparison to private plans. The law requires that the covered person pays 100% plus a 2% penalty of all premiums. People often find that their premiums through COBRA are up to three times higher than private health insurance plans.
· COBRA is a temporary fix to a health insurance problem. The very fact that coverage is temporary can be a problem if the covered person finds a job that does not offer healthcare benefits.
Experts recommend that people find an alternative to COBRA as soon as possible to save money and to obtain a policy that is not temporary.
Posted on Wed, Jan 21, 2009
Understanding all of the provisions related to COBRA is daunting even to some professionals and so is information about COBRA alternatives. There are important deadlines that must be met if a person plans on continuing their health insurance after becoming eligible for benefits under COBRA. Most people realize they have more questions after they have had their meeting with the human resources department or received their written notification of COBRA benefits in the mail. It is imperative that people take action to get the answers they need so that they can make an informed decision about whether to continue with their employer-sponsored benefits or to choose a COBRA alternative. Here are some questions that are common:
What is COBRA? Most people don’t even know what COBRA is much less have an understanding about how to sign up for benefits. In short, COBRA is the acronym for a law enacted by Congress in the late 80s. It was set up to protect employees from losing health insurance coverage when there is a death of the sponsoring employee, a divorce, a job separation whether voluntary or involuntary, or a reduction in qualified hours for retaining health insurance coverage. COBRA is not health insurance.
What is a COBRA alternative? Any private health insurance can be an alternative to COBRA. Policies are available for purchase from licensed health insurance agents. Private health insurance policies are contacts made between the person covered and the insurance company, not the employer.
How long do benefits under COBRA provisions last? People can continue their employer-sponsored benefits for up to 18 months. This can be extended for a total coverage of up to 36 months if the person meets eligibility requirements such as disability.
How long do benefits under a COBRA alternative last? As long as premiums are paid, private health insurance policies last until the policy is canceled for nonpayment or the covered person chooses to cancel the policy.
How much will it cost for benefits under COBRA provisions? This is a question that can only be answered by the benefits administrator in the human resources department of the former employer. People who choose to enroll in coverage continuation under COBRA provisions must pay for 100% of all insurance premiums plus a 2% surcharge each month.
How much will a COBRA alternative policy cost? People can get free quotes from a licensed health insurance agent. Premium costs vary by the type of policy and the state where the individual lives. Rates are also affected by health and age.
These are just a few of the many questions people may have about health insurance coverage related to COBRA and COBRA alternatives. People should contact the benefits administrator at their former employer for questions about COBRA. Questions about COBRA alternatives should be directed to a qualified health insurance agent.
Posted on Fri, Jan 16, 2009
There are COBRA alternatives. People often do not understand their options for health insurance coverage. When anyone faces a job loss, divorce, reduction in work hours, or death of a covered sponsoring employee, they may be eligible for extended coverage for up to 18 months under COBRA. COBRA is the Consolidated Omnibus Budget Reconciliation Act adopted by Congress to ensure that eligible people can continue to have access to their employer sponsored health care plan.
Health insurance is complicated. That is why insurance agents must study to pass a complicated exam before they can become licensed to sell it. Most people never read their insurance policies and do not listen or in some cases misunderstand when their employers explain about their rights under COBRA. They make many mistakes that can be very costly:
- People do not ask questions when they do not understand some detail about their rights under COBRA. They may feel embarrassed or intimidated. No matter how stressful it may seem, understanding their rights is a high priority. Everyone should ask as many questions as they need in order to make an informed decision about health insurance.
- People assume their former employer continues to pay for health insurance. Nothing could be further from the truth. Anyone who participates in health insurance under COBRA pays 100% plus a penalty.
- People often think they do not need health insurance. The reasons vary. Younger people think that since they are healthy, health insurance is an unnecessary expense. Others think they will find a job quickly. Not all employers provide health care coverage and these days, new jobs are hard to find. The lesson here is that young people do get sick, and it is a mistake to assume all employers will provide health insurance.
- People do not seek the help of an insurance professional. Paying for benefits under COBRA is expensive. Insurance agents have a number of options to fit the differing needs of individuals and families. They can do a health insurance comparison that will contrast the benefits and costs to the person.
- People think everyone qualifies for benefits under COBRA. That is not the case. The law specifies the eligibilities. If an employer drops health care benefits, employees are not entitled to any protection under COBRA. This mistake goes back to assumptions. People should never make assumptions, but instead they should ask questions to find out if they are qualified.
- Many believe that COBRA is medical insurance. It is not. COBRA is an acronym that is short for the Consolidated Omnibus Budget Reconciliation Act. It is a law enacted to help people continue employer sponsored health insurance for a short period of time.
Health insurance agents work on behalf of the person buying insurance. They can offer consultations that help people understand all of their options in relation to health care coverage. They often have access to Blue Cross/Blue Shield, Aetna health insurance plans, and plans offered by other companies.