Employer based health insurance provides coverage for many millions of Americans. Unfortunately, many employees will probably be without coverage when they lose their job, quit, retire or if their company fades of business. In most cases, an employee can elect COBRA upon losing employment. The Consolidated Omnibus Budget Reconciliation Act provides 18 months of additional coverage as long as the group consisted of 20 or more employees. In Ohio, when the group is under 20 employees COBRA enables up to 6 months of coverage. This law is sometimes referred to as “Baby COBRA.”
There are particular rules regarding who’s eligible to elect COBRA and what the cost will be, but in all cases COBRA is temporary insurance for the insured. Additionally, the expense for the former employee could be significant. Ultimately, the fee will be based on the premiums for your former plan along with a 2% administrative fee. Former personnel are often surprised to find how much you will be charged to elect their company insurance through COBRA.
Individual Health Policies for Healthy Consumers
Once their COBRA benefits have go out, individuals and families will need to search the average person health market. If you are in a healthy body, usually there are few problems obtaining someone or family policy. However, in the event the former insured is in poor health – finding a comprehensive policy can be quite difficult. You will find providers who’ll insure high risk individuals, but usually the benefits for the insured are much less than their employer sponsored plan. When possible, a person in poor health may only be able to find adequate coverage in another employer sponsored plan. Your Ohio has an HMO plan providing open enrollment with select companies. The protection offered will vary by county and the enrollment window will change from company to company. However, you can expect these promises to be very costly.
Purchasing Permanent Coverage
Thus, you need to explore your options as soon as you lose your employer sponsored coverage. COBRA is a good idea, but which is not permanent, new coverage will often be needed sooner or later. One potentially difficult scenario can be easily avoided by buying insurance early. Electing COBRA while in good health and waiting to try to get permanent coverage until the allotted 18 months expires can be a risky proposition. What if your health changed for that worse in that period of time? You could have difficulty finding coverage within the individual market. However, you would have been insurable had you sent applications for a plan soon after becoming unemployed. Oftentimes, the permanent individual coverage could be less expensive as well.
In summary it will always be advisable to have permanent health insurance coverage when you are in a healthy body. Once accepted, you can preserve this coverage provided you need it. If you rejoin a group plan later, you could elect to decrease the coverage or maintain it if you feel that you have a superior plan.
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