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.
There is a steep price that comes with COBRA continuation of coverage benefits; with administrative fees this cost amounts to 102% of the actual cost of the insurance. This can cost you practically your entire unemployment amount, but you can possibly recoup some of this cost if you qualify for reimbursement of premium cost under the American Recovery and Reinvestment Act of 2009. This provision will enable to you to get up to 65% of the total cost back for a total period not lasting more than 9 months.
If your COBRA subsidy is about to run out, you can consider getting an individual health insurance policy for yourself and other family members as a way to make COBRA coverage more affordable. When selecting a private policy, you can choose between an HMO and PPO health plan. HMO and PPO are common health insurance terms for the main types of managed health-care systems. A Health Maintenance Organization (HMO) plan requires you to get all your health care service from providers who are members of the HMO network. Under an HMO plan, you will need to select a primary care physician who will be your main health services provider and will refer you to other specialists in the HMO network as needed. A Preferred Provider Organization (PPO) on the other hand, does not require you to get your care from health providers within the PPO network, but will penalize you if you choose to go outside the PPO network by paying for their services at a lower rate or not paying for them at all.
The pros and cons associated with HMO vs PPO insurance are simple to understand. Typically both of these plans are affordable, so cost is not normally a deciding factor. If you have a medical professional you happen to trust with all of your health concerns and you value preventative care, a HMO would be good for you. If you are one who would rather have freedom in your health care choices or may want to go to various specialists within your network, the PPO plan is a better choice.
Looking to understand COBRA health insurance coverage, then visit www.find-health-insurance-online.com to find common health insurance terms and what they mean.
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