On Point Insurance (insuranceonpoint.com) knows that just over half of all Americans access health insurance coverage through their employer’s group plan. Whether an employee voluntarily leaves a job to pursue other opportunities, start a business, retire or due to termination, replacing the health insurance coverage previously offered from their employer is an important step in the process.
If the employer had twenty or more employees, the employee leaving will be given a COBRA (Consolidated Omnibus Budget Reconciliation Act) offer to continue on the employer’s plan for a limited period, usually eighteen months. Employees who continue their employment but have reduced their hours and have become ineligible for employer coverage are also eligible for COBRA. Qualifying life events like divorce, legal separation or death of the employee may make the spouse and dependents eligible for COBRA.
While the coverage can continue, the individual will now be required to pay for the entire premium. There are times when choosing COBRA is the best option despite the cost. Because employer plans often utilize a PPO network which includes nationwide network access, if the employee plans to travel extensively or has children studying in another state, it might be best to choose COBRA. It also may be the most cost-effective choice to continue the plan instead of starting a new deductible, obtaining new prior authorizations and other issues that can be associated with starting a new plan halfway through a policy year if the employee or family member has already had extensive medical expenses for that policy year.
It is important to note that COBRA is not considered creditable coverage if an individual is 65 or otherwise eligible for Medicare. COBRA will also not be offered to individuals who were terminated for gross misconduct, who had not been enrolled in the employer plan or are non-resident aliens not earning income in the US. Being employed by a church or church-controlled employer also prevents COBRA eligibility.
There are other options to choose from when losing employer coverage. Because of COBRA’s expense, choosing an Affordable Care Act plan may be a more cost-effective solution for individuals and families while seeing other employment opportunities, building their own business or bridging coverage until Medicare eligibility begins. There are additional short-term or association-based options available for those able to pass basic medical underwriting.
Sorting through options can feel overwhelming. The licensed insurance agents at On Point Insurance Agency offer free consultations and make its clients’ best interests its priority.
Learn more at insuranceonpoint.com.