When you get the surprise of a sudden change in employment status and become unemployed, keeping your health coverage can be a challenge. Designed to be a protection for those who face this situation, COBRA was created by the federal government. COBRA stands for the Consolidated Omnibus Budget Reconciliation Act of 1986; this allows employees displaced by termination, lay offs and voluntary resignation the opportunity to continue their health insurance for up to 18 months following the employment change in status.
You can qualify for COBRA health insurance coverage in cases where the employer you no longer work for had a group plan with a minimum of 20 employees enrolled into it and you were a member of that plan for at least six months. If any other members of your family were also enrolled under the same plan, they are also able to get COBRA- even in the case that you choose to not get it yourself. The nature of your ‘qualifying event’ can mean that you can get COBRA benefits for up to 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.
Before your COBRA continuation of coverage benefits expire, you should take a look into the purchase of an individual policy for yourself or any other person who was covered under your COBRA benefit. Private policies come in the form of HMO and PPO plans. Though you may not be familiar with these plans, these are common health health insurance terms for managed care systems. If you are a member of an HMO (Health Maintenance Organization), you have one specific physician who acts as the gateway to all other heath care services you may need. In opposition, being a member of a PPO (Preferred Provider Organization) means that you can acquire care from any doctor in your network.
So what are the pros and cons of getting HMO vs PPO insurance? While both can be affordable, you should get an HMO if you care more about preventive care services and you don’t have a preferred doctor. On the other hand, a PPO might be the better choice if the doctor you’re already seeing is a member of the PPO network or you want some freedom to direct your health care since you can see any specialist you want as long as they are a member of the network.
Want to find out more about COBRA continuation of coverage benefits, then visit Kristaria Dawson’s site on how to choose the best COBRA health insurance coverage for your needs.
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