Insurance Between Jobs

With double digit unemployment, lots of folks are worried about being able to pay bills, but maybe even worse is having lost health insurance. The cost of a simple doctor's appointment averages $300. Prescriptions are astronomical, and a stint in the hospital can cause bankruptcy and worse.

Know that you may be protected under the Consolidated Omnibus Budget Reconciliation Act (COBRA). Created in 1986 by Congress, this law ensures continuing group health insurance for employees who have lost coverage because of reduced work hours or for termination for any reason other than gross misconduct.

The Act requires employers to allow former employees, retires, spouses, former spouses, and dependent children to continue their current health insurance coverage at group rates. Employers with 20 or more employees for more than 50% of the prior business year must comply. The only employers excluded are the Federal Government and some church groups.

Some states have expanded the provisions mandated by the Federal Government. For example, COBRA guarantees continuing coverage for 18-36 months. The state of Texas allows its citizens an additional six months of protection. You and your employer are governed by the laws affording the greater benefits. Call the United States Department of Labor at 866-444-3272 or visit www.dol.gov for more information.

COBRA is not automatic. You must elect continuing coverage. See your employer’s benefits coordinator or human resource representative for application. Your employer has 30 days within which to notify the COBRA insurance plan administrator. Then you have 60 days after qualifying to elect coverage and 45 days to make the initial payment.

The reason you choose COBRA is because there are alternatives to consider. You might find a more inexpensive health plan (with modified coverage, higher deductibles, and more out-of-pocket payments) through a professional group or organization in which you’re a member or through another health insurance company. Often these are stop-gap policies for applicants in good health with no preexisting conditions. Call the Texas Department of Insurance at 800-252-3439 for guidance.