July 10, 2009

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An Unhealthy Circumstance

Keeping Health Coverage Between Jobs

By Spencer Sutherland

July 10, 2009

There are few things more difficult than losing your job. Along with unemployment comes a seemingly infinite number of worries, especially how you will afford health insurance. Though securing and financing coverage is much more challenging without the benefits of a group plan or employer contributions, there are options available to get you through the tough times. “The first thing to remember about choosing a new health plan is that there is a definite limit on how much time you have to make your decision,” says Jesse Liddell, Government Programs coordinator for HIPUtah, Utah’s comprehensive health insurance pool. “Even in times of financial difficulty, it’s not a good idea to go any amount of time without insurance,” Liddell says. Without insurance, you put yourself at risk for unexpected medical expense, but more importantly, you could lose portability of your prior insurance; if you incur more than a 63-day break in coverage, your pre-existing medical conditions may not be covered by your new carrier. Given the ticking clock, where do you begin your insurance search? Commercial Health Plans If you and your family are healthy, coverage through a commercial health plan is the most affordable and versatile option. But before you pick a plan, it’s a good idea to evaluate how long you anticipate being out of work. “Most insurance carriers offer a short-term plan for people who are in between jobs,” says Tim Gill, senior marketing analyst at SelectHealth. “These plans generally only allow coverage for six months and do not require medical underwriting. That means you could be covered as soon as a day after applying.” If you know how long you’ll need coverage, you can pay for the exact number of days upfront. Rates and coverage are comparable to more traditional plans; the only drawback is that preexisting conditions are not covered. If you’ll need coverage for more than six months, a traditional individual/family plan is the best option. Any independent insurance agent can help you shop for rates and plan designs. COBRA Coverage If you or a dependent family member has a serious health condition, and you fear that you may not qualify for a commercial policy, there are other options. By federal law, large companies are required to offer terminated employees continued (COBRA) coverage for up to 18 months. (COBRA and mini-COBRA may also be available to small business employees). The benefit of COBRA is that you keep the exact coverage as when you were employed, without having to reapply. The major drawback is the cost. You are required to pay your regular premium, the amount your employer was contributing and a small administrative fee. This is generally much more expensive than an individual plan, as employers tend to purchase better benefits for their employees. However, there is good news for COBRA users. As part of the American Recovery and Reinvestment Act of 2009, the government will subsidize 65 percent of COBRA premiums for nine months for those who are involuntary terminated from their job between September 1, 2008 and December 31, 2009. Closer to home, Governor Huntsman has led the initiative to give Utahns an alternative to COBRA. The forthcoming NetCare plan would allow terminated employees the option to choose a lower cost, bare bones plan, with coverage lasting up to 12 months. Further details are yet to be unveiled, but the plan is scheduled to take effect January 1, 2010. HIPUtah Once COBRA coverage has been exhausted, there is one more option: HIPUtah. The state’s high risk insurance pool helps those with serious medical conditions, such as diabetes, cancer, heart disease and other chronic illnesses, that make them unable to obtain health insurance. Eligibility requirements are relatively straightforward: an applicant must be uninsurable, a resident of Utah for at least 12 months and not eligible for any other group or government insurance plan, such as Medicare and Medicaid. Though the premiums are generally higher than an individual/family plan, HIPUtah members can stay insured as long as they continue to meet the three eligibility requirements. Unlike other government programs, HIPUtah is not based on income requirements. However, the federal government has approved a grant to provide premium assistance for lower income applicants. Where to Turn for Help Taking care of your own health coverage can be challenging, but certainly not impossible. Though the Internet is a great tool for searching for plans and rates (sites like www.ehealth.com work like the Amazon of health insurance), local insurance agents are usually the best resource to find the plan or program that best fits your needs.
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