Unfortunately, in today's economical environment many Californians are experiencing job losses of some kind. Perhaps you've been laid off, or the company you once worked for has gone out of business and closed its doors. Of course, it may also be the case that you left your position in hopes of other opportunities that you simply haven't come across yet. When it comes to your health insurance coverage, there are a few options you may have to help protect your family against financial hardship caused by major health costs during this time.
COBRA and Cal-COBRA
The federal and state governments have built some protection into your employer-paid benefits. COBRA benefits, or Consolidated Omnibus Budget Reconciliation Act, allow displaced workers and their families to continue their employer-provided coverage for up to 18 months. This only applies to companies which employ 20 or more people, and requires you to pay 102% of the full group premium rate. COBRA benefits can be expensive but this still offers a way to keep your family under the umbrella of protection; this can be very important if you or someone in your plan suffers from a pre-existing condition that may not be considered insurable by a private insurance company.
After this initial 18-month period, Cal-COBRA, California's version of the extended benefit program, can allow you to keep this coverage for an additional 18 months if needed. This Cal-COBRA option will require you to pay 117% of the full group premium so it can be even more expensive but maintains your coverage.
These two programs mean you have every opportunity to maintain your current coverage for up to three years if you choose, without ever having to change plans or companies. If you happen to have worked at a company with fewer than the COBRA-required 20 employees, you may still utilize the Cal-COBRA option.
HIPAA Guaranteed Issue
After your COBRA and Cal-COBRA options have expired, you will be able to enroll in a HIPAA conversion plan. HIPAA, or the Health Insurance Portability and Accountability Act, allows anyone with a pre-existing condition who has lost their employer-provided coverage to be offered a guaranteed-issue plan.
In order to utilize the HIPAA conversion plan option, you must first expire all of your COBRA and Cal-COBRA options. In addition, HIPAA requires that you have had insurance coverage for the past 18 months, and you do not have access to other health insurance. This option is also null and void if you lose your COBRA or Cal-COBRA benefits due to failure to pay your premiums at any time.
HIPAA conversion plans may also apply in other special circumstances. If your former employer goes out of business, or even if you haven't lost your job but your employer stops offering group coverage, you will have the option to choose a HIPAA plan for your family. Because the group coverage no longer exists, you will not have a choice to utilize COBRA or Cal-COBRA.
Individual Policy
If you have exhausted or don't qualify for COBRA, Cal-COBRA or HIPAA coverage options, you may only be able to seek a new individual insurance plan through your choice of insurance companies. This means that you and your family will be subjected to medical underwriting, and if accepted could receive rate increases for smoking, obesity, or other issues that could be considered risks to your health.
The major advantages to enrolling in an individual policy are that premiums are generally much less expensive than COBRA or Cal-COBRA options, and you can have as much flexibility as you choose in your providers and plan. However, you may have to opt for a larger deductible or forego extras like vision and dental coverage. If you have a pre-existing condition that would qualify you for HIPAA coverage, you will be unable to obtain an individual policy. If certain members of your family are uninsurable, another option is to utilize HIPAA coverage for those members only while enrolling the rest of the family in a less expensive individual coverage policy.
Major Risk Medical Insurance Program (MRMIP)
If you were laid off and your employer did not offer group coverage, and you do not qualify for an individual policy, your options are very limited for obtaining health insurance. The Major Risk Medical Insurance Program, or MRMIP, is a program subsidized by tobacco taxes which provides coverage to California residents who can't qualify for an individual policy. Benefits may be slightly limited and premiums may be more expensive but this option prevents you from being unprotected in case you need medical attention.
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