| Counting on COBRA? Check the rules |
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Step one, according to Hamburger, is to get the insurance plan summary from your old employer. Even better is to get all the details, meaning the complete plan.
Some insurers have the plan summary online to save printing costs.
If the phrase "plan summary" doesn't ring any bells,
it's usually around 30 pages and your employer is legally obligated
to provide you with it as soon as you're eligible for health insurance.
Sadly, though, many employees never actually get a
copy -- often because eligibility sometimes starts weeks or months
after hiring, and by then the paperwork might be forgotten.
Obviously, it's best to ask for a copy when you start a job, not when you leave it.
You can't get fired for asking
But Hamburger emphasizes that, under the law, an employer cannot
terminate you or otherwise cause problems for you if you ask about
these details.
And you have plenty of time after a "qualifying event" to clarify what you're entitled to.
You have 60 days to sign up for COBRA, Hamburger says,
and during those 60 days you certainly should ask any questions
to make sure you are on the plan that will give you the most benefits
in your new location.
Fortunately, you also have some extra time between
when you leave your job and when you must pay up for COBRA, Hamburger
says.
"You have 60 days to elect from when you get the notice,"
says Hamburger. Then, after those 60 days, you have 45 days to pay,
giving you a 105-day window.
COBRA, something else or nothing
Many insurance pros will tell you that going with absolutely no health-care coverage is a gamble. Health costs, after all, are behind nearly half of bankruptcies.
And if you do some insurance shopping, you'll discover that finding
affordable insurance is tough. So don't get too comfortable with
that 105-day window in which to pay up, particularly if you have
a pre-existing medical condition.
If you do have a pre-existing medical condition, you should be
very careful when making COBRA decisions. That's because there's
another federal law involved.
Under the Health Insurance Portability and Accountability
Act of 1996, or HIPAA, group insurance plans may only exclude your
pre-existing conditions for up to 12 months -- 18 if you're a late
enrollee -- minus your period of prior coverage. (A "late enrollee"
is someone who doesn't enroll when he or she is first eligible to
do so, except for those people who enroll through a special enrollment
opportunity due to marriage, birth of a child, adoption of a child
or certain other limited circumstances recognized by regulations.)
In other words, if you were covered under your old insurance plan for more than a year, you could get coverage immediately. However, if you go without insurance for 63 days or more, your new job could start the clock again, making you wait another year before you're eligible. And that can be a very expensive year for you.
Here's where your COBRA coverage could look like a bargain if you make the correct choices for your individual situation.
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