Maintaining health insurance coverage is a vital step in your plan to remain financially secure. However, there are times in life when your health coverage may be interrupted. When this happens, it’s imperative that you find affordable health insurance coverage quickly in order to protect yourself and your family.
Why Would My Coverage Be Cancelled?
There are a few factors that could contribute to the loss or interruption of health insurance coverage. If an individual does not pay their premium, their policy may be canceled. This is not always a result of poor money management; if there has been a significant change in income or other pressing financial obligations, it is easy to redefine financial priorities and let those monthly insurance premiums slide. It is also possible that individuals can lose their coverage when a grandfathered plan is canceled. However, the loss of a job which provided insurance coverage is the more likely reason someone may lose their benefits.
These factors are very hard to foresee, and therefore can be very stressful when you learn that your health insurance coverage is going to be affected. However, as soon as you find out your coverage is being canceled, there are steps you can take quickly to make sure you maintain health insurance coverage for you and your family and protect your financial stability.
Option #1: Continue Existing Coverage through COBRA
COBRA is a Federal law that makes it possible for individuals who were covered under company health insurance plans to maintain those existing plans following a job loss. In order to take advantage of COBRA benefits, the individual must pay the full monthly health insurance premium amount. These amounts are usually substantially higher than what you were previously paying because in most cases the employer was paying a portion of your monthly premium. The COBRA plan, however, does ensure that your existing policy will stay intact for up to eighteen months following a job loss. This is crucial for many individuals who have severe health problems and would be in financial jeopardy if they lost their coverage for even a short amount of time.
Option #2: Purchase a New Plan on the Insurance Exchange
If an individual loses health insurance coverage due to the loss of a job, purchasing a new health insurance plan on the insurance exchange could be the better, and more affordable, answer to your problem. The Insurance Exchange is a multi-carrier private exchange offering a wide range of health insurance choices for individuals and their families.
These types of benefits are time-sensitive, so it is best to begin the process before losing your insurance coverage. Although insurance exchanges usually have set open enrollment periods (running from November to February), those who suffer from a job loss are offered a Special Enrollment Period to allow them to obtain coverage within a specific time frame after the job loss occurs. Watch our recent webinar on Special Enrollment Periods to learn how these work and some of the limitations involved.
Which Do I Choose?
The most cost effective solution for most people is to seek a new plan entirely. Insurance plans on the exchange offer generally lower monthly premiums than what you’d pay for your existing plan under COBRA. However, it is crucial that you do not waste time, as the special enrollment period for these plans is 60 days from the qualifying event or last date of coverage. It is important to act quickly to get the best selection of plans and ensure you are able to obtain coverage within the required time frame.
If you have recently lost your health insurance coverage, as a member of the Texas Bar you are eligible to shop for a new plan on the Texas Bar Private Insurance Exchange, with health care plans and rates available exclusively to Texas Bar members. Click here to register for the exchange and find a new plan that works for you.