COBRA and Insurance Shopping Tips
I blogged about some basic information when shopping of individual insurance and recently there was an article in Business Week about COBRA. I found a few more information that are worth keeping in mind when shopping for insurance.
Facts about COBRA:
- Decide within 60 days of qualifying event whether to take cobra or not. Qualifying event is changing job (voluntary or involuntary).
- More info about Cobra: dol.gov/ebsa/cobra.html
- cobra is valid for 18 month. Obama govt. is subsidizing premium by paying 65% of the premium (for the first 9 months of the full 18month coverage)
- This 65% subsidy is not available for somebody who has another group plan option available (like spouse’s employer insurance plan)
- COBRA coverage is usually the same coverage that the employee had when on job. It has the same premium + 2% administrative fee. However, employee becomes responsible for full premium (unlike employer paying 2/3rd premium when employed).
When shopping for health insurance, look out for following things:
- StateHealthFacts.org: information about consumer protection, plan features required by each state
- Ask insurers for “Explanation of Benefits (EOBs), which are more detailed than summary. Insurers hesitate and sometimes provide EOBs only after you are signed up. Ask to see EOBs before signing up.
- Avoid plans with annual benefit caps. Lifetime benefit maximum of 1.5 to 2 million are more common now.
- If employer based group plans are not available, look for association based group plans. e.g. New York Freelancers Union. Each have qualifying rules.
- There is a difference between insurance plans and “limited-benefit” plans. LB plans (usually touted on TV and offer doctor visit, prescription discounts) don’t cover surgery and hospital stays.
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