Bernard Health COBRA Insurance Guide We get it. Health insurance is complicated! It seems like the rules are always changing, and it can be hard to keep up with notifications and deadlines. Not to mention all of the acronyms and jargon co-pays and co-insurance? PPO? HSA? COBRA? It s like alphabet soup. Who is this guide for? You left your job. Now you have this COBRA packet. What they want to charge you for health insurance seems really expensive. Is this for real? Is there a better option? How do I find it? If any of this sounds familiar, read on... What is included in this guide? First, we ll address the Top 10 Things You Should Know about COBRA. Then, we ll address the most common Health Insurance FAQs from clients of Bernard Health. By the time you finish reading this, we hope you ll have a basic understanding of how COBRA works. If you re like other Bernard Health clients who rely on this guide, however, you may need more help. If you d like more information or have a specific question that isn t answered here, call one of our independent, licensed, and non-commissioned health insurance advisors at 1-800-505-0570. We d be glad to help you save time, save money, and get peace of mind that you re making the best possible decision.... click here today to request your free consultation!
The Top 10 Things You Should Know about COBRA When you leave a company, COBRA can seem like a convenient way to continue your health insurance coverage. But did you know that, on average, people who choose COBRA pay 60% more than people who don t? While it makes sense for some people to maintain coverage through COBRA, others can save thousands of dollars by considering alternatives. Here are the top 10 things to consider: 1. COBRA allows you to continue your health insurance coverage after leaving your former employer. COBRA is a federal law that gives employees (and some retired employees) the right to continue health coverage for a specified period of time. Under most circumstances, you may extend coverage for yourself and dependents for up to 18 months. Under special circumstances, you may be allowed to extend coverage for your spouse and other dependents for up to 36 months. 2. You have up to 60 days to sign up for COBRA Coverage. When you leave your employer, you have up to 60 days from the day you receive your COBRA packet to decide whether to sign up. If necessary, you can even decide to pay your COBRA premiums retroactively to cover healthcare costs that are incurred during that 60 day window. 3. Not all organizations offer COBRA as an option. The COBRA law generally applies to group health plans maintained by employers with 20 or more employees in the prior year. If your employer has fewer than 20 employees, there may be a State Continuation option. Like COBRA, State Continuation laws also allow you to continue coverage as well, depending on where you live. 4. You must exhaust your COBRA coverage in order to qualify for some health insurance plans. Many states allow individuals who have serious pre-existing conditions to sign up for special health insurance plans that don t require medical underwriting. These plans, often referred to as Guaranteed Issue or HIPAA plans, often require members to exhaust all COBRA benefits before you can be accepted. Bernard Health 2011-2012 Page 2
5. If you decide not to sign up for COBRA, there are hundreds of options. Depending on your situation, there can be as few as 3 or as many as 300 health plan options to choose from. Monthly premiums vary by plan design and health insurance company. 6. COBRA is expensive because it s not subsidized by your employer. When you were still working for your former employer, they were paying at least 50% of your health insurance premiums. Under COBRA, they ll no longer pay for coverage on your behalf. In fact, they may even tack on a 2% administration fee, which sometimes results in COBRA coverage costing 2 to 3 times more than what you were previously paying. 7. Timing matters. If you re leaving an employer health plan or transitioning to a government plan that covers pre-existing conditions, it s important to pay attention to the timing of your transition to ensure you don t have gaps in coverage. Some plans require you to enroll within specific windows to qualify! 8. Don t assume you re uninsurable! Every health insurance company has a different list of pre-existing conditions they ll cover. With the passage of healthcare reform, there are more options than ever before for individuals who were previously uninsurable. 9. Rules for employer health insurance are different from rules for individual health insurance. Individual health insurance can be an excellent option for many people, but if you re used to group health insurance through an employer, it s important to understand the differences. For example, maternity coverage often isn t included in individual health plans. 10. Bernard Health can help. Making the right COBRA decision isn t just complicated it s important! Call 1-800-505-0570 today to speak with a licensed, non-commissioned COBRA advisor who can answer your questions. Or click here to request your free consultation Bernard Health 2011-2012 Page 3
Health Insurance FAQs What is a deductible? A deductible is a specific dollar amount that your health insurance company may require you to pay out-of-pocket each calendar year before your plan begins to make payments for claims. What is a co-payment? A co-payment or co-pay is a specific charge that your health insurance plan may require you to pay for a specific medical service or supply. (Ex. $25 for an office visit, $50 to see a specialist). What is a co-insurance? Coinsurance is a term used by health insurance companies to refer to the amount that you are required to pay for a medical claim. These can be separate from any co-payments or deductibles. Most often, coinsurance is your share of costs after you ve met the plan s annual deductible. What is a Health Savings Account (HSA)? A Health Savings Account or HSA is a triple tax-advantaged account that can be used in conjunction with certain types of health insurance plans to help pay for the cost of doctor visits, prescription drugs, and other kinds of medical care. What happens to the unused balance in my HSA at the end of the year? All of the remaining balance left in a Health Savings Account at the end of the year simply rolls over, tax-free, to the following year. Unlike use it or lose it accounts, there is no penalty to carrying over your HSA balance in fact, that is one of the many benefits. Do I need to get a physical when applying for coverage? In rare cases, health insurance companies require a physical to consider your application for coverage. In most cases, medical history information will be required at the time of application, and medical records will be requested from your doctors. If you re over 50 years old and you haven t had a physical in over Bernard Health 2011-2012 Page 4
2 years, recent test results may be required to proceed with a private health insurance application. What happens to my health insurance plan in 2014? If healthcare reform stands as it s written today, everyone will be required to carry some kind of health insurance coverage and individuals will no longer be denied by health insurance companies based on pre-existing conditions. If your current policy carries an exclusionary rider for pre-existing conditions, that rider will go away. Can I change to a plan with a different deductible in the future? Yes. With an individual health insurance plan, you and your family can change to a plan with either a higher or lower deductible. You may, however, be subject to medical underwriting at that time. Can my child get their own health insurance plan? While this varies from state to state, there are fewer and fewer child only plans available. That said, healthcare reform now prevents children under the age of 19 from being declined coverage when they are on their parent s health plan. If your child has a pre-existing condition, however, monthly premiums can be as much as 300% higher. What is an exclusionary rider? A rider is an amendment to an insurance policy. An exclusionary rider is an amendment permitted in individual health insurance policies that permanently excludes coverage for a health condition, body part, or body system. As of September 2010, under the Affordable Care Act, exclusionary riders cannot be applied to coverage for children. Starting in 2014, no exclusionary riders will be permitted in any health insurance. Do exclusionary riders continue for the life of the health insurance policy? In most instances, the exclusionary rider is attached for the life of the policy. In some instances, the rider will state that it may be reviewed at some time in the future (usually two years). It is up to you as the policyholder to request the review. The rider will not be automatically reviewed or removed by the health insurance carrier. Bernard Health 2011-2012 Page 5
Are health insurance companies required by law to issue individual policies to anyone who applies? No. Companies that issue individual coverage underwrite the applications prior to the policy being issued. Underwriting is based on many things including, by not limited to, age, health status, occupation and certain hobbies. It is important to note that if a policy is issued other than as applied for; the company must provide reason for offering exclusions or a declination, upon request. Can I return my policy if I m not satisfied? When a policy is issued to you, most health insurance companies offer a free look period of 10 days to review the policy and make certain that it meets your expectations. If you are not satisfied with the policy, you may return it within the 10-day period and request a full refund of your first month s premium. Is there anyone who can help me make the best possible decision? Yes. Bernard Health s licensed health insurance advisors are independent and non-commissioned. We re familiar with the wide array of health insurance options, and we work hard to understand your needs and then make a clear recommendation to you, with options, in an understandable way. The result is that we save our clients time and money while giving them peace of mind that they are getting the best advice. We work with clients in all 50 states, and consultation is available in person at one of our retail locations, over the phone, and via webinar. Call 1-800-505-0750 today if you have additional questions, or click here to request your free consultation. Bernard Health 2011-2012 Page 6