Know your Health Insurance Rights during a Lay-off

Providing health coverage for laid-off workers is good health
policy for all employers. This can take away some of the sting from
being out of work and COBRA payments. Tax credits for laid-off
workers are also available and can be a valuable element of a
phased-in national strategy to assist the uninsured. Laid-off
workers can receive effective, temporary “bridge” coverage between
jobs using the COBRA law. These benefits will be the same as with
their employer but at a higher cost. There are advantages in
targeting this on this group for helping. Providing health
insurance to persons becoming unemployed will help keep these
people on the map so to speak. One of the biggest problems with
American health insurance after unemployment is the disappearance
of it. Most uninsured Americans had health coverage at some recent
point but then lost it, typically because of unemployment, or some
other reasons, such as aging out of a parent’s policy or wage
in-creases that exceed public program limits.

Targeting these people for aid or assistance in lower premium
insurance will help reduce the number of uninsured. And as
suggested by many American public opinion polls, there is more than
90 percent public support for helping laid-off workers. This
addresses an important worry in the 165 million Americans under age
65 who have employer-based insurance. They too are afraid that a
pink slip could end their health insurance. Helping laid-off
workers obtain health coverage, regard-Less of the cause of their
unemployment, would also remedy an inequity created by the Trade
Act. It is hard to justify covering unemployed workers whose
lay-offs result from foreign competition while denying help to
equally needy and hard-working Americans who are laid-off for other
reasons.

Moreover, a simple tax credit targeted to those who lose who lose
their jobs due to layoff would not risk unraveling or jacking up an
employer’s group coverage. Some policymakers fear that such tax
credits to assist the employed uninsured could cause some
businesses to drop coverage. Also young, healthy workers could take
up credits, leaving employers responsible for the higher-cost group
left behind. If credits were limited to laid-off workers and not
include working persons refusing health care plans, this would be
anything to worry about. One national survey found that 52 percent
of uninsured adults lost health coverage because they or a spouse
lost their job. No other single cause of insurance loss was
re-ported by more than 12 percent of uninsured adults. The only
thing these people have to turn to is COBRA, which when unemployed
can sometimes be impossible to pay for.

The federal Consolidated Omnibus Budget Reconciliation Act (COBRA)
is for workers who lost health benefits through voluntary or
involuntary job loss, reduction in work hours, or transition
between jobs. This gives them the right to continue group health
benefits through their current plan. COBRA requires that employers
with 20 or more employees that offer group health plans must offer
a temporary extension of health benefits. Under COBRA, employees,
their spouses and dependent children are eligible to continue
coverage for up to 18 months following lay-off or reduction in work
hours. Employers are not required to pay for continuing coverage as
the did when the person was employed with the company. The workers
are responsible for the full price of the plan and may be required
to pay up to 102% of the cost of the health plan

If your spouse or domestic partner is covered under employer-based
coverage you and your dependent children may be eligible through
that plan’s dependent coverage. Again, employers are not required
to pay for such coverage, and you may be required to pay the full
cost of the health plan. For more information, contact your spouse
or domestic partner’s employer. The only problem with this option
can be that you may have to wait till open enrollment to be able to
change the policy. Some employers will only let changes to be made
if there is a birth, death, divorce or marriage taken place. Other
than that most have to wait 12-18 months for the next opportunity
to add new people or change their benefits.

Private Health Insurance may be purchased by anyone directly from
any company that deals with health plans. However, individual
policies are generally priced higher than those through a group
plan, and insurers can ask about your health history and may
exclude “preexisting medical conditions,” deny coverage, or charge
less than healthy people a higher rate than they charge healthy
people. For more information contact the health plan or insurance
broker of your choice listed in the Yellow Pages under “Health
Plans” and “Insurance.” When deciding on a policy it is best to
speak directly with an agent. Make sure you get several different
opinions before deciding on a plan.

Know your Health Insurance Rights during a Lay-off

DISCLAIMER: This information is for educational and informational
purposes only. The content is not intended to be a substitute for
professional advice. Always seek the advice of a licensed Insurance
Agent or Broker with any questions you may have regarding any
Insurance Matter.