COBRA insurance can serve as a critical stopgap solution when someone loses his or her job and the health benefits that come with it.
Established by Congress in 1986, the COBRA program allows employees who have been laid off or fired to continue paying for and receiving health insurance through their company.
The program typically provides coverage for 18 months. But as Southern Nevada’s job market struggles to recover after the recession, some people are unable to find employment before their COBRA coverage runs out.
Alternatives to COBRA exist, but they are often more expensive or apply only on a short-term basis.
VEGAS INC spoke with Larry Harrison, president of Harrison Insurance Agency, about options to consider when your COBRA insurance runs out:
Individual insurance plan
Because of the high costs of COBRA insurance — in which employees generally become responsible for paying both their share of their premium plus their employer’s match — individual insurance plans purchased through a broker can be less expensive and more attractive in some cases, Harrison said.
“COBRA was never really designed for people to take and exhaust the full 18 months,” he said. “It was designed more as a bridge.”
Pre-existing conditions can cause problems in acquiring individual plans, but Harrison said COBRA could be used to cover a family member with a pre-existing condition, while the rest of the family rolls off into an individual plan, often at a cost savings.
If you’re denied for a plan, Harrison said to be persistent and keep searching, because you may qualify for another plan.
“A lot of folks think that because they were turned down by one company, they’re totally uninsurable. That’s not true,” he said.
Temporary health insurance
Temporary health insurance plans provide basic coverage at an affordable price, on a limited basis, Harrison said.
Often based around a high-deductible model, the plans help protect against catastrophic injuries and serve as a viable option if an employee has another job lined up and just needs to wait out the required eligibility to enroll in their new company’s plan.
The plans last for six months and can be renewed once, but Harrison said they shouldn’t be used as a long-term fix.
“If you have a catastrophic claim, you won’t be eligible for an individual plan and you won’t be eligible to renew your short-term plan. You run the risk of finding yourself uninsured and uninsurable.”
Another federally enacted health care program, HIPAA plans offer guaranteed issue for people who have kept up 18 months of continuous insurance coverage, whether through their employer or through COBRA.
The program is a good option for people with pre-existing conditions who can’t find coverage elsewhere, but it comes with a steep price, as premiums can range anywhere from $600 to $1,200 per month per person, Harrison said.
Medicaid and CHIP
Medicaid and the Children’s Health Insurance Program offer health care solutions for low-income families, and Harrison said the long-term unemployed often meet the criteria to qualify for the program.
But people often struggle making sense of the different eligibility requirements for the program, Harrison said.
“People don’t know how to get into (the program),” he said.
Harrison advises people who think they may qualify for these programs to consult an insurance broker who’s a member of the National Association of Health Underwriters.
One way to obtain health care coverage while searching for full-time employment is by taking a job with a company that offers health insurance to part-time employees, Harrison said.
Employers such as Lowes Home Improvement, Home Depot and Starbucks offer employees working as few as 20 hours a week the opportunity to buy health insurance, he said.