Should You Take The COBRA And What Is HIPPA?
If you are leaving a workplace group insurance plan and will not be covered by a new workplace group insurance plan should you choose COBRA? What is COBRA? COBRA stands for Comprehensive Omnibus Budget Reconciliation Act of 1986. It applies to workers at companies with 20 or more employees. If you leave the company you have the right to continue on your employer’s plan for up to 18 months and sometime longer. Essentially, you can continue your same coverage and not have to be concerned about being turned down because of illness or a “pre-existing condition.
Why doesn’t everyone choose COBRA when they are in this situation? Because you now have to pay not only your share of the insurance premium but the part that your employer was paying and possibly a two percent administrative fee. Our local newspaper reported that the amount can be over $1,000 a month for a family, based on the average cost to employers of $12,000 per employee for health insurance last year. The article also noted that only about 20 percent of workers who were eligible for COBRA chose the COBRA option.
What the article said that I found interesting was that if you had a good plan at work, you should take the COBRA, because it is likely to be better than anything you can get from the individual health insurance market. Insurance experts say especially if you have a pre-exisiting condition – take the COBRA.  If you take the COBRA option it not only gets you the coverage you are used to but it also “preserves your right to buy insurance.” Keeping up your coverage with COBRA makes you “HIPPA-eligible” when you enter the individual market. HIPPA stands for the Health Insurance Portability and Accountability Act of 1996. The HIPPA requires states to have at least two policies available with pre-existing conditions exclusions.
If a state doesn’t have those two policies available, then it must set up an assigned risk pool. Assigned risk pool means insurers in the state share the coverage for people unable to buy a policy on the open market. Some states regulate what the assigned risk pool can charge as a premium but other states do not.
The other important thing the article mentioned was COBRA and HIPPA have deadlines. It said you have a right under the law to COBRA benefits, but you lose that right if you fail to exercise it within 60 days of the termination of your group coverage. You have 63 days from the expiration of COBRA coverage to apply for HIPAA-eligible coverage.
Check our post on individual health insurance at bestquotes.com best-individual-health-plan
[tag]Cobra,cobra-insurance,hippa-law,hippa-regulations,what-is-hippa,individual-health-insurance[tag/]
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One Comment on Should You Take The COBRA And What Is HIPPA?
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Cobra Health Insurance Benefits and HIPPAA on
Fri, 11th Apr 2008 5:14 am
[...] the workplace, and health insurance so expensive, many people are indecisive about choosing the COBRA health plan option. If you work for many companies you are entitled to continue with the group health insurance [...]
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