Losing a job is one of life’s biggest stressors. Not only are you losing income, but the loss of benefits can be a significant source of stress as well.
What is the first thing you need to do when you lose your job? My first words of advice are to take a deep breath! You’ll be able to get benefits. You have a bit of time to decide what is the best choice for you and your family.
Depending on the size of your former employer, there is COBRA. This is a federal law which gives workers and their dependents the option to continue with the employer’s group coverage for 18 months. Often this is quite expensive because by law, the employer must pay at least 50% of each eligible employee’s premium. When you are offered COBRA you will most likely pay the full premium amount. You don’t have to make this choice immediately. You have 60 days from the end of coverage during which time you can retroactively elect the coverage. Sometimes it makes the most sense to pay these premiums. Before you make a decision, consult a professional.
The loss of a qualified health plan allows you to have a special enrollment period. A qualified life change event that results in the loss of coverage allows you to purchase health insurance through your state or through the federal health insurance exchange outside of open enrollment.
The plans offered through the exchange are very close to those offered “off exchange” or directly through the insurance company. The plans are ACA qualified which means that each plan must offer certain benefits. Without going in to too many details, these plans must all cover pre existing conditions without exceptions or waiting periods. There is also no cap on benefits. If you are currently undergoing treatment, you can continue without issue. You cannot be charged more for pre existing conditions. While you don’t have to disclose your health issues when shopping for coverage, doing so is helpful as it helps your broker to find the plan which best suits your individual needs. A professional broker is very helpful in this situation as they are trained to help you find the best plan for you. Something you may not know is that brokers are not paid on commission, so using a broker is in your best interest, as their job is to help you find the best match. You are able to get an advance premium tax credit to use to purchase your health insurance if you purchase through the exchange. APTC is based on a calculation of income and household size. A professional can guide you to the correct way to apply for this credit.
There are alternatives to individual health insurance as well. Some of those alternatives are healthshare plans. The healthshare concept is not new, it was first started many years in churches. The members of the churches would pool their resources and when one person was sick, they would pay for that person. When the ACA was signed into law, the healthshare companies were fully vetted and 5 were allowed to remain in existence. Healthshare is not insurance, but it can be a great fit for the right person. Before purchasing it is imperative to have a professional explain ALL that the plan entails and more importantly, what are the exclusions!
Minimed or indemnity plans are also options. These plans can leave you very exposed. Often they look great on paper, and it’s not until you need to use the insurance that you find out that it is not exactly what you were told. One way to determine if this is what you are being shown is to ask the professional you are working with to show you a few different options if they are not showing you plans on an exchange. Usually indemnity type of plans are sold by captive agents who don’t have the ability to offer anything but that plan. Read the fine print, if you don’t understand it, find someone to assist you who does.
As I like to tell my clients, there unfortunately are no unicorns. Gone are the days where insurance was affordable and had low out of pocket costs. It just doesn’t exist anymore. The best plan for you may not be the best for your neighbors. Don’t crowdsource the shopping of health insurance.
I once had a person call me wanting health insurance. A young healthy male who “never got sick” He really felt that it was a complete waste of money and did not follow my recommendation. This same guy called me back a few weeks later asking if I would be able to get him coverage and back date it because he really needed it. That was never an option, but I had to ask why he wanted this so bad. This healthy young guy was hiking with friends and was bitten by a rattlesnake. He was helicoptered off the mountains and given antivenom. He received a bill for $250,000. The moral of this story is obvious.
Yes, you absolutely need health insurance, but the type that is best is not something I can recommend without having more information. Use a certified broker who has your best interests in mind, you may be surprised to find it may be more affordable than you think.