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Losing my dependent status – what are my options?

Posted on: November 7th, 2012 by Cobra Insurance Guide

Dear COBRA Insurance Benefits –

I am on the verge of losing my dependent status and have no idea what to do for health insurance. I have been on my parent’s insurance plan forever and am currently unemployed so there is no option for insurance from a company. The plan I have with them is really comprehensive, it seems like everything is included. But with that said I hardly ever use anything unless I randomly catch something. I would say I have used the coverage probably once in the last three years. I am pretty healthy in general.

With that said I am not willing to totally give up all coverage and cross my fingers that nothing happens. I want to have some type of coverage so that I am protected. What options should I be considering? Is COBRA a good choice?

Thanks

Dear No Longer A Child

Losing your dependent status can be a tricky time and it is hard to know what type of plan to sign up for. The good thing is that you are one step ahead of the pack since you are already thinking about your health insurance and know how important it is to keep some sort of plan in place. Based on what you shared, here are some potential options for you ranging from least expensive to most expensive.

  • Catastrophic or High Deductible Insurance: This is going to be the least expensive option when it comes to health insurance but will also provide the least amount of coverage. A catastrophic plan and high deductible plan are similar and basically will only cover emergency medical needs. For any other medical need you will need to pay out of pocket for the treatment. However it does ensure you are safe in case of anything serious and can be very affordable, starting at around $40 monthly.
  • Private Individual Insurance Plan: The next option if you want more comprehensive coverage will be a private individual policy. These plans more closely resemble regular employer sponsored plans and can be very affordable for someone who is young and healthy. In fact they start at around $100 monthly and can include pretty comprehensive coverage.
  • COBRA Insurance: Finally the last option, but definitely most expensive, is COBRA. With COBRA you would be able to continue to use the same health insurance plan you have with your parents for up to 36 months. The catch is that you must pay the entire premium plus 2% to keep the plan. On average this runs about $400 or more monthly. To find out exactly how much COBRA would cost for you, it is necessary to contact the plan administrator and tell them you are interested in signing up for COBRA and need to know the costs. Likely this will trigger them to send you an enrollment letter which will state the exact cost of the plan.

Federal Employeees and COBRA

Posted on: November 5th, 2012 by Cobra Insurance Guide

Nurse and Patient

When the COBRA laws were passed in 1986, federal employees were exempt from being able to continue their health insurance after job loss with COBRA. However this did not mean that federal employees who used the Federal Employees Benefit Health plan (FEHB) had no way to continue their coverage. In fact, the government created it’s own COBRA like policy – the Temporary Continuation of Coverage, within the FEHB to protect employees in a similar way.

What is the FEHB Continuation Plan?

The portion of the Federal Employee Health Benefit plan that provides continuation is known as Temporary Continuation of Coverage(TCC). Under this plan qualifying employees can enroll in TCC after job loss and they can also extend coverage to their spouses and children. Also similar to COBRA in order to maintain this coverage, employees must pay the full premium plus a 2% admin cost. Additionally this coverage lasts for 18 months for the employee and up to 36 months, or 3 years, for the spouse and children depending on the qualifying event.

Signing up for Temporary Continuation of Coverage

Similar to COBRA there are strict rules and guidelines for signing up for TCC. You have just 60 days to apply for TCC and failure to complete the application form within this window means you are ineligible for coverage. In addition, once you sign up for TCC the benefits are retroactive back to the day you lose coverage. You can get the forms for signing up for TCC through the Human Records department of the federal office you work in.

What is a qualifying event for TCC?

There are multiple qualifying events for TCC that closely resemble the qualifying events of COBRA regulation. For employees the only qualifying event is separation from federal service without the presence of gross misconduct. The agency you worked for is responsible for determining whether or not something is actually gross misconduct.

For children there are additional qualifications for TCC including:

  • Turning 26 years old
  • Loss of status as a natural child, foster child, or stepchild
  • Death of the employee in qualifying instances

Additionally for spouses there are other conditions that can trigger TCC coverage including:

  • Divorce
  • Annulment
  • Death of the covered employee

Keeping an Ex-Spouse on Your Health Insurnace

Posted on: November 2nd, 2012 by Cobra Insurance Guide

COBRA and divorce

Recently there has been a lot of press here in California about the intricacies of the laws and policies around divorce and health insurance. It all started when the ex-spouse of a city employee in Belmont decided to sue the town for not informing him he had the option to stay on his ex-wife’s health insurance plan. Instead this man signed up for COBRA insurance and ended up paying $524 a month for his coverage, which cost him over $18,000 in the long run. He is hoping to recuperate the difference in cost between the two plans and likely will win. Someone won a similar case just two years ago.

So what does that mean for you? Well it depends on the policy that your ex-spouse has. The first thing to do – ASK. Call the health insurance company or Human Assets department of your ex-spouse’s company and ask if there is an option in the insurance policy to cover spouses after divorce. This isn’t common, but some companies do offer such plans. And if the company does offer it, immediately find out how much it costs. Some companies will continue to subsidize the cost, but some will not. If they will not then you will pay basically the same as you would for COBRA and perhaps more than for a private plan.

Another rising trend among people getting divorced but concerned about health insurance is actually to stay married or only legally separate depending on the state they live in. For people with expensive medical needs or preexisting conditions, health insurance can be a major concern during divorce. So more and more people are staying married in amicable separations so that one spouse can continue to receive the medical care they need. While this normally begins as a temporary situation, many couples report that they continue like this for years to avoid astronomical medical and insurance bills, as well as maintain the exact same level of care and treatment.

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