You've lost your job, now what can you do to maintain your health insurance?
If you were formally enrolled in your employer's group health plan, a federal law known as the Consolidated Omnibus Budget Reconciliation Act (COBRA) may give you the right to continue in the group coverage on a temporary basis after departure from your employer. Generally, you would be required to pay the full group premium, including any part your employer had been paying, plus 2% for administrative expenses.
The American Recovery and Reinvestment Act of 2009, however, expanded eligibility for COBRA and now offers a reduced premium to certain qualified individuals who lost their job on or after September 1, 2008 through December 31, 2009. Under this Act, you may be eligible for a 65% reduction in COBRA premiums as early as March 1, 2009. You are responsible for paying the remaining 35% of the premium.
COBRA does not apply if your employer terminates the group health plan it offers. Also, if your employer goes out of business and cancels the plan or fails to pay the premium, the coverage stops and COBRA does not apply. COBRA only applies when the group policy remains in force. This applies if your employer changes group plans, but not if the plan is completely terminated.
COBRA applies to all employers of 20 or more workers. This includes self-insured employers, but does not apply to plans sponsored by the federal government or certain church-related organizations as defined by federal law. Spouses and dependent children covered under the group health plan also may be eligible for COBRA coverage.
You will still have to pay any coinsurance, deductibles, and co-payments required by your health plan, and lifetime limits on costs or benefits may apply.
What other options do you have if you have lost your job and your health coverage?
If you have coverage through an employer's group health plan and then lose the coverage as a result of job termination or expiration of COBRA coverage, you may be eligible for Pennsylvania conversion coverage. This is an individual policy from the company that provided your employer's group insurance plan. Employer group health plans are not required to offer you this individual conversion coverage under certain circumstances. To qualify, you must have been covered under your prior group health plan for at least three months. In addition, when you apply, you cannot be covered under or be eligible for similar benefits through a group health plan or Medicare. You will be notified of your conversion rights and must apply within 31 days of the notification.
Spouses and dependent children covered under the group health plan also may be eligible to purchase a conversion policy.
UPMC Health Plan offers an HMO and a PPO Conversion Policy. The policies include coverage for such things as hospital and surgical/medical services, routine physical examinations, women's care, diagnostic services, rehabilitation therapy services, and behavioral health and substance dependency services. Prescription coverage is not available under the Conversion Policies. You will still have to pay any coinsurance, deductibles, and co-payments required by your health plan, and lifetime limits on costs or benefits may apply.
Are there other coverage options?
If you've lost coverage through an employer's group health plan and wish to purchase an individual plan, you may be eligible for a HIPAA conversion policy. You will need a "certificate of creditable coverage" from your last insurer indicating a 12-month period of prior coverage when you apply. If your employer is required to offer COBRA coverage, you must exhaust COBRA coverage before you can be considered for a HIPAA conversion policy. You have 63 days from the ending date of your employer group health plan to apply. In Pennsylvania, only Blue Cross/Blue Shield companies sell HIPAA conversion policies.
Finally, various Blue Cross/Blue Shield plans also serve as the carriers of last resort and offer a medical-only product to all consumers on a guaranteed-issue basis.