Loss of Group Coverage?
Options for Non-Cobra (<20) Group Employees:
An employee’s coverage stays in effect through the end of the month during which they are terminated. Example: Terminated or changed to part-time on April 5th, coverage stays in force through April 30th. After this point there are several options. If an employee is not terminated and not working, this is usually classified as a leave of absence. With most carriers employers can continue leave of absence status for up to three months.
When employment terminates, you often have the option to continue the coverage:
- COBRA: If you worked for an employer subject to COBRA (had 20 or more employees in the prior calendar year) you will have the option to continue the same coverage for up to 18 months. The price you pay is the same rate your employer pays plus 2%. You will get a COBRA offer letter within 14 days of termination. If you elect COBRA, payments are made directly to your employer.
- Coverage Continuation: If you worked for a smaller employer (not COBRA eligible) you will usually have access to keeping your coverage for up to three months. Unlike COBRA, employers are not always required to offer this, although most do. Like COBRA, if you decide to maintain coverage, you pay your employer the monthly premium.
Cost of COBRA or Coverage Continuation: People often believe COBRA is expensive and they can find less expensive options elsewhere. Remember, your cost is the same as what your employer is paying for a group plan. Those rates are typically based on the average age of the employees. Usually only employees in the 20's or 30's can find less expensive coverage. If older employees are willing to take a higher deductible and limited network plan, then they also may find less expensive alternatives. Employees who have medical needs or are over 40 usually choose to extend their employer's coverage. Also be aware, access to these options only exist if the group plan stays in force. If the employer ceases operations or cancels the group plan for any reason, COBRA or Coverage Continuation will end.
Other Options When You Lose Group Coverage:
Spousal Coverage: If you have a spouse with group coverage, your loss of group coverage creates an open enrollment window to join your spouse's group plan. Although likely expensive, if you have expected medical needs this may be a good choice.
Short-Term Plans: Employees also have the option of inexpensive short-term insurance plans. These do not cover pre-existing conditions, have limited benefits and have a maximum term of 90 days of coverage. Green Financial can assist with these. A big issue with these plans is that at the end of the term the employee would no longer be eligible for an individual plan as that window is only open for 60 days after group coverage ends. These are ideal if you are healthy and believe your needs are only very short-term in nature. Short-Term Plan Rates
Individual Exchange Plan: Ordinarily the state exchange for individual plans is only open for enrollment from 11/1 through 12/15 for January 1st effective dates, however, employees who have lost group coverage qualify for a special open enrollment window that's open for 60 days after the ending date of their group plan.
Many carriers offer coverage through The Washington Health Plan Finder, commonly referred to as the Exchange, however, these are usually much different from the group plan offerings. Deductibles are often higher and the provider networks are very limited. There may be a subsidy available to reduce the cost but this will be based on your 2020 total family income. If you take a subsidy and later gain employment, you may have to reimburse the government for the premium tax credit you received.
We recognized the complexity this represents and suggest that a person in need of individual coverage contact Green Financial for guidance. There is no extra cost for our assistance and we can enhance the enrollment process. We have posted a summary of rates and plans on our Rate Calculator
To set a phone appointment for help with enrollment in an individual or short-term plan, please choose an appointment time that works for you from our online scheduler: Schedule a Phone Appointment