Health Insurance Resources for the Unemployed

The average number of workers filing new claims for state unemployment benefits rose to the highest level in almost a decade, according to an October 12 article in the Washington Post.

For employees who have been laid off, there are several options to retain health insurance coverage while looking for a new job. The major options include continuing a prior employer's health coverage, obtaining coverage under a spouse's health plan, applying for coverage in the individual health insurance market, or obtaining coverage through a state health insurance program.

Continuing coverage through your former employer

Under a federal law called COBRA (the Consolidated Omnibus Budget Reconciliation Act), employees who resign or are fired for any reason other than "gross misconduct," generally can continue their health insurance - as an individual or for family coverage - for up to 18 months. Under certain circumstances, COBRA continuation coverage can be extended for up to 36 months. Individuals generally must elect COBRA within 60 days of leaving the company.

The federal COBRA law only applies to companies with at least 20 employees. However, some states have passed laws that apply to smaller companies. Individuals can check with their state insurance departments to determine eligibility. Those who elect COBRA continuation coverage may be required to pay the total premium plus a 2 percent administrative fee.

Information on electing COBRA coverage can be obtained through your prior employer. For more detailed information on rights under COBRA, see the following publication from the U.S. Department of Labor:

http://www.dol.gov/dol/pwba/public/p...RA/cobra99.pdf.

Obtaining coverage through a spouse's plan

Married individuals who have recently lost a job may be eligible for coverage through their spouse's employer. If that employer offers a group health plan, individuals can request "special enrollment" to pick up coverage. A spouse has 30 days to request special enrollment.

Apply for an individual policy

Workers who have been laid off may be able to purchase coverage that is more affordable than COBRA continuation coverage in the individual health insurance market. The premiums and eligibility rules for individual health insurance vary across states and companies. Information on health insurance policies available in your area can be obtained from health insurance companies, insurance agents, or state insurance departments.

Rights Guaranteed through HIPAA

The Health Insurance Portability and Accountability Act (HIPAA) guarantees certain rights for people who have lost their jobs. This law, passed by Congress in 1996, assures that certain individuals can obtain health insurance coverage without exclusion of preexisting conditions (an illness or disability that might restrict coverage). States have adopted different mechanisms for assuring access for HIPAA eligible individuals.

But there also are conditions under HIPAA that must be satisfied. For example, to be "HIPAA-eligible," one must have had group health coverage through a former employer without a "significant break in coverage" (more than 63 days).

Individuals must also have exhausted COBRA continuation coverage, if available. To help determine HIPAA eligibility, visit this online resource http://www.hcfa.gov/medicaid//hipaa/online/260001.asp from The Health Care

Financing Administration.

Employees who have been laid off may also check with their former employer and state insurance department (many have 800-numbers set up to answer consumer questions) to determine what's available and which solution is most suitable.

State Health Insurance Programs

Some displaced workers may be able to obtain coverage for themselves or family members from state programs, including Medicaid, the State Children's Health Insurance Program (S-CHIP) or specific programs for displaced workers.

Participation in programs such as Medicaid or S-CHIP is often limited to lower-income individuals and other limitations on eligibility may apply. Information on eligibility for Medicaid is available from your state http://www.insurekidsnow.gov/.

Other options

Other options include buying a short-term health insurance policy (12 months) or converting a group plan to an individual policy (using a conversion policy). To determine which option is best for you, check with local health plans, health insurance agents, or your state insurance department.
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