IntroductionIf becoming unemployed isn’t bad enough, you also just lost your employer sponsored health insurance. While nothing I can suggest will make this bad situation into happy times, ideas for coping with the resulting health insurance problem can help. The choice of health insurance needs to be made quickly to retain your important health insurance protection. Are you going to bite the high cost of COBRA or strike out on your own health insurance plan? Not enough money for COBRA? What are there other choices?To COBRA or Not to COBRAIf you were employed by a company that was large enough to be COBRA qualified, then you can keep your current health insurance but it will be a painfully high price. Your recent employer is required by this Federal Law to send you notice of eligibility. You have 63 days to either choose COBRA or not and then it’s off the table. You can then keep a COBRA health insurance plan for up to 18 months.The hard part of COBRA is that the cost can be out of reach particularly since your paycheck just got eliminated. If you have substantial ongoing medical costs or pre-existing conditions, this will provide an essential bridge to your future group coverage and is the only safe route to go. A COBRA health insurance plan is “HIPAA” qualified and will not exclude your pre-existing health conditions. Also, when you are hired and can join a new employer based group plan, the HIPAA rule will apply and your new group plan will count your time on a COBRA plan as “Creditable Coverage.”Note: COBRA coverage is dependent on the prior employer’s group plan. If the company is out-of-business or ends their group health benefit, you will lose your COBRA benefit.State ContinuationTexas and some other states have a mandated health benefit continuation. This can help if your employer is too small for COBRA (less than 20 employees). Generally it is a much shorter benefit period (Texas is 6 month) but it is worth asking about if no COBRA health insurance benefit is available. Like the COBRA option, paying the whole price is the downside.Short Term “Gap” Health InsuranceInexpensive “Gap” plans are designed for short time periods and need protection for an unexpected acute illness or injury. These plans can work great if you are “between jobs” and are just waiting for eligibility with your new employer’s group health plan. Generally, short term policies are offered for up to a six month contract period.They are not a safe choice for anyone with significant pre-existing medical conditions since prior medical conditions will be excluded on Short Term plans. Also, Short Term plans are not considered “Credible Coverage” under the HIPAA rule and your future employer group plan can apply pre-existing condition exclusion if your gap between group plans is 63 days or more. Third, while Short Term plans have simplified health screening, you still have to have good health to qualify. A fourth concern is the potential risk of a new illness or injury occurring that can require treatment beyond the very limited contract time period. Individual / Family Health InsuranceIf you and your dependents can qualify on the initial health screening and can afford the price (High but often much less than COBRA), your own Major Medical Insurance Policy is a good option. The High Deductible plans that are also Health Saving Account compliant can deliver good protection from the risk of a major illness or injury on a tough budget. Unlike Short Term “Gap” plans; a Major Medical plan (including the High Deductible versions) has real staying power and substantial benefits.Many employers, particularly smaller companies, don’t offer a group medical insurance benefit. Having your own health insurance can open your job hunt to these positions without employer benefits. Having your own medical benefits also can help open the door to being self-employed.SummaryFirst, good luck on your job hunt. While you are looking for new work, don’t risk being without the financial protection of health insurance. COBRA can be painfully expensive but may be necessary if you have ongoing healthcare needs. An inexpensive Short-Term “Gap” insurance plan can be a good fit for some situations. Getting you own Major Medical Insurance policy is a third option that can also broaden your employment prospects.
How are insurance regulations different in NJ than other states?Actually some regulations make it a little easier to find a policy here than in some other states. In Texas, for instance, private insurers are allowed to individually underwrite applicants. They can rate up and deny coverage based upon prior and current health status. But in New Jersey, private insurers are not allowed to deny coverage based upon health. This means that people with current health issues, even serious ones, can get a health plan today.All New Jersey insurers must offer 5 standard plans to all consumers, regardless of health history. This requirement is unique. Insurers are allowed to raise premiums based upon the age of the insured person, but even this is strictly regulated. Otherwise, ratings may be applied by gender and location. So in large part, New Jersey health insurance is community rated. If you are used to the insurance market in another state, this may be very different!Preexisting Condition Requirements in NJ – There is a 6-month look-back and a 12-month exclusionary period limit for preexisting conditions in New Jersey’s individual health insurance market. So the news is not all good. If you have a health condition now, or have gotten treatment in the last 6 months, you may have to wait 12 months until you can get treatment covered under private insurance. Previous coverage rules may help shorten this.This is all according to the National Association of Health Underwriters (NAHU) website. They keep a current listing of the state health insurance rules and regulations.Major medical plans without individual underwriting in NJ, does not always mean that health plans are cheaper. Insurers will provide many different levels of coverage, from basic medical plans to comprehensive ones. You will have to select coverage based upon your own needs and budget.Sometimes you can cut out certain benefits, that do not save you that much anyway, in order to lower monthly premiums. A doctor’s office visit copay plan may cost 25% more than a plan that does not include one. If your family rarely visits the doctor, you may save thousands of dollars a year by skipping this option.Most major medical plans offer discounted network fees anyway. Consider a doctor who normally charges $100 for an office visit. You may have a plan that lets you visit the doctor for $40 each time. That seems like a big savings.But it is very common for network medical providers to offer discounts to insured people. These discounts often range from forty to sixty percent. So that $100 bill may have only been $60 with a 40% discount! Now you are only saving $20 a visit. If you are paying an extra $100 a month for this benefit, it may not really be saving you any money at all.What if you Cannot Afford New Jersey Health Insurance?There are some active plans to help people afford their premiums. Medicaid provides coverage to very low income people. The state children’s health insurance plan helps families with moderate incomes. The children’s health insurance plan in New Jersey also provides coverage for pregnant mothers.Beyond those state and federal health plans, many counties have a sliding scale health plan for lower income people.Find the Right NJ Health Insurance For You! Online health insurance quote forms make it easy for consumers to compare plans. Online quotes and qualified local agents are a few clicks away!
The greatest benefit of working in just about any professional position is health insurance. Depending on the type of coverage your employer provides, this benefit can account for a quarter or more of your total compensation package when you consider your job’s pay, vacation and other benefits. This makes health insurance second only to salary when considering the overall value of the work you output. That’s why when job searchers are weighing different offers from similar employers, health benefits can make the difference whether or not they accept a position, and why health insurance is such a hot topic in nations such as the U.S. that have not adopted a government sponsored socialized medicine program like so many other nations have.There is another health insurance option for Americans, however. As more companies have found it necessary to shift the costs of health insurance to their employees to help with their bottom lines, more workers are finding that they can seek to opt out of their employer provided insurance and strike out on their own by buying private individual coverage instead. For years this was a difficult prospect for most people as it was far too expensive to make it worthwhile. In recent years, however, individual insurance providers are finding that more people want to use their services and have adjusted their rates to make this a far more affordable option.According to a Kaiser Family Foundation report, employer-sponsored health-care costs have risen between six and nine percent yearly over the last few years. Contrast that to what employers pay, on average, which equals about $3,785 a year for single-person coverage and $8,824 for family coverage. In turn, they pass 16% of that premium on average to their individual employees and 28% of it to families. Smaller employers, who cannot foot as much of the bill as large corporations, often charge their employees less for single coverage and more for family coverage. The situation is expected to get worse, as 40% of large employers say they are “very likely” to require more contributions from their employees for health care in coming years.So is it worth your while to dump your company plan in favor of individual insurance coverage? The answer is: Not so fast. It’s incredibly important to get a clear value of your existing coverage from your employer or Human Resources department first along with a good estimate of how much is being deducted from your paycheck each week to cover these costs. With that information in hand, you can do some hunting for individual insurance with a realistic idea of how much money you can save (or lose) by dumping your work insurance.Here are some of the pros of making the switch to individual insurance:Keep more money in your pocket – It is possible for healthy families to find competitively priced insurance coverage on the open market. According to the website eHealthinsurance.com, the average individual insurance premium for a single person in California, for example, is just $139 a month, while family coverage costs $357 a month. In most cases, these individuals would pay several hundred dollars more per month through their employers.Pay for only what you need – With many employer provided plans you don’t have a lot of choices or options. On the private market you have more of an ability to choose the coverage you need and ignore the coverage you don’t. Paying for only what you need can save hundreds of dollars per month.Take your coverage with you – When you buy your own insurance you won’t be subject to the volatility of changing jobs or layoffs. If you change jobs often, you have to take the gamble that comes with gaps in your coverage either. There are no coverage gaps if you buy your own insurance. You also won’t feel like you have to stay at a dead end job just to keep your good health benefits.There are some definite negatives you should be aware of as well:Less coverage – Dollar for dollar, employer plans provide more coverage than individual plans. On the individual market you may pay less, but you’ll usually get less. Employer subsidies definitely work in your favor in a lot of cases.Stricter rules – You could be out of luck with private insurance if you have a pre-existing condition. Employer plans must insure everyone in their plan, but individual plans can reject you for many different reasons.Rates can increase – Premiums for individual insurance can rise with age, so you may be saving money by buying an individual plan now, but farther down the road you may wish that you stayed with your company provided insurance.After heeding all of this advice, if you do decide to forgo your employer’s health insurance plan, be sure that you have secured an individual policy first. The worst thing you can do is lose your coverage and have to wait until your company’s next enrollment period to get back in. Be smart and do your homework. Crunch the numbers and make sure that individual insurance is right for you. If done right, you could save a lot of money.