What is the solution if you're not Cobra eligible?

[BarbaraAnne]

I am retired, but DH works for a small company with less than 20 employees so we are not COBRA eligible, as I understand it.

Our plan upon retirement in a couple of years was group health insurance from IEEE, but that is no longer an option as IEEE group health is no longer accepting new applicants. We would also apply for individual policies.

My concern is as to what happens if DH's company decided to shut down (which we don't expect, but never can be sure of). If we are not COBRA eligible would we need to find individual insurance within 60 days if he was suddenly unemployed? Should we be looking for new insurance now and make the transition before retirement, just in case? Are we in a risky situation? It's kind of scary not to have that COBRA safety net...

I would appreciate any advice...

 

[REWahoo]

I suggest you go to the Georgetown University website, download your state's consumer guide and determine what your rights are.

http://www.healthinsuranceinfo.net/

 

[Martha]

Some states have mini-COBRAs to cover the people who are not covered under federal law. The guide Wahoo points to should tell you that. The 60 day rule you mention is a COBRA rule so that isn't relevant to you. However, be sure to read the information concerning HIPAA. HIPAA gives you some rights when leaving a group plan, even if COBRA isn't available. However, to exercise those rights you generally must get on the new plan within 63 days. HIPAA rights are important if you are worried you might be unisurable.

 

[BarbaraAnne]

Thanks Martha and REWahoo for your advice and links.

I was not aware of the mini-COBRA provision or how HIPAA would work in our situation. Although we think we are insurable now, one never really knows. One of the many problems with the current system is that many people are potentially one blood test, mammogram, etc. from being uninsurable. I don't know if many folks realize this and frankly it worries me every time a family member visits the doctor.

 

[Rich_by_the_Bay]

One of the many problems with the current system is that many people are potentially one blood test, mammogram, etc. from being uninsurable. I don't know if many folks realize this and frankly it worries me every time a family member visits the doctor.

I never heard it put that way, but that is exactly the way it can work.

It's sadly ironic that the very hazard you are insuring against can deprive you of the very protection you need from your insurance.

 

[ziggy29]

Our plan upon retirement in a couple of years was group health insurance from IEEE, but that is no longer an option as IEEE group health is no longer accepting new applicants. We would also apply for individual policies.

Pardon me for resurrecting this one.

There's a good chance that if you were eligible for IEEE coverage once upon a time, you're probably eligible to join the ACM (Association for Computing Machinery). They still have association-sponsored health insurance plans; whether or not it's a true "group" plan, I'm not certain.

(I'm actually a member of this association who's considering this as a fallback should I sever employment, so I'd be curious to hear from anyone who might be in the plan.)

ACM's Insurance Programs

 

[cute fuzzy bunny]

I'm starting to think that it might be a good idea for some people to procure an inexpensive high deductible plan early in life before anything can "go wrong" and maintain that until medicare kicks in.

That way you'd always have a fallback plan for between jobs, early retirement, etc.

Based on what i've looked at recently, you could probably pay 30-40 years worth of low cost, high deductible insurance for not a lot more than the cost of 18 months of Cobra when you're in your 40's or 50's. The rates are so dang cheap when you're in your 20's or 30's...

Might turn out to be the best investment you could ever make.

 

[ziggy29]

I'm starting to think that it might be a good idea for some people to procure an inexpensive high deductible plan early in life before anything can "go wrong" and maintain that until medicare kicks in.

That way you'd always have a fallback plan for between jobs, early retirement, etc.

I've thought about that. I just can't get myself to pay $200+ per month for something I won't use (at least while at Megacorp). I guess one way to look at it would be to call it "health insurance insurance."

If the system were overhauled so that Megacorp gave me the money they spend on health insurance and had us shop for our own policy, I'd be all over it. For what they spend on health insurance for us (even without my contributions), I could get a decent HSA-eligible HDHP for about $300 a month plus about $4000 a year left over to fund the HSA.

 

[cute fuzzy bunny]

What i'm going to be paying in cobra amounts to about $70 a month for 30 years...and should things go badly in the re-employment-with-benefits category, I cant wait to see what sort of Hipaa policies we're offered and how much THOSE are gonna cost...and how lousy the coverage will be

 

[FIRE'd@51]

I'm starting to think that it might be a good idea for some people to procure an inexpensive high deductible plan early in life before anything can "go wrong" and maintain that until medicare kicks in.

That way you'd always have a fallback plan for between jobs, early retirement, etc.

Based on what i've looked at recently, you could probably pay 30-40 years worth of low cost, high deductible insurance for not a lot more than the cost of 18 months of Cobra when you're in your 40's or 50's. The rates are so dang cheap when you're in your 20's or 30's...

Might turn out to be the best investment you could ever make.

Yeah, until you develop a pre-existing condition and can't move because your policy doesn't cover you in your new state. Or until your carrier exits the business and cancels your policy. Or over the years, adverse selection leaves you in a risk group where your premiums escalate way more than average, or health care inflation makes your policy's lifetime cap inadequate, and you can't switch to another policy because of a pre-existing condition.

If we could fix the system, so the "quirks" I mentioned above couldn't happen, I would agree with you. We need to move in the direction of tying insurance to the individual and making it completely portable, and away from employer-provided Cadillac plans. We need a system with everyone in it, where people don't lose their insurance when they lose or switch jobs, or move.

 

[FIRE'd@51]

What i'm going to be paying in cobra amounts to about $70 a month for 30 years...and should things go badly in the re-employment-with-benefits category, I cant wait to see what sort of Hipaa policies we're offered and how much THOSE are gonna cost...and how lousy the coverage will be

Fortunately, when I FIRE'd I was able to switch to a higher-deductible policy under COBRA (my employer had several plans - this was before HSA's). While I was working I took the Cadillac plan since my part of the premium was tax-subsidized (pre-tax) and the employer paid the rest. It saved me a bundle over the 18 months I was on COBRA. Have you checked if your wife can do this, or is her plan a "one shoe fits all"?

Just to clarify, HIPAA is not a policy - it is Federal legislation which is implemented somewhat differently in each state. In my state, a HIPAA-eligible individual can buy any policy offered by any insurance company in the state as guaranteed-issue with no waiting periods for pre-existing conditions. The catch is that the insurance company can charge a much higher premium for the policy. While the HIPAA laws are better than nothing (at least you can get insurance), you pay through the nose for it. Sometimes, a state risk pool or some fallback guaranteed-issue policy will actually be cheaper.

 

[perinova]

Pardon me for resurrecting this one.

There's a good chance that if you were eligible for IEEE coverage once upon a time, you're probably eligible to join the ACM (Association for Computing Machinery). They still have association-sponsored health insurance plans; whether or not it's a true "group" plan, I'm not certain.

(I'm actually a member of this association who's considering this as a fallback should I sever employment, so I'd be curious to hear from anyone who might be in the plan.)

ACM's Insurance Programs

What does anyone think about the Catastrophic Major Medical. It seems to be inexpensive and cover after a deductible of $25,000. I am thinking that this is a reasonable option for a family with no current illness.
I am not sure if you can be covered with no other insurance at all?
Any catch?

 

[ziggy29]

What does anyone think about the Catastrophic Major Medical. It seems to be inexpensive and cover after a deductible of $25,000. I am thinking that this is a reasonable option for a family with no current illness.
I am not sure if you can be covered with no other insurance at all?
Any catch?

You need another policy. This is not designed to be stand-alone insurance; it's supposed to sit on top of another insurance plan when it has reached its payout limits (much like umbrella liability sits on top of an existing homeowners' liability policy).

I believe the main purpose of this insurance is to kick in when you reach the "plan maximum" (usually $1-5 million) in your primary health insurance policy, or to pay out if you incur more expenses than a plan will pay out in any given year.

 

[perinova]

You need another policy. This is not designed to be stand-alone insurance; it's supposed to sit on top of another insurance plan when it has reached its payout limits (much like umbrella liability sits on top of an existing homeowners' liability policy).

I believe the main purpose of this insurance is to kick in when you reach the "plan maximum" (usually $1-5 million) in your primary health insurance policy, or to pay out if you incur more expenses than a plan will pay out in any given year.

Are you sure? A $1-million deductible would be a stop loss insurance. The insurance I found in the link I followed above is at $25k deductible insurance. I didn't actually read (did I miss it?) that you need a 2nd insurance. I do know that some catastrophic insurance coverage require it.

 

[ziggy29]

Are you sure? A $1-million deductible would be a stop loss insurance. The insurance I found in the link I followed above is at $25k deductible insurance. I didn't actually read (did I miss it?) that you need a 2nd insurance. I do know that some catastrophic insurance coverage require it.

Yep. Look at this about plan details: http://www.personal-plans.com/pdfdocs/epsmoore_acm-15505-catastrophemajormedical.pdf

Where it says "Required Basic Plan", you'll see that another health plan sitting under it is required.

 

[mickeyd]

Hey BarbaraAnne,

The 20 employee bottom limit is definitely a COBRA requirement however, nothing limits an employer from extending "COBRAlike" benefits to a long-time employee. Perhaps your DH could approach the boss and work out some kind of a one time deal for him. What's the worst that can happen?