There are two laws that may protect your rights to continued health insurance coverage: COBRA and HIPAA.
The 1985 Consolidated Omnibus Budget Reconciliation Act (COBRA), may give you the opportunity to continue your health insurance benefits for a limited time, typically 18 months for those who qualify.
If your company employs more than 20 people, it is required to give you information about your COBRA rights after your termination. Typically, you have 60 days to accept coverage (if you don't, you lose your right to coverage). Election is not automatic. You have to sign up for it. Payment is required within 45 days after election. You will pay the full premium, but at a group rate. You may also need to pay a 2 percent administration fee. In most cases, it's still cheaper than buying an individual policy on the open market.
You spouse and dependent children may also be entitled to continued COBRA benefits due to circumstances, such as: the case of your death, if you are currently covered, or if you qualify for Medicare (in which case you have to stop your COBRA benefits). The Department of Labor site offers more details at www.dol.gov .
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There are 4 exceptions to COBRA:
- If your company files for bankruptcy and its health plan is terminated, you can't get continuation of those benefits because they no longer exist.
- If you were fired for gross misconduct, you may not be eligible for COBRA benefits.
- If you work for the federal government or church-related organizations, you do not qualify.
- If your company has less than 20 employees, you don't qualify (but you may qualify for other continue coverage per state law).
In addition to COBRA, the 1996 Health Insurance Portability and Accountability Act (HIPAA) provides new rights to group and individual plan members.
- HIPAA can limit exclusions of pre-existing conditions to 12 months. This waiting period must be reduced by the amount of time you have "credible coverage," such as a group health plan, COBRA, HMO, Medicaid or Medicare, etc. Typically you can receive credit for coverage in place for 63 consecutive days, or more.
- HIPAA also prohibits discrimination based on health status; and special enrollment opportunities to group health plans under certain circumstances. For more information, see www.dol.gov .
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