REview your Insurance Options

If you’re unemployed or you face a layoff soon, the thought of losing your health insurance can be frightening. It also can be expensive—and it’s another thing to pay for just as your income is being cut.

There are options to retain health coverage, however. While you may be tempted to go without insurance now because of the cost, paying for an illness or accident without insurance can cost tens of thousands of dollars. It’s better to pay for insurance—even if it’s more than you paid while employed—than it is to risk having no coverage.

Basic COBRA Options

If your employer has more than 20 employees and you are covered by the employer’s health plan, the company is required to offer you COBRA (named after the Consolidated Omnibus Budget Reconciliation Act of 1985) insurance for 18 to 36 months.

COBRA insurance allows you to continue the same health insurance you had as an employee, and any costs you have incurred in the calendar year are applied to your deductible, so you don’t need to start over.

COBRA is helpful in that it can provide continued medical coverage, but there are some things you need to know. Before you accept COBRA, research the cost and coverage alternatives. While it certainly is better than going without health insurance, be aware that COBRA is expensive. Your monthly premium can be twice the amount you paid while you were employed.

For example, if you paid $300 a month for individual coverage before you were laid off, your employer picked up the other half. Now, you are covering the full cost, including what your employer used to pay, so your coverage could cost you up to $600 a month.

Insurance Cost Considerations

• Check if a working spouse can add you to an existing health care plan.
• Have your spouse check with his or her employer about adding you to that company’s policy. Even if it is not the normal “open enrollment” period, a job loss is a qualifying life event that allows you to add or change coverage quickly.
• Find out if there is an additional cost for your spouse to add you to the plan.
• Compare that additional cost with the cost of your own COBRA coverage.
• Also consider the benefits, co-pay amounts, and deductibles on your spouse’s plan. Even though the premium might be lower, you may pay more on his or her plan.

Insurance Coverage Alternatives

If you are healthy, consider downgrading your benefits to keep your premium manageable. Also, explore health plan alternatives:

• States with competitive health insurance markets frequently have less-expensive options available.
• For example, in some states, Blue Cross, Blue Shield offers inexpensive individual and family plans.
• The Web site www.ehealthinsurance.com has a tool to help families calculate COBRA health insurance costs versus other programs.