Health Insurance Articles
How To Avoid A Health Insurance Coverage Lapse When Leaving Your Job
2010-03-31
Health care is a pervasive topic in the media and the workplace, as many changes are happening, and finding and maintaining good health care coverage can be a weighty task. Oftentimes, the stress of health care coverage can be exacerbated when you're in between jobs and you want to avoid a lapse in insurance coverage. There are a few legislative acts and precautionary steps you can take to circumvent a health insurance hiccup.
A lapse in insurance coverage can occur when you are switching from one job to the next or you are job hunting and currently unemployed. When you experience a lapse in health care coverage, you may be in danger of a pre-existing condition. A pre-existing condition is when a health insurance company refuses to cover a medical condition that existed before you signed up for your current policy. Under the Health Insurance Portability and Accountability Act (HIPAA), enacted in 1996, previously insured members that have not experienced a significant lapse in coverage are protected from insurance company denials due to pre-existing conditions. However, the "grace period" protection under HIPAA is approximately two months, which isn't a lot of time, so it's best to find coverage immediately. One option is when an employee leaves an employer, they are offered COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) coverage, which is the option for an employee to be offered continuous coverage once they are leaving their current employer. The downside of COBRA is that it's very expensive. But if it saves you from a lapse in coverage and you are able to avoid the pre-existing condition stipulation, it may be worth the money. If you decide you don't want to continue your current health care coverage through COBRA, you can take out a private plan until you're able to sign up for an employer-sponsored health care plan. High-deductible plans and flexible spending accounts (FSAs) are both good short-term options, as the premiums on these plans are usually lower.
However, health care in the United States is about to undergo a reformation with the recent passing of the Patient Protection and Affordable Healthcare Act. Under the new act, health insurance companies will not be able to deny coverage due to pre-existing conditions; but this will not take effect until 2014. There will be options available before 2014, such as purchasing insurance through a state-run "high-risk pool."
As the health insurance industry evolves and reformation becomes apparent in the horizon, it is advisable to start looking for health care coverage early so you can prepare properly and avoid a health care coverage lapse. Know your rights through HIPAA and familiarize yourself with available options such as COBRA and a private policy.
