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What To Do If Your Health Insurance Coverage Lapses


Maintaining health insurance coverage is important to protect you and your family. Allowing a lapse in coverage may be unavoidable due to termination, lay off, or if your employer discontinues group coverage. There are a few options depending on the state you live in and how long it has been since the health insurance lapse. Usually, if it has been less than two months since your policy was active you may be able to reinstate coverage on an individual policy, continue coverage if you are eligible for the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) through an employer, or obtain a short-term health insurance policy. Beyond a two month grace period, the only option is to obtain another health insurance policy. Keep in mind that waiting this long may have adverse effects on your coverage status and premium.

Policy Reinstatement or COBRA

If reinstating health insurance coverage on an individual policy soon after it lapses it is imperative you contact your insurance carrier as soon as possible. Typically, you required to pay the premium so that coverage is current. Any changes needed to update the policy should be done at that time. This reduces the chances of encountering coverage issues if you, or a covered family member, needs to seek medical attention.

After an employment separation, you may be eligible for COBRA. The COBRA law protects your health insurance rights by requiring employers to offer the chance to extend group coverage benefits for 18 to 36 months through COBRA. Whether you are terminated or quit working for your employer, the company is required by law to extend the chance for you to receive short-term benefits through COBRA. If this does not happen, you may want to ask human resources for information regarding COBRA at the time of separation.

Short-term Coverage

Short-term health policies typically provide limited benefits, and are available through private insurance carriers. This type of policy is designed to provide coverage for up to six month during transitional periods. This helps to avoid the high cost of health care expenses including emergency medical care. A health insurance lapse past the grace period will probably require buying a new health insurance policy. Before deciding on a new insurance carrier, compare quotes. If you have pre-existing health conditions, be sure to ask what is not covered under the policy. Many individuals find a short-term health insurance policy a good option when considering COBRA.

The choices available will help you to avoid a lapse in health insurance coverage. In addition, keep in mind a proactive approach informs you of what option may work best for you. Consult a licensed professional in the state you live in for details.

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