Your First Job
Starting your very first job? Consider enrolling in your employer's health care plan. If your employer offers more than one option-an HMO plan, a preferred provider option, and a fee-for-service plan, for example-compare each to your needs and preferences before making a decision. Ask for a copy of the summary plan description (SPD) to get details about covered benefits. Ask what type of plan you have, how it works, and what eligibility requirements you may have to meet. Know whether you will be expected to pay a portion of your premium, how much it will be, and who to talk to if you have questions.
What if your health care coverage ends because you lose your job, have your hours reduced, or get laid off? Knowing your rights ahead of time can prevent these situations from meaning an end to health care coverage. Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), you, your spouse and dependent children, might be able to purchase extended health coverage for up to 18 months. In the case of individuals who qualify for Social Security disability benefits, special rules may allow for extending coverage an additional 11 months. Since your employer is not required to pay a portion of your premium, you may pay the entire amount, but the cost is usually less than if you obtained coverage on your own. Also, contact your state government to find out if you or your dependents are eligible for public health insurance, like Medicaid or the new State Childrens' Health Insurance Programs, or to get information on obtaining new coverage. Under the Health Insurance Portability and Accountability Act (HIPAA), you may also be eligible to enroll in your spouse's health plan under a special enrollment period.
Looking for a New Job?
Before switching, ask about the type of plan offered by the potential employer, and compare it to your current plan. Ask about the premium you'll pay under the new plan, whether you can continue with the same doctors, or whether you will have to see new ones. And know your rights under HIPAA, which protects you and your dependents by limiting pre-existing condition exclusion periods. COBRA may give you the opportunity to purchase temporary extended health care benefits offered by your former employer while you are looking for a new job, or during a waiting period for health benefits imposed by your new employer. Retirement
When you're thinking about retiring, be sure you understand the documents governing your health care plan. Review your SPD, and any documents you have received that would modify it. Also, request copies of any formal written documents that outline how your plan operates, and any other information on your employer's policies on retiree health care benefits. Realize that although some employers continue to provide health care benefits to their retired employees, private sector employers are not required to provide retiree health benefits. And remember, federal law does not prevent employers from cutting or reducing health benefits under plans available to participants and their families, unless there has been a specific promise to continue them that can be legally enforced. So before you retire, think about saving money to use for any coverage gaps that may occur before you are eligible for Medicare.
At a Glance
Generally HIPAA limits pre-existing condition exclusions to a maximum of 12 months (18 months for late enrollees). HIPAA also requires this maximum period to be reduced by the length of time you had prior "creditable coverage." You should receive a certificate documenting your prior creditable coverage from your old plan when coverage ends. HIPAA may also give you a right to purchase individual coverage if you have no group coverage available, and have exhausted COBRA or other continuation coverage.
If you are covered under your employer's health plan and you lose your job, have your hours reduced, or get laid off, and your employer's health plan continues to exist, you and your dependents may qualify to purchase temporary extended health coverage under COBRA at group rates under the employer's plan. Divorce, legal separation, loss of dependent child status, the covered employee's death or entitlement to Medicare, may also give your covered spouse and dependent children the right to elect continued coverage under COBRA. Your plan must be notified of these events. Generally, COBRA covers group health plans maintained by employers with 20 or more employees. The group health plan is required to provide you with a written notice indicating your eligibility for COBRA coverage. If you are eligible, you will have 60 days from the date the notice is sent or from the date your coverage ends-whichever is later-to elect COBRA. If the employer is too small to be subject to COBRA, state law may require the plan's insurer to provide some continuation coverage.