By Tony Novak

Article:
A key decision that millions of Americans face each year is
whether to elect "COBRA" “HIPAA” or “COBRA alternative” health
care continuation coverage when they lose employer-provided
health coverage. About two thirds of all Americans are covered
by employer-provided health coverage but with the recent
increase in layoffs across the country, the number of workers
losing these employer-provided health benefits is at a record
level. Workers typically have three or more options available
and the cost can vary dramatically between the various choices
available. Some may opt to take no health insurance coverage and
bear the financial risk themselves. In order to make the best
decision, they need to know about two laws, COBRA and HIPAA.

COBRA Employers who have over 20 employees and offer group
health coverage are required to offer continued coverage to
their workers, former workers or dependents who lose eligibility
for the group health plan. This benefit does not apply if the
health plan withdrawals coverage or if the employer terminates
the group health plan before the worker is enrolled under the
COBRA benefit. When workers lose health insurance coverage,
COBRA is usually not the best solution unless the employee or a
dependent is in the middle of a course of medical treatment
because this is the most expensive health coverage option. But
in some cases, for example, if a worker has serious medical
conditions or the worker’s spouse is pregnant, COBRA coverage
may be desirable.

HIPAA Most group health plans offer members the right to convert
to a variety of individual plans while preserving continuation
of coverage benefit. In many cases you may also change to
another insurance plan in your local market by providing
evidence that you were covered by a prior health plan. For
“preferred risk” applicants, changing insurance plans can result
in significant savings, but this will generally will not be an
appealing option for those with significant pre-existing
conditions.

COBRA ALTERNATIVES For the majority of healthy workers who just
want to be protected from unforeseen medical expense until they
land another job, short term medical coverage is the best
answer. This coverage is issued online within minutes, covers
all ordinary any necessary medical treatment from any medical
provider in the United States and requires no referrals. The
cost of this coverage is less than 1/2 of the price of COBRA
plans. The two downsides are that this coverage does not cover
pre-existing conditions and you must re-enroll after 6 months.

ELECTING NO COVERAGE Individuals in some states may wisely elect
to keep no health coverage while unemployed with the knowledge
that they can join a health plan at any time, even after they
are receiving medical treatments, and have all of their medical
expenses for pre-existing medical conditions covered by the new
plan. Three of these states are New Jersey, New York and
Vermont. The negative is that this type of health coverage, if
needed, is ridiculously expensive. Some plans in these states
run more than $2000 per month for family coverage.

RESOURCES IRS Notice 98-12 provides this information in the form
of questions and answers. The IRS publication on this subject
can be found at
ftp://ftp.irs.ustreas.gov/pub/irs-drop/n-98-12.pdf

Www.MedSave.com offers online enrollment for short term medical
insurance nationwide and professional enrollment support by
telephone at (877)-529-7435.

About the author:
Tony Novak, MBA, MT is a writer and financial adviser in
Narberth PA. His businesses MedSave.com and Freedom Benefits
Association provide online benefits enrollment and financial
advise to businesses in 47 states.