Help! My Company's Going Out of Business, What Do I Do Now?

MEDICAL ISSUES

C.O.B.R.A.

Have you always wondered where the word C.O.B.R.A. comes from? The acronym stands for -  Consolidated Omnibus Reconciliation Act. The title itself doesn’t really state it’s purpose. This is the story.  The act was enacted so former employees would have a means of obtaining health insurance between jobs or enrollment periods of medical insurance. Under federal guidelines, after leaving your employer, you have forty five days to pay for COBRA insurance. According to the federal government, companies have the ability to charge employees 102% of the employer’s premium. Companies with more than twenty (20) employees must offer C.O.B.R.A. to anyone who had medical insurance with the employer. Mandated by law, a C.O.B.R.A. insurance application must be sent to the employee two weeks after a qualifying event of quitting or termination of employment.

As of 2009, President Obama signed new legislation.  Any employee who has been involuntarily terminated without cause from September 1, 2008 through February 16, 2009, is eligible for financial assistance with their COBRA.   Organizations still in business will be sending out notices that will state even if you haven’t opted for COBRA, you have the possiblity to get it at 35% of the employer cost. This legislation went into effect for anyone who fulfills the above critieria.  No one will be considered  as having a preexisting condition.  This is your do over. The COBRA at the 35% rate stays in effect till December 31, 2009.

MEDICAL INSURANCE

Guess What? If your employer is out of business, you cannot get COBRA insurance. Hmm, I thought everyone could get it! COBRA does not apply unless your employer has a medical insurance policy. Since, your employer is going out of business, there isn’t a need for your employer to carry medical insurance. Now, you’ll need to find your own medical insurance. This can be accomplished through your spouse, going on line to find medical insurance, or not carrying it all. With the loss of employment, the expense of health care is an expense that you may not be able to add to your daily living expenses.

As an employee who has lost their health insurance, your spouse is able to get insurance at their place of employment, immediately. Why? Because, this is a qualifying event. What is a qualifying event? It is a life changing event such as job loss, birth, divorce, death etc. You do not have to wait for an enrollment period. Pass, go!  Enroll. This is the way the law was set up.

If you find yourself in the position without immediate medical insurance after 60 days, any previous covered health conditions, procedures, or medications is considered a pre exisiting condition. Any procedures or medications won’t be covered for 1 year under your new insurance, if there is a lapse of medical coverage more than 60 days. Keep this fact in mind, especially, if you have lots of medications and ongoing procedures.

If you’ve had medical insurance while employed and now find yourself in the position without it and there isn’t an employed spouse to pay for your insurance, there are several methods. There are online or radio commercials that promote medical insurance. Esurance is a website that sells medical insurance. Being that I haven’t encountered anyone who has signed up for this insurance, I don’t feel it’s fair to offer an opinion on this subject. Lastly, you can purchase a conversion policy, that is, if you’re a present subscriber of Blue Cross/Blue Shield subscriber of Michigan. 

Lately, through speaking engagements, I’ve learned about a medical insurance that seems to be comprehensive.  It’s called Golden Rule. At this point in time, I’m not familiar with their claims experience with the medical insurance carrier.