It has happened. You were or are going to be laid off. Your soon-to-be-last employer has informed you that you can select COBRA and pay the full 100 percent (plus 2 percent administration) of the premium. You think, “Great, I am covered.”
However, you find out 45 to 60 days later that your premium is two or three times higher than what you previously contributed. The latter is the norm. I have seen singles and families with $600 and $1,200 monthly premiums, respectively. There go your layoff-package dollars.
You do have options. If you and your family are healthy and do not have to be on COBRA due to pre-existing conditions, then go to individual coverage. Two reasons: You can save 40 to 60 percent on premiums, and if you have an accident or illness on COBRA, and then try to go to individual coverage, you are at risk for a decline or exclusion. Also, in this economy it may take three to six months to land that next job, and then the job might be contract-to-hire with no benefits or a waiting period of three to six months before you’re eligible for benefits. You could be looking at COBRA for six to 12 months. If you or several of your family members do have a pre-existing condition and have been declined by individual coverage, then research CoverColorado. It is a nonprofit entity created by the state legislature to provide medical insurance for eligible Coloradans who, because of a pre-existing medical condition, are unable to get coverage from private insurers. Visit www.covercolorado.org and do a quick premium estimator.
Also, look into Child Health Plan Plus (CHIPS), low-cost health insurance and dental care for Colorado children. Many working families qualify for
CHIPS. The website is www.chpplus.org.
Don’t wait to research CoverColorado and CHIPS. It takes time to go through processing with these organizations to find out if you qualify and what to expect in coverage and premiums. It takes time to evaluate individual coverage from different carriers. The plans are different, with different deductibles and co-insurance. You’ll need to make decisions about co-pays, deductibles and levels of coverage. Again, it takes time — you will need to stay on COBRA until you find the correct coverage and are approved.
The key is to be creative and not feel trapped with COBRA. Talk to a licensed health insurance agent and get creative.
Christel Kellogg has been in the health insurance industry for five years. In 2008, she became a Colorado licensed health insurance agent with USHealth Group Inc., a subsidiary of Credit Suisse. Her business website is www.ushginsurance.com/christelkellogg.