Many employees made the decision to take their current job based on the duties involved, the rate of pay, and the health insurance packages and other benefits offered by the perspective employer. In the even you lose your job due to a layoff or a termination, employees may qualify for a continuation of insurance even though employment has ended with the company. Because of the 1986 Consolidated Omnibus Budget Reconciliation Act, employers who have more than 20 employees working must offer continued insurance, commonly known as COBRA.

COBRA insurance works in this fashion: employees who wish to remain under their employer’s sponsored insurance plan must pay 102% of the premium for the health insurance policy. This percentage includes the amount the employer initially subsidized during the individual’s employment term. Eligible participants will receive the same coverage and services as all other still-employed individuals receive under the policy.

The Downside of COBRA
While the option to continue on the same insurance policy as when they were employed seems like a great plan, many do not realize they will have to pay more for the insurance coverage than they did when employed. Since the company is no longer footing part of the bill, COBRA coverage can be expensive to maintain, especially if you are out of work. The coverage you may have under COBRA may fit your health care needs, the payments will not always fit your wallet so it may be in your best interest to shop elsewhere for medical insurance. Don’t be fooled into thinking that everyone else is jumping on the COBRA bandwagon after leaving a job. You need to do what you can financially to ensure your health care needs are covered at a premium you can afford to pay. Each individual will need to assess their own situation and find a health insurance policy to meet their needs, whether it is through COBRA or not.

Qualifying for COBRA
Before you make a decision to leave your position or to accept continued coverage through COBRA, you will first need to make sure you are eligible. There are various deadlines for applications and payments in order to have continuous coverage so you will need to know what time lines you will need to abide by so your coverage is not interrupted.

If you do plan to continue insurance coverage through your former employer, make sure you understand clearly the terms and conditions of the benefits under the policy. There is always a possibility that you will move to find other work. In the event you do make such a life change, you will need to know if the new area medical facilities will be covered under your policy. You also want to be clear about the total cost of paying for the premium and whether or not it is in your budget. It will make sense to shop around for other policy information and compare services and price with companies beyond the one sponsoring the policy your currently maintain.

Most people are familiar with the cute little duck that loudly quacks “Aflac” on television commercials. While the company’s mascot is easily recognizable, many people remain in the dark as to what supplemental health insurance plans cover.

What are supplemental health insurance plans?

As the name implies this form of insurance provides supplemental or “extra” coverage; designed to fill the gaps and holes left by deductibles and co-pays in standard health insurance policies. Specific plans may cover additional items such as lost income or added cost of living expenses due to a long injury or illness. Supplemental health insurance is a cash benefit paid to the insurer based on the specific plan or policy. Policies vary with a number of plans available for disease specific insurance (cancer), accidental death and dismemberment, accident health and hospital indemnity insurance.

Is a supplemental health insurance plan right for you?

You may be wondering why you would need “extra” insurance if you already have health insurance. Purchasing supplemental insurance is a personal choice that depends on several factors such as:

• Do you have special risk factors?

• How much insurance do you want to carry?

• How much insurance can you afford to carry?

• How much savings do you have available in the event you were unable to work for an extended period of time?

Before purchasing supplemental insurance you should first determine the level of coverage that you have through your standard health insurance policy. If you have a good policy most of your health insurance bills should be covered.

Do you have specific risk factors that make it more likely that you may be in need of this type of insurance coverage? Retired persons, elderly persons, large families or self employed individuals may be less able to handle the onslaught of medical expenses that go hand and hand with a medical emergency. Anyone who would suffer financially if they were unable to work, may consider the cash benefits worth the relatively low cost of the premiums.

What expenses are covered by supplemental insurance plans?

We have established that this insurance covers “extras” that your standard insurance may miss. Here are a few examples of expenses supplemental insurance may cover.

• Transportation costs

• living expenses

• child care needs

• out-of-pocket hospital expenses

• diagnostic testing

• private duty nursing services

 

Insurance needs and personal finance decisions vary greatly from person to person and you should make any decisions regarding supplemental insurance benefits based on your specific situation.