Stethoscope and a calulator. Calculators are sometimes needed to determine an embedded deductible for health insurance

Best Ways To Get Health Insurance Between Jobs




Changing jobs is a hassle. Even when the change is your decision and you are excited about making a move, there is a lot of uneasiness that comes with finding new work. When you are between jobs due to a termination of some sort, it is not uneasiness you deal with, it is piles of stress. One of the biggest issues during a change of employment is finding good health insurance between jobs. Fortunately, there are a few ways to make sure that you and your family are covered in the event you find yourself without employer sponsored health insurance.

Before you start looking at your options, there are a couple of things you will need to understand.

  • First, make sure you have a firm understanding of when your coverage will begin at the new place. The Patient Protection and Affordable Care Act (PPACA) limits, for the most part, waiting periods to less than 90 days. Still, you will need to know if you will be covered on your new date of hire, first of the month following date of hire, first of the month following 60 days of employment, etc.
  • Second, know going in that some of these options will be more costly than what you were paying at the old place. Your employer was most likely subsidizing a large portion of your premium. The amount varies by the employer, and some do not pay much, but some do.
  • Third, a new plan will most likely have a different provider network, meaning your old doctor may not be in the network and you will pay more to visit him/her. Or you may not be able to visit that person at all. Check the networks of the plans you are considering.

Having said all that, here are the best ways you can get health insurance between jobs.




Health Insurance Marketplace

The health insurance marketplaces set up under PPACA are a great place to start when you find yourself looking for medical insurance at any point, especially if you are between jobs. The marketplaces, also called exchanges, have an annual enrollment period during which everyone can enroll, but if you have certain qualifying events, you may enroll at any time during the year. A loss of coverage is considered a qualifying event, so if you lose your insurance coverage when you leave a former employer, you can purchase a plan on the marketplace.

On the marketplace you will be able to easily explore and compare insurance options available in your area. Marketplace plans can be more expensive than what you were paying at your job, but you might also be eligible for a subsidy to help pay the premium. If the price is right, the marketplace might be the best option for finding health insurance between jobs.

COBRA

Employers that employ 20 or more people are usually required to offer COBRA. COBRA allows employs to continue to be on their former employer’s health insurance plans. The catch is that the employee is required to pay the full cost of the premium plus a fee, usually an additional 2%. For a family plan, this can be upwards of $2,000 per month or even more. An individual plan might be around $500 per month, but compared to what the employee was most likely paying out of a paycheck, $500 is a big jump.

COBRA guarantees that your plan will stay the same, and your doctors will still be available. But it is costly, so make sure this is absolutely the best option for you when you need health insurance between jobs.

Short-Term Health Insurance

Another option is to get a short-term health insurance plan, or temporary health insurance. As the name implies, short-term health insurance is when you only will need the insurance for a small amount of time. It is not full coverage medical care, and it will not keep you from the PPACA individual mandate penalty. In fact, short-term health insurance is not subject to most of the PPACA provisions.

Companies offering short-term health insurance can deny coverage for pre-existing conditions, and they are not required to renew coverage.

Still, temporary insurance can be a great cost-effective way to get the medical care you need.

Coverage Through a Spouse’s Plan

For married couples, if both people work, the person that is between jobs can jump on their spouse’s plan if one is offered through that person’s employer. There probably was a good reason why both people were not on the remaining plan to begin with, so there is a good chance that the coverage or price may not be as good as the coverage that was lost. But the plan may still be better and cheaper than what is available through the marketplace and COBRA. And the plan will definitely cover more than what short-term insurance covers. If this option is available to you, it is probably your best bet when you need health insurance between jobs.


Joining a Parent’s Plan

For people under age 26, enrolling in a parent’s employer-sponsored plan is a terrific option. Many employers do not charge much additional for children, and if another child is already on the plan, there is a good chance that the monthly cost will not increase at all. The plan still probably passes all the tests to avoid the mandate penalty, so it keeps you out of trouble with the IRS.

Telemedicine

While not health insurance, another way to get inexpensive health care while between jobs is to utilize telemedicine.  With telemedicine you can talk to a doctor anywhere, anytime, 24/7.  The cost is much lower than if you went to a doctor’s office and paid for the full charge of the visit, especially if you are not getting a network discount due to having no health insurance between jobs. Check out the link above and see if telemedicine is for you.

Health Insurance Between Jobs is Available

Being between employers is not always a fun thing to go through. Making sure you and your family are covered for medical expenses is a big priority. Fortunately, there are several ways to make sure everyone has quality and inexpensive health insurance between jobs.

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What is the ACA Individual Mandate Penalty?

With the Patient Protection and Affordable Care Act, or Obamacare, now fully in effect, there is a mandate that every American purchase health insurance or pay a tax as a penalty.  So what is the dollar amount of the ACA individual mandate penalty, and what exactly would need to happen to cause someone to have to pay the penalty?  Lets take a look.

Exemptions from the Individual Mandate Penalty

Not everyone without health insurance that lives in the United States will be required to pay the individual mandate penalty.  If any of the following apply, then the penalty might not be required.

  • Religious opposition to accepting health insurance benefits
  • Membership in an Indian tribe
  • Incarceration
  • Family income below the threshold for filing an income tax return
  • You pay for than 8% of your income for health insurance after employer contributions and tax credits are taken into account
  • Undocumented immigrant

If an individual does not fall into any of those categories, then having insurance from the following sources would then exempt him or her from the individual mandate penalty.

  • Medicare
  • Medicaid or CHIP
  • TRICARE
  • Employer-sponsored plan
  • Individual insurance that is at least at the Bronze level
  • Veteran’s health program
  • A grandfathered health plan that was in existence before the ACA was enacted

If someone does not have one of those types of insurance plans, then odds are he or she will be required to pay the individual mandate penalty.

How Much is the ACA Individual Mandate Penalty?

The penalty for not having health insurance will increase as the years go by.  For the first 3 years of the law’s existence, the penalty will look like this:

YearGreater of:AdultChildFamily Max
20141% of family income, or:$95$47.50$285
20152% of family income, or:$325$162.50$975
20162.5% of family income, or:$695$347.50$2,085

 

 

Some key notes:

  • Definition of income: Total income in excess of the filing threshold ($10,000 for individuals, $20,000 for families, in 2013)
  • Penalty is pro-rated by the number of months without coverage
  • A single gap of coverage of less than 3 months will not result in a penalty.  This is of importance for those enrolling in the initial Marketplace Open Enrollment.  The Open Enrollment deadline is March 31, which will start plans on either April 1 or May 1.  For those without coverage on January 1, this would result in a lack of coverage for over 3 months, and would seem to then result in an individual mandate penalty.  However, HHS has said that individuals that fall in this bucket can file a waiver to avoid the penalty.
  • The penalty cannot be greater than the national average of Bronze coverage on the exchanges
  • After 2016 the individual mandate penalty increases by the cost of living index

There are many things to consider when it comes to insuring yourself and your family.  The ACA individual mandate penalty is one of those things.

Source: Healthcare.gov

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What is a Health Insurance Exchange Notice and Why is it Important?

With the health insurance exchanges, also known as health insurance marketplaces, set to open for business on October 1, 2013, the world of health insurance is about to change dramatically.  Through these exchanges individuals will be able to purchase medical insurance by comparing plans, insurance companies, and premiums side by side on their computer screen.

One of the advantages of buying insurance through the marketplace is the possibility of obtaining a tax credit subsidy to help pay for the cost of the coverage.  However, not everyone is eligible for the subsidy.  One of the ways to not be eligible is to be offered affordable coverage with a certain level of benefits through your employer.  But how do you know if your group coverage makes you ineligible for the tax credits?  Your employer will provide you with a health insurance exchange notice.

What is the Health Insurance Exchange Notice?

The health insurance exchange notice will explain to you whether or not your coverage eliminates you from the subsidy.  Employers are required to provide this notice to existing employees by October 1, 2013 and to new employees within 14 days of employment.

There has been some confusion about possible penalties given to employers who do not comply with the requirement to provide a health insurance exchange notice.  Some reports suggested that there would be a $100 per day per employee penalty.  The Department of Labor came out later and confirmed that there would not be a penalty for lack of compliance.  Still, employees are encouraged to send the notice.

If your employer does not provide a notice, it is still important to find out if you are offered coverage that will keep you from being able to access the tax subsidy.

Why is the Health Insurance Exchange Notice Important?

The Patient Protection and Affordable Care Act requires every American to purchase health insurance or else face a tax.  Since health insurance is an expensive addition to the budgets of many people, the law allows for subsidies to help pay for the premiums.  However, if medical coverage is available through an employer, the subsidy is not available.

When an individual applies for coverage through the exchanges, the site will ask if group coverage is offered.  To be accurate in answering this question, people can rely on the health insurance exchange notice provided by their employer.

Are Model Notices Available?

Model notices are available through the Department of Labor’s website.

Model notice for employers that offer a plan

Model notice for employers that do not offer a plan

Group Coverage can be an Inexpensive Option

Even if you are not eligible for a subsidy because of employer sponsored coverage, the group coverage is still a great option.  The Affordable Care Act mandates that employers cannot charge employees more than 9.5% of their salary for coverage.  In many cases, this premium will be less expensive than coverage purchased through an exchange, even with a subsidy in place.  Therefore, not being able to get the tax credits because of available group coverage is not necessarily a bad thing.

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How to Find Health Insurance That Is Affordable Under Obamacare

Beginning on January 1, 2014, most of the provisions of the Patient Protection and Affordable Care Act (PPACA), also known as Obamacare will go into full effect.  One of these provisions is the requirement that every American have health insurance or pay a fine.  Therefore, it is very important to find health insurance that gives you the coverage you need at a price you can afford.  But how do you do this?  Despite the controversy about the overall cost of the Affordable Care Act, there are some new ways to find affordable health insurance on an individual level.  Here are 4 ways that you can find health insurance that fits your budget and medical needs.

Reformed Group Insurance through an Employer

Obamacare has reformed the group insurance model.  While originally set to be implemented in 2014, the employer mandate to provide health insurance has been postponed until 2015.  Still, once it is put in place, you will be able to find health insurance through your employer that puts limits on what you pay for the plan and what your out of pocket limits will be.

The Affordable Care Act requires that employers with more than 50 full-time employees offer medical insurance to all of their full-time employees.  Full-time is defined as anyone who works at least 30 hours per week.  There are different calculations that go into the full-time definition, but just know that if you average 30 hours per week, you must be offered coverage.

The coverage that you are offered must have at least a 60% actuarial value, meaning that on average, for every dollar that the insurance covers, the insurance plan must pay for at least 60 cents.  One of the ways this is achieved is by limiting the individual’s out of pocket maximum.  In 2014, the limit is $6,350 and includes deductible, coinsurance, and copays.

Also, the employer cannot make an employee pay more than 9.5% of their salary to participate in the plan.  If you make $2,000 per month, the most you can pay for your insurance is $190.  Having said this, there is no cap on the cost of insurance for a dependent.

Still, with these provisions in place, you can find health insurance that is probably cheaper and better than before.

Health Insurance Marketplaces

Obamacare created health insurance marketplaces – originally called exchanges – to help people find health insurance plans quickly and efficiently online.  The marketplaces will make the search for a good plan easier than looking for individual insurance on your own.  Everything will be in one place.

While it will be interesting to see if the actual premiums of the plan are any cheaper than pre-Obamacare, some people will get help paying their premiums by way of tax credits (see here for tax credit eligibility).

If someone can find health insurance and use a tax subsidy, a good plan at a low rate will be available.

Parent’s Plan

The Affordable Care Act requires insurance companies to allow children to enroll in their parent’s insurance plan until age 26.  This is very advantageous because many times the cost to add a dependent to a plan is lower than the cost of an individual plan.  In fact, many times a new dependent can be added at no cost since some plans have one premium rate for all children on a plan.  In that case, someone under age 26 can effectively find health insurance that is free.

Medicaid

When Obamacare was passed, it required Medicaid to be expanded in every state.  This expansion will make it easier for adults to find health insurance through this government program.  The Supreme Court took away the requirement, and as a result, many states will not be expanding this coverage.

However, if you live in a state that is expanding Medicaid, check to see if you are eligible for this low cost way to care for medical needs.

Find Health Insurance at an Affordable Rate

When you try to find health insurance at an affordable rate, make sure to be patient and look at all your options.  Good coverage at a reasonable price is available.

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What are the Best Health Insurance Companies for You?

Purchasing medical insurance is not always an easy task.  Trying to decipher between the best health insurance companies takes time and an understanding of what makes a good benefit plan.  Between the different plan designs and carriers available, finding the right fit for you and your family is not an easy decision.

With the requirement that all Americans have health insurance or else face a fine/tax, there will be many people looking for the best place to buy coverage for their medical services.  Here is what to look for when searching for the best health insurance companies.

A Network That Includes Your Doctor

Most health plans now include networks of doctors and facilities.  These networks offer competitive pricing for medical services through discounts and less out of pocket expenses for the policyholder.  If a provider is not in the network of your insurance plan, you will be required to pay more out of pocket through the health insurance plan.  Plus, the doctor or facility can balance bill you, meaning they can bill you for charges not paid through your insurance plan.  Whether you use Blue Cross Blue Shield, Aetna, Cigna, United Healthcare, or any other of the multitude of health insurance companies, if you use a network provider, what you pay through your benefit plan will be all you owe.

The networks of the best health insurance companies can be investigated on their websites.  Before signing up for a plan, make sure your doctor, hospital, lab, etc. are included in the potential network.

Great Customer Service

Since medical and prescription drug insurance plans are not the easiest contract to understand, you will undoubtedly have a question about your plan or how a claim was processed.  The best health insurance companies will have a friendly and helpful customer service.  This customer service should include an understanding of how your plan, and insurance in general works.

Sometimes, a claim will not be paid the way you think it should.  The insurance company should give you an option to appeal, and if the appeal goes against you, they should be able to provide you with a clear explanation of why.

Mobile Apps

One of the services that the best health insurance companies are now incorporating into their services are mobile apps.  These apps allow individuals and families to keep track of their claims, how much they owe for medical services, and how much they have paid out of pocket.  The apps are free and easy to use.

Great Coverage

Before you fall in love with an insurance plan that has a great premium, make sure that it has all of the necessary coverage for your medical needs.  The Patient Protection and Affordable Care Act, also known as Obamacare, requires minimum coverage in order to avoid the individual mandate penalty, but the minimum coverage isn’t a high bar to reach.  Because of this, some companies are offering inexpensive plans that do not cover much.  The best health insurance companies will give you a great price with great coverage.

Low Premiums and Renewals

The saying “you get what you pay for” definitely applies in health insurance.  However, that does not mean that you should ignore the premium.  If you find a few plans that meet your medical needs and offer great customer service and networks, then by all means, factor in the premium.  That’s what competition and the health insurance exchanges are all about.

Also, the best health insurance companies will not offer a low initial premium only to follow it up with a high renewal.

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