COBRA insurance or an Ohio private health insurance plan. If you are currently insured under a group medical plan and you retire or leave your employer, you have a decision to make. Should you accept the offer (assuming it is available) or purchase a personal healthcare policy. Generally, COBRA medical rates will be high, unless the employer is paying a portion of the premium.
Before determining which option is best, it’s important to understand exactly what COBRA is. The “Consolidated Omnibus Budget Reconciliation Act” allows an employee, spouses and dependents, the right to continue their medical benefits after they have left their employer (subject to guidelines). This often includes dental and vision benefits for yourself and all eligible dependents.
Previously, a stimulus package was available to help defray costs, although it is no longer offered. Typically, this period of time is 18 months, although with some circumstances, a spouse and dependents can keep benefits for 36 months. A total disability may allow an employee to retain COBRA for 29 months.
Before the 18 months expires, a policy that guarantees coverage and pays for pre-existing conditions is likely to be available through the Ohio Marketplace. You should receive notification in writing, and the letter will inform you about specific options. The plan administrator of your employer should have a copy of the letter, and may be able to provide additional details regarding dental and vision options. Medical coverage can be purchased without the dental or vision coverage. However, typically, the same benefits must apply to all covered persons.
A federal subsidy may be offered, depending upon household income, to reduce premiums. The subsidy is not taxable, and is applied directly to the premium via an instant tax credit. Each year, the subsidy can change, especially if household income increases or decreases. Changes in composition to the number of household members can also impact the subsidy. If a member becomes eligible for Medicaid or Medicare, additional options can be considered.
The Female Spouse Role
It’s also important to understand that women’s participation in the work force is significant, and often they are the decision-maker regarding many of the topics we discuss in this article. Prior to age 50, females tend to utilize benefits more, and are often the care giver (if needed). With increased diversity, many additional preventative benefits are now covered, along with much more comprehensive maternity benefits. Qualified plans have also eliminated a separate deductible for maternity benefits, and cesarean section coverage is more comprehensive.
The United State Department Of Labor publishes a small guide about women and job-based health that can be very helpful. This fact sheet highlights some of the common roles and issues facing women when they leave an employer and must compare benefit options. Also, many more families now obtain their benefits through the wife’s employer. Therefore, when she retires, a private Marketplace plan or Group coverage through the spouse may have to be selected. In these situations, multiple policies can be issued for different family members.
COBRA Or Exchange Plan
You may be eligible to buy an Exchange policy through Open Enrollment, which may be much less costly than the transitional benefits you are offered. You don’t have to pass (or take) a physical and you will not be denied because of medical issues you are being treated for (past or present). There also will be no surcharges or waiting periods for any services, and all carrier plans in your service area will be offered. You may also decline any state or federal subsidy, and choose alternative plan options.
Just as importantly, if you have not completed the full 18 months of COBRA benefits, you can still enroll for Marketplace coverage. For example, if you became eligible in July, although only six months have been utilized by the end of the year, you may still compare, and ultimately enroll in Exchange policies. Of course, we will help you research and understand which option is best for your situation. Note: Once you elect to voluntarily terminate COBRA benefits, you will not be able to re-enroll, with the exception of several obscure situations.
If you qualify for a government subsidy, it’s highly probable the Exchange plan will be the best solution. The qualifying criteria is having a household income between 100% and 400% of the Federal Poverty Level. The resulting premium tax credits will allow you to purchase affordable coverage or possibly become Medicaid-eligible.
COST OF COBRA
The rate you pay is 102% of the cost charges to the employer by the insurer. Of course, this can present a problem since group rates can be very expensive…often, much more than a private plan will cost. Thus, it’s not unusual for an individual rate to cost as much as $600 per month and a family rate double (or more). Dental and vision rates, however, are usually not expensive.
One of the reasons for these high premiums is the richness of benefits you often receive with an employer-purchased plan. Often, the catastrophic deductible is very low, perhaps $500 or less. Sometimes, there is no deductible on major claims which will drive premiums up. Maternity and mental illness benefits are always included in group plans which can easily add $200-$400 per month of premiums. All qualified Ohio health insurance policies also include maternity benefits. Policies that exclude these coverages are considered “non-compliant.”
Your Group plan at work is likely partially-paid by your employer. It’s not unusual for a $1,000 per month plan to cost the actively-working employee less than $300 per month. Depending on the type of coverage, by electing an HSA or catastrophic option, perhaps up to 80% of the premium is covered. Low-deductible HMO plans are often the most expensive option, and are typically Gold and Platinum-tier contracts.
Group Policies Through Work
Traditionally, the makeup of a group medical plan consists of a higher proportion of unhealthy insureds, or persons with very serious health problems, unless the employer hires an unusually high number of young employees. Since every applicant must be accepted into the plan, unlike a previously medically-underwritten personal policy, the premium that you are offered may be quite high, if the employer’s contributions towards paying the retail premium are limited.
Thus, when presented with choosing to accept your offer or a private Ohio health insurance plan, perhaps the biggest variable is the rate that you will pay. If all members of your family have no major medical conditions, choosing to purchase your own coverage may be a viable option option, since the rate difference might be substantial. A high-deductible HSA or Bronze-tier plan may compare very favorably to the options presented by your employer.
If you choose to reject your employer’s Group offer, you may not be eligible to utilize federal subsidies towards the purchase of a Marketplace plan. If the Group policy (your cost only) costs less than 9.69% of your total household income (MAGI), the policy is considered (affordable) and a federal subsidy will not be offered. Qualified dependents may be able to qualify for a subsidy if the apply separately and file their own federal tax return.
It is critical that if/when you apply for an individual or family plan, that you don’t overlook the deadline that you have to formally accept the COBRA offer. This is important in the event that the offer you receive on your new policy is either unacceptable or will not be available before the deadline.
You also should allocate at least 3-5 days to review the offer and discuss the details with us, or an experienced licensed broker in Ohio. Insurance laws can also be reviewed. Although Open Enrollment occurs every year, there is only one chance to enroll in COBRA, so it’s important not to miss the deadline. Dental and vision benefits are also often offered.
Combination Of Different Plans
Sometimes, it may be worth considering a combination of COBRA and a private medical plan. This works best when the individual eligible for benefits has an extremely serious medical condition and is uninsurable. However, all other members of the family have relatively no issues (or very minor conditions). If a dependent reached age 26 while covered under a parent’s plan, typically, they will become eligible for their own policy, without medical underwriting.
In these types of situations, the combination of a single plan on the individual and a private plan on the remaining members of the family could save thousands of dollars per year. One of the best plans can be found here. COBRA will cover pre-existing conditions on the insured that badly needs that coverage. Meanwhile, other more healthy family members may pay a much lower rate with a separate policy. However, benefits may vary and the provider network may be different.
They also can choose a completely different type of coverage (if they choose that option). Thus, one spouse may have catastrophic coverage while the spouse and children have a more comprehensive plan. Or perhaps the worker that leaves the employer keeps “Cadillac” benefits while other dependents select a much cheaper option that keeps prices low.
Perhaps the most important thing to understand about COBRA health insurance in Ohio is that there are many affordable choices. Since pre-existing conditions are not factored into private plan (Marketplace) rates, if you qualify for the federal tax subsidy, you should be able to find a much more economical option by purchasing coverage through our website.
Additional Information: – If your Ohio COBRA benefits are ending after the last day of Exchange Open Enrollment, you can still purchase a subsidized plan. When your coverage ends, it is considered a “special event,” which entitles you to buy a healthcare plan that is ACA-compliant. Therefore, your policy would not be medically underwritten, and all of the new Metal options would be available.