Maura Carley, MPH, CIC
Maura Carley, MPH, CIC, CEO of Healthcare Navigation, LLC, a patient advocacy and consulting company, Darien, Connecticut.
HealthcareNavigation.com
Changes to America’s health insurance system might arrive as soon as 2010, but for now, life transitions, including relocation, retirement and loss of a spouse, could cause you to lose your coverage.
Many people assume that as long as they hang on to their jobs, their families can keep their group health insurance… or as long as they pay the premiums on their individual health insurance policies, they remain covered by those plans. But this isn’t always the case.
Some people even discover that they are no longer eligible for coverage after they have a major health problem, when their insurer refuses to pay.
If a life transition affects your access to your current health insurance, your options might include…
Remaining on your current plan for up to 36 months through the federal ruling called the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA).
Unfortunately, some of these options can be expensive, and others are not available in all states or to all applicants — particularly people with expensive preexisting health problems.
What life transitions could affect your coverage? Relevant laws vary from state to state, and rules vary from policy to policy, but certain transitions are particularly likely to cause problems…
Health insurance obtained through a spouse’s employer ends at the conclusion of the month in which the marriage ends. That’s true regardless of whether divorce or the covered partner’s death ends the marriage. (Some companies allow legally separated individuals to remain eligible for coverage until divorce — check with your benefits administrator.)
Those who remain on amicable terms with their former spouses sometimes fail to notify their insurance provider (or their employer’s human resources department) of their divorce or legal separation, in an effort to keep both partners covered. Do not do this. If the ex-spouse later has a serious health problem, the insurance company might launch an investigation, discover the truth and refuse to pay the bills.
You also might lose health insurance obtained through your spouse’s employer if your spouse retires. Ask your spouse’s employer.
What to do: If the end of your marriage or your spouse’s retirement affects your access to a group health plan, you might be eligible to remain on that plan through COBRA. If your spouse retires, you would have up to 18 months of COBRA. If your spouse dies or you divorce, you would have 36 months of COBRA. You will have to pay the full cost of this coverage out of pocket, and COBRA does not normally apply to employers with fewer than 20 employees (though some states have similar programs for smaller companies).
If your own employer offers health insurance, the loss of your partner’s coverage should make you eligible to join without waiting for open enrollment.
If you move to a different state, you often will have to find new health insurance — even if you just move a few miles across a state line. If you belong to an HMO, even a move within a state could cost you access to coverage — HMO membership often is restricted to the residents of specific counties.
What to do: If you are relocating but not changing employers, get information about which health plans your employer offers residents of your new region. You should be able to sign up for this without waiting for the normal open-enrollment period.
If you intend to purchase individual coverage in the new location, explore your options before your move — particularly if you or someone in your family has a preexisting condition. The availability and cost of insurance can vary dramatically from state to state.
Warning: If you intend to move or retire abroad, be aware that Medicare will not cover you abroad, nor will most US- issued group or individual health insurance plans. Many countries that have national health programs are making it increasingly difficult or expensive for recent immigrants to join. One option is international health insurance.
Resource: www.bupa-intl.com.
Working fewer hours could cost you and your family access to your employer’s group health insurance plan. State law and plan rules vary, but in general, those who work fewer than either 20 or 30 hours tend to be ineligible.
Helpful: These minimums refer to regularly scheduled hours. Taking sick days or vacation days should not affect your eligibility.
What to do: Ask your employer’s human resources department about your plan’s rules before voluntarily reducing work hours. If reduced work hours cost you access to your group health insurance, you might be eligible to remain on your plan for up to 36 months through COBRA.
Health insurance plans typically force kids off their parent’s coverage when they turn 19, though the age limit often is extended to 23 or 25 for children who are full-time students. And an increasing number of states now require health insurance providers to allow grown children to remain on their parent’s plan into their late 20s.
Examples: In Connecticut, Illinois, New Hampshire and Utah, kids often can remain on their parent’s coverage until age 26… in Pennsylvania and South Dakota, until 29… and in New Jersey and New York, until 30.
Restrictions might apply to these extended dependent-age limits. The adult children might have to live in the same state or under the same roof as their parents to qualify… or be financially dependent on the parent… or remain unmarried. To learn your state’s dependent-coverage rules, speak with your employer’s benefits administrator, contact your state’s insurance department or consult www.statecoverage.org (click “Coverage Strategies,” then “Dependent Coverage” and “States”).
Important: In most states, part-time students do not qualify for dependent coverage.
Example: When a 19-year-old student develops a heath problem, the insurance company investigates and determines that he is enrolled in fewer than the necessary number of classes to be considered a “full-time student” — typically at least 12 credits per semester — and therefore is not eligible to be a dependent on his parent’s plan in that state.
Even if an adult child is eligible to remain on the parent’s plan, this coverage might not be ideal if the child lives in a different state — or perhaps even a different region of the same state if the parent belongs to an HMO that does not have facilities in the child’s area. The adult child likely will have coverage for emergency care but might have to return home to obtain coverage for other medical services.
What to do: Healthy young adults often can obtain individual health insurance at relatively reasonable prices.
Resource: www.ehealthinsurance.com.
College students sometimes can obtain health coverage through their schools, though coverage under these policies tends to be extremely limited.
Former dependents sometimes can remain on their parent’s plans for up to 36 months through COBRA.
Many companies, particularly those with employees in more than one state, offer coverage to employees that is not governed by state laws but through federal legislation referred to as the Employee Retirement Income Security Act of 1974 (ERISA). If you work for one of these companies, you will need to determine from the benefits department what the rules are, for example, for dependent children remaining on the plan, because state laws do not apply.
