COBRA Health Insurance Conversion Plans
Health insurance plans are the most important factors to consider when applying for a new job. A job that offers different types of health insurance plans helps employees get the most out of health care. However, when employees are laid off or even fired, they have an option to continue their health insurance provided by the employer. COBRA health insurance allows employees who have recently lost their employment continue their health coverage for up to 18 months. These types of plans are called COBRA health insurance conversion plans. They allow people to convert their existing health insurance to another plan in order to continue coverage.
The law stipulates that an employer who recently lost their job has up to 60 days to sign up for COBRA health insurance. The entire cost of COBRA health insurance is paid by the one being covered. People who have a pre-existing illness that were covered under their employer’s medical insurance plan will also be able to continue their special coverage under COBRA health insurance. Even though the employee has to pay for the full amount of the cost with COBRA health insurance, it is extremely beneficial to them when dealing with pre-existing illnesses.
If the employer who lost their job hasn’t been able to find employment within 18 months, and their COBRA health insurance expires, they are able to covert their plan. COBRA health insurance can be converted to an individual health insurance plan. This is called a “conversion plan” and is used quite often by people that struggle finding another group health insurance offered by employers. Not all employers offer “conversion plans.” Employers who offer COBRA health insurance conversion plans use a health insurance agency that will offer to sell individual insurance after COBRA has expired. This is extremely beneficial for those who are still hunting for a job after COBRA expires.
If you don’t know if your company provides COBRA health insurance conversion plans, talk to the human resource department. The human resource department will inform you whether or not the company offers these types of conversion plans. Rules may vary from state to state when dealing with COBRA health insurance conversion plans. In order to find out how your state deals with these types of conversion plans, you must do your own research in with the state that you’re in. The state’s insurance commissioner will have the information made available to you.
One of the benefits associated with COBRA health insurance conversion plans is that individuals do not have to be underwritten to qualify. Underwritten is a term used by insurance companies that deal with conducting a thorough background check on the individual applying for medical insurance. Since the individual already had coverage under a group insurance plan, conducting a background is unnecessary. This means that the individual already pre-qualifies for health insurance. Whatever was covered under the group health insurance plan will also be covered under the conversion plan as well. This also allows the individual applying for health coverage to avoid higher fees with pre-existing illnesses.
Before making a final decision on whether or not to use your company’s COBRA health insurance conversion plan, make sure to compare other individual insurance plans as well. Conversion plans may be more expensive and provide few services when compared to the coverage received under the group insurance plan. Benefits may be altered when using a conversion plan that will impact the cost and coverage. Not everyone is looking to use the COBRA health insurance conversion plan. In some cases, individuals can save on health insurance cost when buying individual health insurance without using the conversion plan. However, this is determined on a case per case basis.