Alternatives to COBRA

COBRA may not be your only health insurance option if you’ve experienced a qualifying event. Chances are you can find coverage through other alternatives, like individual or family plans, that will cover you and your family at a fraction of the cost of COBRA.

Do a little homework before making your coverage decision. You may find you have some less-expensive options, such as:

Coverage through Your New Employer

Congratulations on your new job! Does your new employer offer benefits? If so, you may be able to opt for coverage under your new employer’s plan.

Depending on the plan rules, there may be a short period of time when you are without coverage. If you can’t go without coverage, you can elect COBRA for this brief span of time. Or you can purchase a short-term medical plan.

Coverage through Your Spouse’s Plan

If your spouse has a job, you may be able to get coverage under their employer’s plan, even if your spouse isn’t covered by the plan right now. A federal law known as “HIPAA” mandates that group health plans provide special enrollment rights to individuals under certain circumstances. These special enrollment rights allow eligible individuals to enroll in the plan without having to wait until the plan’s next open enrollment period.

Coverage as a Dependent

Are you younger than age 26? If so, you may be able to get coverage as a dependent under your parent’s plan. Health care reform acts passed in 2010 require that group health plans offer coverage to “young adult” dependents up to age 26.

Individual and Family Plans

Many people find an individual or family plan (IFP) is a better option than COBRA. While the benefits of an IFP may be less substantial than the benefits offered by an employer-sponsored group health plan, the rates are often much more affordable.

Be aware when purchasing individual insurance that companies selling individual health insurance typically require a review of your medical history. This review can result in a higher premium or you could be denied coverage entirely.

Please Note: Beginning January 1, 2014, adults can’t be denied coverage when enrolling in an individual or family plan. That’s because of health care reform changes to a rule called “guaranteed issue.” In 2014, you won’t be denied IFP coverage regardless of your age, health status, or gender. And in most states, the amount you pay for an IFP won’t increase.

Health care reform has already changed the guaranteed issue rule for children younger than age 19, and kids cannot be denied coverage due to a medical condition. This requirement has been in effect since September 23, 2010. It applies to both IFPs and group health plans.

See examples of how an individual or family plan can work for you.

State-run Programs

Many states offer programs for low-income individuals and families. These programs can help you pay for coverage, or in some cases, pay for your medical bills on your behalf. Each program has its own eligibility requirements that you must meet in order to qualify for benefits through the program. You can find more information at your state’s Department of Insurance website.