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Death to COBRA!

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If you have recently lost your job, upon unemployment, some of you will qualify for a COBRA extension for your Ohio individual health insurance.

However, not all companies are required to extend Ohio COBRA benefits (only companies with over 20 employees).

Even if you do qualify for a COBRA extension of your Ohio health plan, you may notice that the cost of coverage is usually MUCH more expensive.


Instead of only paying the employee contribution of your health plan,you will have to pay your contribution, the business contribution, and an administration fee.

So many unemployed Ohioans are shocked to see their former contribution of a few hundred dollars significantly increase to a ohio health insurance premium of well over $1,000 per month when they take a Ohio Health Insurance plan COBRA extension! That is why people search for COBRA alternatives such as an Ohio individual health insurance plans.

 

Your Host:

 

Matthew Byrne

 

Mr. Byrne is also co-founder and CMO of Spiralight Group & MyHealthQuoter.com and has developed proprietary systems and processes that leverage innovation to deliver cost savings to his clients.

 

Mr. Byrne holds a Bachelor of Arts from Boston University and holds a life and health insurance license.

 

Part One, Listen to my last episode Cost Savings Strategies for Group Health Plans at http://t.co/pQrO1Tvk. #BlogTalkRadio

Transcript

0:19 Matthew Byrne

Thank you for joining us. This is Navigating Health Insurance. My name is Matthew Byrne. Today's date is December 27, at 11:00 a.m. Happy Holidays and thanks for tuning in today. Our topic is Death to COBRA! Navigating Health Insurance is an insider's guide to various different health insurance related topics everything from health reform to employer-sponsored plans, and individual and family plans, kind of looking and finding ways to create more affordable solutions and giving some of that inside information that you need to make choices. So, thanks again for joining us. My name is Matthew Byrne, I have a brokerage firm called MyHealthQuoter.com. We offer a host of various different shopping and bidding services, but if your are looking for insurance, you can go to MyHealthQuoter.com and look for 250 plans from 10 different health insurance companies. We do everything from large groups to small and medium sized businesses as well as the self-employed, 1099, and individual and family insurance. So again, thanks for joining us. If you need to call in, our guest call in number is 818-668-5442. Feel free to call in and listen, or join us, or ask questions, we're glad to have you. So let's get right into it. Navigating Health Insurance our topic is understanding COBRA. So, let's just start with the basics. What is COBRA? COBRA is the Consolidated Omnibus Budget Reconciliation Act. It provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates.

2:00 Matthew Byrne

What a lot of people don't understand COBRA is that the exact same plan that you are on at your last employer. So, if you are leaving companies, or switching companies or thinking about making that transition and a COBRA offer might be available to you, you will have the peace of mind to know that all of your former co-workers are on the exact same plan that you're on. You're not getting in to a different pool. It is not a different set of benefits. Same co-pay, same deductible, same health insurance company. So, if you had United before, you are going to have United on the other side. If your last plan was Anthem Blue Cross and Blue Shield, the new plan will also be Anthem Blue Cross and Blue Shield. You will even preserve and retain the same member number in most cases. So, you won't even need to new cards. Now, one of the things that catch people by surprise that relates to COBRA and why this episode called Death to COBRA is because anyone who has ever received the COBRA offer quickly gets the sticker shock and the debilitating price tag that comes along with the COBRA offer. So why is that, why is COBRA so expensive? Since the exact same plan, why do I pay so much more than what I used to be playing? And thee answer is that when you were an employee of that company, they were sharing in the cost of your coverage. It is required that all employers pay at least 50% of the employer-sponsored medical plans. Larger groups -- there are certain provisions where that might be may be replaceable but less on that but for instance and purposes, your employers playing at least 50% of your coverage when you are an employee. Many cases, they are paying, 60%, 70%, or 80%. So for example, if you are paying $300 a month for your family and that was a pretty nice check that you had to see a nice deduction you have still your check every month that probably hurt a little bit on the wallet. But then your COBRA offer comes in a $1000 well, where is the disconnect? How come that change so dramatically, and the answer is that your $1000 COBRA bill is your portion $300.

4:00 Matthew Byrne

and your employer's portion which is in this case or this example is $700. So you are going to pay 102% of the total cost of coverage. There is a 2% administrative cost that your employer can charge you from doing all the paperwork and the filing and dealing with the questions and the comments, so 102% of the original amount. So, I think you can really sort to understand the true cost of insurance when you realize the COBRA offer is including your portion and the employer's portion. So who is eligible for COBRA? Well, if you had a qualifying event you'll be eligible for CORBA. For example, if your spouse died and you have their coverage you would be issued a COBRA offer or would be eligible for COBRA. So the death of a covered employee is one of the qualifying events. The one most of us know is that the employee losses eligibility for coverage due to involuntary termination or reduction of hours that result of a resignation, discharge, layoff, strike, lockout, medical leave, or slow down in business operations. All of these would stimulate a COBRA eligibility event. Regarding discharge or termination, as long as this is not for gross misconduct, then you too would be eligible for COBRA. So being fired or terminated or lockout does not in and of itself terminate your ability to get a COBRA policy unless there is gross misconduct. A third eligibility trigger point would be divorced or legal separation. So if your husband or wife it the primary policy holder at their job and you become divorced or legally separated, you as the ex-spouse would be eligible for COBRA benefits under your spouses plan. So the spouse would obviously retain coverage through their employer and nothing would really change with them. But you as the spouse, who is in the midst of a divorce would be eligible for COBRA.

6:00 Matthew Byrne

Usually, COBRA lasts 18 months in the case of divorce. That is actually 36 months. So that is kind of a nice landing place and a protective place, but if you are in that situation you know that your benefits can be preserved. Now, doesn't change the fact that it is debilitatingly expensive and -- but it's good to know that, that option is there if you should need it. A dependent child is another event. If that child reaches the age and they are no longer covered on COBRA or covered under the group eligibility requirements, that dependent child can also access coverage through the COBRA extension program. In Ohio, it used to be that your employee or that your dependent needed to be a fulltime student and be under a certain age. Now, the federal law states that any child that is under the age of 26 is eligible to stay on your group medical benefits. In Ohio, that number is actually 28 were your employee or your dependent child can stay on your benefits. They need not be employed. They need not be claimed as the dependent. They need not be a fulltime student. Now, all they need to be is 26 federally and they do not have access to their own coverage and 28 in Ohio and they can get on your plan. Usually they can reenroll in your plan during the open enrolment period. If for some reason, they are in fact aging out of those provisions because they are older than 26 nationally or older than 28 in Ohio, they would not have an eligibility requirement or an eligibility opportunity to COBRA. COBRA imposes different notes requirements on participants and beneficiaries depending on the particular qualifying event that triggers the COBRA rate. So, if you have a dependent child of that nature may be a proactive call at the HR Department to get the proper notice and documentation and notification would be prudent.

8:00 Matthew Byrne

When it says -- When you are losing your job, they have to send you that paperwork within a certain timeline. When you're divorced or legally separated, the primary applicant orders the primary -- insured, your spouse would need to notify or trigger that and the dependent there is different things that trigger that notice. So, letting the HR Department know that your intent is prior the first, that's practice and moving forward to making sure that the dependent gets covered but they can stay on your plan all the day up to 28, and in fact they can be living in a different state, married, employed, and that if they do not have access to health benefits through their employer or through their wife's employer, they would be eligible to get on your plan during the open enrolment period. The spouse of your dependent would need to get their coverage either through their parents or through another means. One little copy of it -if your employer terminates their health coverage, if they eliminate their health insurance, they completely either decide not to offer benefits at all; you do not have a COBRA right at that point. Your ability to get COBRA and really everyone in the organizations ability to get COBRA goes away. If your employer goes out of business that also is a situation were they probably would not have a health plan and therefore you would not be eligible for COBRA. COBRA does not -- unlike the federal statutes such as the FMLA which is the Family and Medical Leave Act it is not required the employer to pay for the cost of continuation of coverage, instead it allows the employees and the dependants maintain coverage at their own expense by paying a full cost of the premium, the employer previously paid, plus up to 2% administrative charge, so that is where we get to 102%. So, what you might want to look at and what we recommend for a lot of our client's is looking at may be alternatives to COBRA.

10:00 Matthew Byrne

So when we say Death to COBRA in our title, what we're really saying is there are alternatives to COBRA and you should strongly and aggressively explore them. Again, my name is Matthew Byrne. My company is MyHealthQuoter.com. You can shop for 250 different health plans for 10 different insurance companies and get different offers and different bids and you can sort the information based on deductible and carrier, and what your co-pay - what co-pay you want, if any. It is kind of great resource to really calibrate what you might be able to find insurance for, any individual or family market. If you would like to call in and participate on today's show, you can call 818-668-5442 or just visit our website at MyHealthQuoter.com and you can shop for plans and it will provide instant access to all the quotes and rates. You don't need to talk to anyone if you do not need to. Certainly, I am always here to answer any questions that you might have and feel free to call me. Nothing -- this is my favorite part of my job is when people call me and ask one question and needs some help, you can reach me directly at 866 577 3620. Again, I am Matthew Byrne and today's show is Death to COBRA. Our weekly BlogTalkRadio show is Navigating Health Insurance. We invite you to join. We try to do this every Tuesday at 11:00 a.m. and cover a host of topics from employer--sponsored plans and how to bid and shop your group health plan. If you are a decision maker in an HR Department, we can certainly help lower your cost, or if you know someone in your company who might benefit from those services, you certainly have them reach out to me. Some of the topics include health reform and underwriting and how your medical history affects your rates and things to that nature, so we invite you to kind of stop in frequently. You can also reach and watch our hard copies of this by visiting the blogtalkradio.com.

12:00 Matthew Byrne

Just search for Navigating Health Insurance or some of the topics you have seen listed here. So, when you go shop for your own insurance policy, what you want to do is you want to look at -- there are three things I want you to really focus on. Is it affordable, now we just determine COBRA is not affordable and we we're starting to understand why that is? Is the policy that you are going consider is portable? Can you take it from job to job? Can you take it from state to state? Can you take it from county to county? Okay. That is very important that the coverage that you buy is portable. And then is your coverage permanent? Is the coverage that you are seeking permanent? Does it have an expiration date? Employer-sponsored health plan and group health insurance, the insurance you buy from work is not permanent, it's temporary. It is contingent upon your job or the number of hours that you work or both. So when that relationship sours or no longer is optimal or you have a reduction in hours, your ability to maintain that coverage is fleeting. At absolute best, you paid the COBRA rate that we have already determined is unacceptably high, for a maximum of 18 months in most cases. That is the best that has an 18 months onset on it. So permanency, the plan that you get is huge because your medical condition may be such -- its pretty easy for you to get an insurance but in six months if you have a bump on a road or change or somebody is battling through certain issues or certain medical conditions, not being reliant on a policy that might go is -- if there is a reduction in force or if the winds changed in your corporation or -- getting your own health insurance is really kind of smart and really kind of a step in the right direction that we highly encourage and recommend. So what are some of the ways that you can do that -- I've got a graphic here and if you are interested in it just email me at matt@MyHealthQuoter.com and I will email you a copy of this presentation.

14:00 Matthew Byrne

But the graphic basically is a wheel and has various different portals or ways that you can get and access and maintain a health insurance. Most of this existed long before health reform, right now, obviously employers sponsored health plan, and they are guaranteed issue. They cannot say no for medical reasons, the minute they say your hired, I do not care if you are and end-stage renal failure or in recovery from a major surgery or pregnant, a group health plan, the minute they say your hired and you have gone through their waiting period, your eligible for coverage. Typically, for employers under a 100 and certainly under 50, if you are working more than 25 hours, you would be eligible for the plans. Larger groups cannot change those eligibility requirements. But group health insurances guarantee issue means they cannot say no and you would have immediate access to that once the waiting period have been served. I think the longest waiting period by law are 90 days. Usually it is 30 days. The individual market -- that product is medically underwritten and that means is that the insurance company is going to review and look at your medical history and kind of make sure that you fit their profile for risk, 92% of the people I worked with got approved for an individual health policy, 8% are declined, but you might think of the 8% is very obvious, its things like HIV and type I diabetes and cancer and that is true. Those are tough spots for sure, but it is not always as intuitive and obvious as it might seem. I have gotten people approved in the individual market with lung cancer, cervical cancer, breast cancer, how severe that was and how long ago it was would determine whether or not we can get you a coverage immediately, but do not always jump to the conclusion that either the individual markets going to exclude me, you'd be surprise that there are some of the things we can do. Things like depression, anxiety, cholesterol, high blood pressure, those are really easy to insure.

16:00 Matthew Byrne

Not a big deal at all. Most of the little nicks and bruises, GERD, gastric reflux, ADD, those types of things are quite easy to insure. Yeah, there might be a slight medical underwriting burden. You might pay $10 or $20 more a month because of your medical history or if it is a severe medical history, may be as much as $100 more a month, but the individual market can really accommodate about 92%. And one of the big revelations is that individual health insurance is cheaper than group health insurance and cheaper than COBRA. Wow! I mean to say that's a counter intuitive. How is that possible? How can a group health insurance policy cost more? You think the buying power of a large group would allow them to buy insurance at very BDT discounts. And it is certainly a string driving economic force. Buying power what we call economies of scale. Your employer-sponsored health plan has significant buying power and that is certainly is true and that helps them to keep the rates lower. However, there is a most powerful factor at play in the health insurance world and that is risk management. Since the individual market can exclude 8% of the worse risk and the group health insurance market has to take all risks no matter how severe -- the individual health insurance market ended being a lot cheaper because they can exclude that severe risk. Now, in the individual market once you're in, they can never take your policy away. Rescissions were almost unheard of pre-health reform. Some health reform provisions make it even more difficult to take away a policy. You have to be proven of committing fraud and not just an omission or a white lie, I mean trying to bilk and steal money for the insurance company would need to be prove and that is a very, very, very hard to do. Almost unheard of prior to health reform and now, it is not even really.

18:00 Matthew Byrne

A conversation we're having. So the point is that your individual health policy is permanent no matter how sick you get. I don't care if you have a $1 million worth of claim or $5 millions worth of claims or $20 million worth of claims, they're going to keep paying it. Now, you do have a deductible each year, you're going to have satisfy that but that's a true group plan and an individual plan. But the individual market keeps that health risks very pristine. They're screening all the new candidates to the risk pool and when you keep out, the known risk, the chronic risk, the risk that you know is going to be very costly. The price of that product is very, very affordable. Usually, you can expect 30% to 50% cheaper health insurance in the individual market. It is the same health insurance as the group market. It is still at United Healthcare and Anthem Blue Cross and Blue Shield and Kaiser Permanente and reputable companies like that. It has copays and deductibles and great doctor network. It's really for all attempts and purposes it's as good or in some cases even to appear through group health coverage. And it said 30% to 50% cheaper than your group health coverage because it is medically underwritten. We talked about COBRA, obviously if you are on the group health market and you depart ways, if you're ineligible for the individual market and you can't get individual coverage, then you certainly have that COBRA offer as a fall back position. Anyone who could get individual will. The economics of COBRA are such that no one is going to pay $1100 or $1200 for the COBRA bill when they can get the same thing for $500 or $600 in the individual market. So I encouraged you to visit our website at MyHealthQuoter.com. The cost of insurance there -- there is no mark of how much you pay for insurance as regulated by your department of insurance at this state level and the carriers file those planned design and those rates based on the different underwriting guides. I look at this, with this like 10 underwriting risk buckets. Okay.

20:00 Matthew Byrne

And whether you found risk buckets, three or seven it's kind of black and white in all front and the purposes. Now different carriers who have different new ones and have different interpretations and you're working with your broker to make sure that you are getting placed in the right carrier for your risk and a right carrier for your family is really important. But the truth is, is that once you picked a plan and your medical underwriting is very well understood, the amount that you're going to pay for that plan is kind of fixed and filed at the department of insurance. So, whether you use a broker to help you and guide you and find you that sweet spot in the underwriting and that optimal plan that is going do what your family needed to do, or you go online and go direct to the insurance company. The amount that you are going to pay is going to be the same. Now, a good broker is someone who kinda knows what is going on. It is critical because they are going to help you stay, "Oh, you know, this carrier likes mood disorders" or "these carriers really good if you have musculoskeletal issues" or "this carrier will take certain cancer risks if you had a certain time away from the illness." And so this one might favor smokers or this one might favor height and weight or obesity issues. So, most carriers will take most of the things that discussed, but some of them are erratically different pricing, so knowing which carriers going to be most sympathetic through medical, underwriting is a key part of the process. So, there are some other places where you can find coverage is a HIPPA conversion and open enrolment plans. These plans, feeling cost a lot like COBRA but if you have no gap and coverage of 63 days, the conversion plans will honor all your pre-existing conditions and you can have immediate coverage there after your COBRA has ran out. That is typically what you do there if your COBRA gets exhausted you can go for a conversion plan and I can guide or coach you on that if you are in that situation.

22:00 Matthew Byrne

63 days I want to kind of really beat this one, this drawn very loudly. 63 days is critical. If you have a gap and coverage of 63 days, the next carrier who takes you, whether be individual or group of one of this guarantee issue open enrollment products, if you have a gap of more than 63 days, they will exclude your pre-existing conditions. So if you say out, "hey, I've got a job. I'm not going to take COBRA. I'm going to spend an extra 90 days or six months filling new employment and I'll jump from my health insurance then and I'll just 'self-insure' until then", well that is kind of flawed strategy because of two reasons. One, either the person call me with kidney stones and that was a 20,000 worth of claim, if you get do an accident and you have some sort of cardiac event, you could be looking at tens of thousands of dollars. You couldn't self-insure that. The friend of mine had a premature baby and he said he stop counting the bills of a million dollars because it was three months premature. So there are a lot of medical situations that we couldn't possibly carry the burden and that's one downside of the strategy. The other is that if you have a gap of 63 days even your next group health plan will say, yes they have to take you after the waiting period. You are going to take you as you are but they can exclude your preexisting conditions for up to a year. Same thing with individual, if you wait 90 days and just kind of circle your wagons before you go by an individual policy, if you have the gap the 63 days in the individual policy can exclude your pre-existing for up to one year. So both group and individual do that the same. They have to cover all pre-existing, if the gap is less than 63 days they do not have cover the pre-existing, they can exclude it for a year, both in group or individual if the gap is greater than 63 days. That's a really big deal and keep your eye on that and certainly -- reach out to your broker well in advance of you getting in that moment because the underwriting process and putting a plan and place what it can take between two and four weeks.

24:00 Matthew Byrne

There are certain products where I can get you covered as quickly as midnight tonight, you just might not get an answer on that for a week or 10 days, but your cover to be retroactive from midnight to night, but that is the key thing. If you've gone without coverage for six months and you know somebody who has some major medical conditions and they've gone without coverage for six months, there are pre-existing condition health plans as the federal health reform from the Obama administration that creates a sanctuary for those people. You have to be with our coverage for six months and be declined by two different carriers for you medical condition, and that unlocks of a pretty nice plan at a very affordable rate. If you know someone on those that situation -- children under 19 in the individual and group market are guaranteed issue, so you can't say no to a kid under 19. However, kids under 19 cannot buy their own individual medical product. They have to be with their parents or guardian to get an individual policy. So that is basically the different ways, group health insurance guarantee issue, individual health insurance, medically underwritten but once they say yes, they have to take your words and all and they have to honor all pre-existing conditions if they say yes assuming your gap has been less than 63 days in both cases. Then you've got COBRA, we've discussed that and it is not affordable and not permanent. They have an expiration date, so the sooner you could get off that the better. And the other thing is this employer sponsored coverage. You know, a lot of times we have small business or one man shows who -- the spouse might provide some bookkeeping services or been kind of passively doing a little marketing and if we formalized that relationship and get two or more full-time employees in the organization and that would be employees working over 25 hours and they're going to show up on the wage and tax and a full achievement Federal Tax ID number and we have to have all of our process release papers and docs in a row. But if we can document that, we can do an employer sponsored and group health plan with as little as two people.

26:00 Matthew Byrne

There are even some group products that have to take up to one person. They still underwrite which means they can say yes and no but they are a little bit more liberal in their underwriting. A little bit __26:11__. A little bit more risks. So, that certainly areas and things that we can consider. Again, my name is Matthew Byrne. Our Blog Talk Radio show is called Navigating Health Insurance. Today's episode is called Death to COBRA. If you know somebody on COBRA, if you're thinking about making a career change, if you're a small business owner and you're talking about may be eliminating your employer sponsored health plan or you're in a situation where your health insurance premium is keep rising, call us we can help. We can provide you different strategies and different ideas to kind of help abate that. With our client on the individual and family and group markets, we shop a 100% of all policies every year 100% of the time. We never leave you in a policy for multiple years in a row if we can help it. Yeah, sometimes that shopping isn't the better offer and that's okay. But at least we know we did our homework and at least we know what we know and why the price is the same. But a lot of times you'll find it just looking at a new carrier if you had been one in for a year or two or three, a lot of times the new market rates, the new business rates will be more attractive than the existing renewal rates that you've just received. Also changing your plan design, whether it be the group level or the individual level. Higher deductibles, higher copays. May be you have a dependent who is on your group health plan and that if you can pull it off you go from a family classification which is very expensive to a couple employee or husband and wife which is a cheaper configuration. So if we can pull that and we are dependents, we might be able to get examine the individual policy there would be a lot more affordable for you and your family. If you are an employer, that is also a strategy kind of doing independent audit are all the dependents eligible?

28:01 Matthew Byrne

Are the once who are eligible, would they be better serve by having their own policy that might be cheaper anyway in the individual and family market. This is our website, www.MyHealthQuoter.com. You can email me at matt@MyHealthQuoter.com or call my anytime at (866) 577-3620. I love talking to people. I love helping people and educating. So if you want to call and just kind of touch base, that is the favorite part of my job and the thing I enjoy the most. So don't hesitate, don't feel like it will be intruding, I would love to have you. So, again bookmark this page Blog Talk Radio Navigating Health Insurance. I love you to check back on a weekly basis. We do this every Tuesday at 11:00 a.m., but we are also creating a nice wall archive of past topics, so browse through those and certainly watch and forward this link to a friend or someone that might be on this situation. On the outro here, I'm going to go ahead and just replay a promo. It gives you a little bit more insight about our individual and family health insurance at MyHealthQuoter.com and again thank you so much and my name is Matt Byrne. Happy Holidays and Happy New Year.

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