Maintain Stability in the Midst of Change
Life can bring a flood of changes during your working years.
Career changes. Changes in priorities. Changes from work to
retirement. How can you make sure that your investments will
navigate through these periods of change?
Health Insurance, COBRA, and Other Options
Sometime during the past 50 years, it has almost become assumed
that having a job meant having health insurance. But what
happens if you are retired, out of work, or changing jobs? What
if your new employer does not offer health insurance? There are
a few options: 1. Go without health insurance for a period of
time 2. Purchase a short-term or long-term individual health
insurance supplemental plan 3. Purchase COBRA insurance 4. Join
a consumer-driven discount medical plan
Option 1: Go without. Naturally, the problem with this option is
that an event could occur during that time that would require
serious medical insurance, or could make you uninsurable for
future insurance. While this is certainly the lowest cost if
something bad does not happen, the risk involved is very high.
Option 2: Individual Policy. This option is preferred by people
who expect a long period of unemployment, are retiring, change
employers frequently, or are in an industry where health
insurance benefits are not normally offered to employees. The
advantage to this option is that you will know exactly what your
health insurance benefits are and what they cost. The
disadvantage is that the premiums are usually somewhat higher.
Option 3: Purchase COBRA. In layman's terms, COBRA coverage is
an extension of your employer-sponsored plan that you pay for
once you leave the job for any reason.
COBRA was passed in to law in 1986 by the US Congress and the
law generally covers group health plans maintained by employers
with 20 or more employees in the prior year. It applies to plans
in the private sector and those sponsored by state and local
governments.{2} The law does not, however, apply to plans
sponsored by the Federal government and certain church- related
organizations. Check with your employer to learn if you have the
option to use COBRA coverage.
Option 4: Join a Consumer Plan. These groups are not insurance,
but they do provide the bargaining power of dramatically
reducing the cost of medical expenses by "pre-negotiating" a
rate. Medical providers like the plan because there is no
paperwork and the user usually pays in cash so the overhead is
low. These programs can greatly reduce the cost of insurance and
work with non-covered events.
About the author:
Paul D. McDonald, MBA is a financial professional specializing
in working with seniors and business owners. He assists people
in making decisions on retirement planning, investing,
insurance, budgeting, debt management, and many other critical
financial decisions. Paul welcomes calls on the subject at the
toll-free number 1-877-711-1264 or you can visit his website at
http://boomerfinances.blogspot.com/.
