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Starting your very first job? Consider enrolling in your employer's
health care plan. If your employer offers more than one option-an
HMO plan, a preferred provider option, and a fee-for-service
plan, for example-compare each to your needs and preferences
before making a decision. Ask for a copy of the summary plan
description (SPD) to get details about covered benefits. Ask
what type of plan you have, how it works, and what eligibility
requirements you may have to meet. Know whether you will be expected
to pay a portion of your premium, how much it will be, and who
to talk to if you have questions.
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What if your health care coverage ends because you lose your
job, have your hours reduced, or get laid off? Knowing your rights
ahead of time can prevent these situations from meaning an end
to health care coverage. Under the Consolidated Omnibus Budget
Reconciliation Act (COBRA), you, your spouse and dependent children,
might be able to purchase extended health coverage for up to
18 months. In the case of individuals who qualify for Social
Security disability benefits, special rules may allow for extending
coverage an additional 11 months. Since your employer is not
required to pay a portion of your premium, you may pay the entire
amount, but the cost is usually less than if you obtained coverage
on your own. Also, contact your state government to find out
if you or your dependents are eligible for public health insurance,
like Medicaid or the new State Children's Health Insurance Programs,
or to get information on obtaining new coverage. Under the Health
Insurance Portability and Accountability Act (HIPAA), you may
also be eligible to enroll in your spouse's health plan under
a special enrollment period.
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Before switching, ask about the type of plan offered by the potential
employer, and compare it to your current plan. Ask about the
premium you'll pay under the new plan, whether you can continue
with the same doctors, or whether you will have to see new ones.
And know your rights under HIPAA, which protects you and your
dependents by limiting pre-existing condition exclusion periods.
COBRA may give you the opportunity to purchase temporary extended
health care benefits offered by your former employer while you
are looking for a new job, or during a waiting period for health
benefits imposed by your new employer.
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When you're thinking about retiring, be sure you understand the
documents governing your health care plan. Review your SPD, and
any documents you have received that would modify it. Also, request
copies of any formal written documents that outline how your
plan operates, and any other information on your employer's policies
on retiree health care benefits. Realize that although some employers
continue to provide health care benefits to their retired employees,
private sector employers are not required to provide retiree
health benefits. And remember, federal law does not prevent employers
from cutting or reducing health benefits under plans available
to participants and their families, unless there has been a specific
promise to continue them that can be legally enforced. So before
you retire, think about saving money to use for any coverage
gaps that may occur before you are eligible for Medicare.
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HIPAA -
Generally HIPAA limits pre-existing condition exclusions to a
maximum of 12 months (18 months for late enrollees). HIPAA also
requires this maximum period to be reduced by the length of time
you had prior "creditable coverage." You should receive
a certificate documenting your prior creditable coverage from
your old plan when coverage ends. HIPAA may also give you a right
to purchase individual coverage if you have no group coverage
available, and have exhausted COBRA or other continuation coverage.
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COBRA -
If you are covered under your employer's health plan and you
lose your job, have your hours reduced, or get laid off, and
your employer's health plan continues to exist, you and your
dependents may qualify to purchase temporary extended health
coverage under COBRA at group rates under the employer's plan.
Divorce, legal separation, loss of dependent child status, the
covered employee's death or entitlement to Medicare, may also
give your covered spouse and dependent children the right to
elect continued coverage under COBRA. Your plan must be notified
of these events. Generally, COBRA covers group health plans maintained
by employers with 20 or more employees. The group health plan
is required to provide you with a written notice indicating your
eligibility for COBRA coverage. If you are eligible, you will
have 60 days from the date the notice is sent or from the date
your coverage ends-whichever is later-to elect COBRA. If the
employer is too small to be subject to COBRA, state law may require
the plan's insurer to provide some continuation coverage.
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The Department of Labor's Employee Benefits Security Administration
(EBSA) administers several important health benefit laws
covering employer-provided health plans which govern your basic rights to
information on how your health plan works, how you qualify for benefits and
how to make claims for benefits. In addition, there are specific laws
protecting your right to health benefits when you lose coverage or change
jobs. EBSA also oversees recently enacted health care laws covering special
medical conditions.
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