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Due to the challenge associated with obtaining health care during bouts of unemployment, the federal government decided in 1986 that there was a need to provide protection to these unemployed people. As a result, COBRA (or the Consolidated Omnibus Budget Reconciliation Act) was passed. As long as the unemployment was not due to \’gross misconduct\’, this law allows people who voluntarily resign, are laid off or terminated the right to extend their health insurance coverage for up to a year and a half at their expense.

In order to qualify for COBRA health insurance coverage, there are a few conditions that need to be met. First of all, your former employer had to have a group plan that a minimum of 20 employees were enrolled in, including yourself. You had to be working for that employer and a member of that plan for at least six months, too. If you qualify, your spouse and dependents are also eligible for COBRA continuation of coverage benefits, even when you decide against this coverage for yourself. Depending on the specifics surrounding your unemployment, you can get up to 36 months of COBRA.

The cost associated with COBRA continuation of coverage benefits is high. You will be responsible for 102% of the cost of the insurance, which can eat up almost all of your unemployment amount. This cost includes administrative fees which make it so expensive. There options to help you afford this cost; you can get assistance under the American Recovery and Reinvestment Act of 2009. This program will allow you to recover up to 65% of the premiums, but only for a period of nine months.

If your COBRA subsidy is about to run out, you can consider getting an individual health insurance policy for yourself and other family members as a way to make COBRA coverage more affordable. When selecting a private policy, you can choose between an HMO and PPO health plan. HMO and PPO are common health insurance terms for the main types of managed health-care systems. A Health Maintenance Organization (HMO) plan requires you to get all your health care service from providers who are members of the HMO network. Under an HMO plan, you will need to select a primary care physician who will be your main health services provider and will refer you to other specialists in the HMO network as needed. A Preferred Provider Organization (PPO) on the other hand, does not require you to get your care from health providers within the PPO network, but will penalize you if you choose to go outside the PPO network by paying for their services at a lower rate or not paying for them at all.

The decision between HMO vs PPO insurance is an easy one to make when you keep certain things in mind. Cost is not a good determining factor because it is similar in both plans. The PPO plan is a good choice for those who value freedom in choice; you can go to any doctor or specialist you want for your care as long as they are in the network. with a HMO plan, you have one specific doctor who acts as the gateway to all of your medical care, so when you have a particular individual you trust for all your concerns, this may be good for you.

Learn more about PPO vs HMO insurance. Stop by Kristaria Dawson\’s site where you can find out all about HMO and PPO health plan options.

This entry was posted on Friday, December 25th, 2009 at 1:44 pm and is filed under Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.