Allen Health Insurance Agents Tells A Tale of Two Clients « Independent Income Advisors

Allen Health Insurance Agents Tells A Tale of Two Clients

Tuesday, July 12, 2016 @ 04:07 PM
Author: Peter Young

The insurance companies made a deal on Obamacare: we will cover pre-existing conditions if the law allows us to use the same sort of rules for individuals that we already use for group insurance, i.e., people will only be allowed to apply for health insurance during an open enrollment period. 

This principle has been the law of the land now for six years, but it still catches people by surprise.  An old friend and past client called me yesterday, absolutely outraged by an experience he had had trying to buy health insurance.  He had lost his job and his group insurance.  Normally his situation would fall into one of the exceptions to the above rule: people have 60 days after the end of their group insurance to sign up for Obamacare or COBRA.  He had missed the deadlines, so he called Blue Cross.  The rep on the phone told him – in a rather undiplomatic manner – that Blue Cross could not help him and suggested he call healthcare.gov, rather than explain he would not be able to buy insurance through healthcare.gov either!  So of course the call to healthcare.gov went badly and in desperation, he called me.

The answer for him was one of the short term medical plans that we discussed in this blog last month (June 13th, Allen Health Insurance Agent Discusses Short Term Medical Plans) that would provide him with a $1,000,000 major medical plan until he got another job with benefits or Open Enrollment came around.  If he needs the short term medical plan for three months or less he won’t be subject to the penalty.  Even if he has to stay on the plan for the rest of 2016, he will only have to pay part of the penalty since he did have group insurance for the first few months of the year.

The other client that called had signed up for COBRA but COBRA was fast running out.  He does fall into one of the exceptions to the open enrollment rule: he has up to 60 days after COBRA ends to buy other insurance.  He called me in plenty of time and was able to sign up for a plan that covered him from the time his COBRA expired – a much happier experience.

Be aware, however, that there is a COBRA catch for the unwary.  If you sign up for COBRA, you can’t change your mind and switch to an Obamacare plan.  You will have to stick with COBRA for the rest of the year or until it runs out, whichever happens first.

The open enrollment rule does work quite well but being aware of the deadlines will save you a lot of grief!

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