Government laws are complicated and can be difficult to navigate, especially if your multiple sclerosis (MS) leaves you functioning at less than 100 percent. It’s often confusing to know what is covered by what and what is supposed to happen when.
The following scenarios provide a few examples to help you get your head around the logistics of the Consolidated Omnibus Reconciliation Act (COBRA) and the Health Insurance Portability and Accountability Act (HIPAA):
George was diagnosed with MS while working for the ABC Corp. and was insured by ABC’s group health plan. After three years at ABC, he took a job with XYZ International and enrolled in their group health plan. George was uninsured for nine days between the end of his ABC coverage and the start of his XYZ coverage.
For any new employee that has been uninsured for 63 or more days, XYZ’s plan excludes coverage for preexisting conditions for the first 12 months of the employee’s coverage. Because George was uninsured for only nine days, however, all of his care costs were covered as soon as his new plan went into effect.
Annette, who has MS, was covered by her husband Greg’s group health plan for the 10 months he worked for DEF Corp. At 10 months, he was laid off. They didn’t elect COBRA because they couldn’t afford the premiums. Within a month, Greg got a new job at HIJ Co. and immediately signed up for the health plan they offered him and his family.
Unfortunately, Annette’s MS qualified as a preexisting condition, and HIJ’s plan had a 12-month preexisting condition exclusion period. But, HIPAA enabled Greg to apply the 10 months of Annette’s prior coverage from DEF to the 12-month exclusion period so that they only had to absorb the uncovered costs for anything specifically related to her MS for 2 months.
Janet, a person with MS, lost her job and health benefits when her employer downsized. She didn’t elect COBRA because of the expense. Janet found another job three months later. Because more than 63 days had elapsed between the two jobs, Janet didn’t get any credit for her prior coverage and she had no insurance for MS-related healthcare expenses for a full year. But, other, non-MS-related costs were covered.
If Annette or Janet had elected COBRA, they would have remained covered until their new group coverage took over. When you have an expensive health condition, it’s worth your while to invest in COBRA in order to stay covered until you have a new policy, even if you have to borrow the money to do it.