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Temporary Health Insurance

Temporary health insurance, also referred to as short-term health insurance, provides temporary coverage for:

  • Individuals who lose their group health insurance because of job loss;
  • Those just starting a new job where health benefits have not yet commenced;
  • Or students who are no longer covered under their parents’ plan.

There are two options available to individuals and families, which include coverage through private insurers or through COBRA, a Federal program that allows laid off workers to continue to purchase health coverage at group rates from their employer-sponsored plans for a limited period.

Private Health Insurers

Temporary health insurance is not designed to be a replacement for standard health coverage. Instead, this form of coverage is meant to give people legitimate protection in the event of a major illness or injury.

Temporary health insurance has a limited term ranging from 30 – 360 days. Some plans will allow end-of-term renewal, while others will not extend coverage further or will require applying again —it depends on the plan and the insurer.

Limitations to temporary health insurance may include:
  • No coverage for any pre-existing injuries, illnesses or prescriptions
  • No coverage for pregnancy or prenatal care
  • No coverage for preventive care or even normal office visits
  • Limits on the types of illnesses and injuries covered

For eye care, dental care, or other elective coverage while using a short-term health insurance policy, supplemental health insurance policies are available.1 While these plans are not as comprehensive as a typical individual policy, they will usually provide adequate protection for:

  • Intensive care
  • Prescription drugs
  • Lab exams and x-rays
  • Hospital room and board
  • Inpatient and outpatient procedures
  • No limits on selection of physicians and hospitals2

COBRA

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law passed by Congress in 1986 that allows laid-off workers to continue to purchase the health coverage at group rates from their employer-sponsored plans for a defined period – typically 18 to 36 months – after they leave their employers.cobra_faq

COBRA participants pay the entire premium themselves without any employer co-pay. However, the cost is usually less expensive than individual health coverage.

COBRA eligibility is determined by three requirements:

  • Work for an employer with 20 or more employees. If you work for an employer with 2-19 employees, you may qualify for state continuation coverage.
  • Covered under the employer’s group health plan as an employee or as the spouse or dependent child of an employee.
  • Have a qualifying event that would cause you to lose your group health coverage.3

Qualifying events for COBRA are as follows:

For employees:

  • Voluntary or involuntary termination of employment for reasons other than gross misconduct
  • Reduction in numbers of hours worked

For spouses:

  • Loss of coverage by the employee because of one of the qualifying events listed above
  • Covered employee becomes eligible for Medicare
  • Divorce or legal separation of the covered employee
  • Death of the covered employee

For dependent children:

  • Loss of coverage because of any of the qualifying events listed for spouses
  • Loss dependent child status under the plan rules4

It is a requirement that the employer notify the employee of their COBRA rights when they join their company’s Group Health plan.

For complete COBRA information, visit the U.S. Department of Labor website and search/A to Z index: COBRA.

1U.S. Insurance Online, “Temporary Health Plans” http://www.usinsuranceonline.com/health-insurance/plans/temporary-health-insurance.php 2U.S. Insurance Online, “Short Term Health Insurance” http://www.usinsuranceonline.com/health-insurance/plans/short-term-health-insurance.php 3Georgetown University Health Policy Institute, "COBRA and State Continuation Coverage" http://healthinsuranceinfo.net/getinsured/connecticut/individual-health-plans/cobra-continuation-coverage/ 4Georgetown University Health Policy Institute, "COBRA and State Continuation Coverage" http://healthinsuranceinfo.net/getinsured/connecticut/individual-health-plans/cobra-continuation-coverage/

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