Redundancy and its Effect on Health Insurance

Each day that passes we feel the recession more. We see more friends being laid off and even more being short-listed for “voluntary retrenchment”. Research by the government has indicated that some 2 million workers have already lost their jobs in the light of the previous credit crunch and the recession fall-out. The government estimates that another 4 million workers will lose their jobs before the economy makes a turn for the better. In view of these terrible stats, it’s only normal for people to get anxious about their future.

The first thing that people worry about when they lose their jobs is the loss of an income stream. For most employees this is the only income stream they have and as such they have to live on their savings. Another important thing that they worry about is the loss of health insurance coverage. Most employees are think that they will immediately lose their job based health insurance should they be fired but this simply isn’t the case anymore.

There is a legislation called the COBRA law which for all intents and purposes was a law that was passed to ensure that employees would not go without their health coverage even if they were fired or retrenched. COBRA stands for Consolidated Omnibus Budget Reconciliation Act. The law states that assuming you are employed full-time by your employer and are back by employment papers that any health insurance coverage that you had when you were employed can be brought over to a private contract that you can continue paying for.

For most people, this would seem like a very good thing. After all, if you are laid off this will grant you a bit more time to go search around for new jobs and spare you from the worry of the health insurance needs of your family right? On the surface it seems like a good thing, this however normally dissipates when you realize the amount of money that you have to pay just to keep this COBRA enabled health insurance going. In almost all cases, the COBRA enabled health insurance is always more expensive than a similar health insurance quote provided by an outside provider. It is not uncommon to hear that ex employees have to pay up to 2-3 times what they are used to just to maintain their current health insurance policy coverage.

With the inflated costs of COBRA enabled health insurance, it is not a matter if you want to get another health insurance quote but most times it is actually a necessity for long get survival. There are however an extra ordinary number of people that simply choose to persist with their COBRA enabled health insurance as if they were afraid that if they got a quote from another health insurance provider that their current policy will expire or something. It is vitally important to realize that you have absolutely free choice when it comes to which health insurance you want to use. It is your responsibility to find one that is affordable yet offers the right coverage for you.

If you think you are getting ripped-off by your COBRA enabled health insurance then it really is up to you to go get another health insurance quote from another private vendor. It is however important to firstly understand what kind of coverage you are getting with your old health insurance policy. More often than not you will be notice that your job provided insurance is overly comprehensive. If you want to get and idea of the price differences between your COBRA health insurance and you new quote then you have to list down every coverage item that you had and mirror it with the new quote. That is the only way you can get a good indication of how much the new policy will cost you.

Job related health insurance is generally always a very comprehensive health insurance policy. This is because of the many employees that they have and the one policy has to cover the needs of most of their employees together. It can’t be customized for the individual person or family. It is because of this that you must pick apart your COBRA enabled health insurance if you are intent on keeping it. There will be many coverage items that don’t apply to you and can be taken off the policy. A good example of this would be how a 55 year old woman would more than likely not need any coverage that centers on pregnancy or how a healthy 23 year old man would not need disability coverage.

There is no point in stressing over the availability of health insurance when you are at risk of being laid-off. More important should be you looking for another job to replace the one that you might lose. Health insurance will be there however it is up to you to either continue using the current one as provided by your employer or seek out other health insurance quotes from other providers.

Tagged with: finance • Health Insurance • Health Insurance Quote • Insurance

Filed under: Health Insurance

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