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Path of least resistance: Don’t get lost in the health insurance labyrinth
Health Insurance Is Mandatory…but How Do You Get It?
The Affordable Care Act, more commonly referred to as Obamacare, was a landmark legislation in many ways. It obliterated exclusion of preexisting conditions in health insurance and it specified the minimal level of medical services to be covered. It also mandated universal health coverage, meaning that everyone must have a health insurance plan.
The new tax bill—the Tax Cuts and Jobs Act, which was signed into law this year—repeals the individual mandate for 2019, but that does not apply to Massachusetts residents. Long before Obamacare was even in the making, the Commonwealth in 2006 passed a law requiring mandatory coverage for residents aged 18 and older. A penalty is applied through tax returns if a person fails to comply.
The majority of people in Massachusetts receive coverage through their employer or through public programs, such as Medicare or MassHealth, the state’s Medicaid program. But if you lose your job or are ineligible for public assistance, where do you obtain insurance?
According to the Massachusetts Health Insurance Survey, early estimates indicate that in 2017, the uninsured rate in Massachusetts was 3.7 percent, compared to an 8.8 percent uninsured rate for the rest of the nation.
COBRA and Mini-COBRA
COBRA is an acronym for Consolidated Omnibus Budget Reconciliation Act, a federal law that gives workers and their families the right to continue group health insurance benefits for a specified period of time after termination of employment. If terminated for gross misconduct, however, such as illegal drug use at work or stealing, COBRA benefits may not be offered.
Generally, coverage for the employee and eligible dependents continues for 18 months. Extended coverage up to 36 months is available for dependents under certain circumstances, such as divorce or death of the covered employee.
COBRA applies to companies with 20 or more employees, but smaller companies are not exempt. Massachusetts offers Mini-COBRA to employers with two to 19 workers. The same benefits apply.
Both plans are good fallbacks. You can continue the coverage you had as an employee, but it comes with a price—literally. As an employee you generally pay no more than 50 percent of the premium cost. So a plush $900-per-month plan may be manageable at a monthly cost of $450. On COBRA, however, you are responsible for the entire $900, which may be prohibitive. In addition, employers can add two percent for management fees.
Other Options and Special Enrollment Period
If COBRA is not a feasible option, you have 60 days from your last day of insurance coverage to choose another plan. That 60 days is called the Special Enrollment Period, but it applies to more than just loss of insurance due to a change in employment status. This is a period of time during which individuals and families can buy health insurance, provided certain life changes pertain to them.
Three Main Categories of Life Changes:
- Loss of health insurance due to change in employment or loss of eligibility under a parent’s plan, for example
- Changes in household, such as marriage, divorce, or having or adopting a baby
- Change in residence, for instance, moving to a new zip code or county. This is common for students or seasonal workers.
If individuals fail to enroll in a plan during the 60 days, for the most part, they are required to wait for the Open Enrollment Period, which runs from Nov. 1–Dec.15, 2018, for coverage that begins in January 2019.
It may be possible to request an open enrollment waiver. More information is available at the Office of Patient Protection.
Insurance Is Out There…but Where?
Thirteen companies are licensed to write health insurance in Massachusetts. There’s a catch, though: Most allow direct contracting only to companies, and some contract only with companies of a minimum size. That means individuals and families cannot directly access their services.
All is not lost, though. The insurance companies are aligned with preferred partners that serve as their intermediaries. These partners offer individuals/families and small businesses a wide range of insurance plans from most major insurance carriers in the state. They allow you to compare plans, enroll and even pay online.
The preferred partners are:
