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Insurance Basics 101: Group Insurance, COBRA, and Short Term Major Medical

In our last article, we discussed the differences between Individual Health insurance policies. Today, we tackle Group Insurance and your options during and after employment (should you lose your job).

If you are gainfully employed by a company that offers group insurance, you are most likely getting the best insurance available on the market. However, if you lose your employment, you still have some great options available. Here's how it works:

Group Health Insurance

  • Is offered through a person's work.

  • Is usually subsidized by the employer, making premiums lower for the employee (and occasionally for the employee's family).

  • Most often are PPO policies with the best doctor networks.

  • Hospitals usually accept group health insurance but are more restrictive with individual health policies.

  • The employer reserves the right to change the health insurance plan and insuring company every year.

  • Is available only as long as you are employed. If you are terminated or quit your job, you must seek out your own individual insurance or group insurance through a new employer. There is also the COBRA option.

Group Insurance under COBRA

  • Stands for Consolidated Omnibus Budget Restriction Act, a piece of legislation that allows you to continue group coverage after termination from your job.

  • Is an alternative to purchasing Individual Health Insurance, at least for a while.

  • Allows you to continue your existing group insurance for between 8 and 36 months, depending on the size of company that you work for.

  • Is a short-term solution and cannot be continued indefinitely.

  • Features of the plans depend entirely on what plan you had when you were employed.

Short Term Major Medical

Short term major medical policies for individuals are another option if you lose your job, especially if you miss the enrollment deadline after a qualifying ACA event (like marriage, divorce, having a child, moving, etc.).

  • Is an alternative to COBRA if you lose your job during the Special Enrollment Period (Feb 1 – October 31).

  • May only be purchased for a period of time that is less than one year.

  • Is not subject to the same rules of ACA, is underwritten, and does NOT cover pre-existing conditions.

  • May also be used by those who have missed their enrollment deadline after a qualifying event (such as marriage, divorce, having a child, moving out of state, etc.).

  • Is usually a PPO-based plan with a large provider networks.

If you have a new job or have recently lost one, finding out about ALL of your options is the best way to protect yourself and your family. Contact us if you would like a review of your current policy or to discuss your future options.

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