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If you are getting ready to leave a job and group health insurance plan, you may face a gap in coverage as you wait for your new plan to add you. If this happens, then you need to decide whether or not to purchase COBRA coverage or short-term health insurance to provide health insurance protection during the gap.

Short-Term Health Insurance

If you are a healthy individual with no pre-existing conditions and no need for routine preventative care during the time that you must have in-between coverage, then a short-term health insurance plan could be a good choice for you. Short-term plans provide benefits for treatment of unexpected illnesses or accidents that occur while you are in-between group or individual policies. They do not offer full-scale benefits, so you would not get coverage if you were visiting a primary care physician for a regular check up while under the plan. They will also generally exclude coverage for any treatment related to a pre-existing condition and they do not qualify as continued coverage under HIPAA.

COBRA

COBRA coverage can be expensive, but it offers some benefits that short-term health policies do not. COBRA is the continuation of your group plan for up to 18 months (36 months in certain instances). That means that when you have COBRA coverage you enjoy all the same benefits as you did when you were part of the group plan because technically, you still are. COBRA will cover any pre-existing conditions that had been covered while you worked and it will provide benefits for preventative and routine care. Also, if you are concerned about maintaining continuous coverage in compliance with HIPAA guidelines, then COBRA qualifies whereas a short-term plan will not.

It is important that you not just look at price when trying to decide between COBRA and short-term health policies. Instead, factor in your own health and medical treatment needs. If your history opens you or any of your dependents up to pre-existing condition exclusions, then the choice is even more important because if you have a break in coverage your new group health plan can refuse to cover your pre-existing conditions for up to 12 months. This means any ongoing medical visits and condition maintenance must be paid out-of-pocket during that time, so measure your decision with more than just your budget in mind.
Posted 3:47 PM  View Comments

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