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Health Insurance Information for a

Most people obtain health coverage through a health plan offered by their employer. However, state and federal law allows people who have recently become unemployed to continue their previous health coverage for some time. If these laws do not apply in your situation, several other options for coverage or low-cost health care services may be available.

The following steps can help you find health coverage if you´re unemployed:

1. If you previously belonged to an employer-sponsored health plan, and have been separated from the job for fewer than 60 days, you may be able to keep your health coverage
2. Locate other group coverage
3. Determine whether you qualify for Medicaid
4. Buy an individual policy from a private carrier
5. Apply for coverage through the Texas Health Insurance Risk Pool
6. Find low-cost health services in your area

1. If you previously belonged to an employer-sponsored health plan, and have been separated from the job for fewer than 60 days, you may be able to keep your health coverage.

The federal law called COBRA (Consolidated Omnibus Budget Reconciliation Act) and certain provisions of Texas law give workers the right to continue employer-sponsored health coverage for themselves and their families after a primary plan member´s separation from the job under some circumstances. Primary plan members can often extend their coverage for between six months and two years, and sometimes longer. Secondary plan members, including spouses, ex-spouses, and dependent children of the primary plan member, can often extend their coverage for between six months and three-and-a-half years.

Continuing a work-sponsored plan after leaving a job can be expensive, however. The employer is no longer required to contribute any amount toward premium costs, so you must pay the full price of coverage yourself. However, continuing a work-sponsored plan may still be more affordable than obtaining coverage through some other source.

Typically, primary plan members are eligible to continue their coverage if they leave their job for any reason other than gross misconduct. Employees who stay at a job, but lose coverage eligibility because of a reduction in the number of hours they work, are also usually able to elect to continue their coverage.

Federal COBRA regulations typically only apply to businesses that have had 20 or more full-time workers during the year prior to the primary plan member leaving the job. Therefore, if you work for a company with fewer than 20 full-time employees, you may not have any COBRA continuation rights. Texas law, however, includes a provision that requires employers to extend continuation rights for six months to all covered workers, except those fired for gross misconduct. The six-month Texas continuation period begins either immediately after separation for workers with no COBRA protection, or immediately after the end of the COBRA extension period for those to whom the federal law applies.

State and federal law requires that employers fully disclose any rights regarding continuation of coverage within 30 days of your separation from the job. You must generally decide whether you wish to exercise these rights within 60 days of notification. If you believe an employer has not properly notified you of your continuation rights, you should contact The Texas Department of Insurance (TDI).

It is important to note that you must have been a member of your employer´s plan before leaving the job to continue coverage. You cannot join an employer plan after you are no longer employed.

While you were employed, your employer may have contributed toward some or all of the cost of coverage. Any contribution will probably end when you are no longer employed, meaning that if you elect to continue plan membership, you will have to bear the full cost yourself. However, you will still be paying a group plan rate, which is generally lower than purchasing coverage individually.

Employers are prohibited by law from attempting to earn a profit from your continuation. An employer may add a surcharge of up to 2 percent of the base cost of plan membership to pay any added administrative costs for non-employee plan members. If the overall cost of the plan increases for members, you should expect your rate to also increase in line with this amount. However, beyond the 2 percent surcharge, you may never be required to pay more for continuation coverage than the cost for covering a regular employee.

COBRA generally allows primary plan members to continue coverage for up to 18 months after leaving the job, and secondary plan members for up to 36 months. The total amount of time a person may continue coverage after leaving a job therefore varies according to the following chart:

Additionally, if a primary plan member can demonstrate that he or she has a disability that meets the standards of the Social Security Administration, within 60 days of continuation of coverage under COBRA, he or she can extend the period of coverage for an additional 11 months. This means a person with a disability who exercises COBRA may be covered for a total of 35 months under state and federal law (18 months standard COBRA period + 11 months COBRA disability extension + six months Texas extension period).

The following resources can assist you with continuation of employer sponsored health care coverage:

• US Department of Labor COBRA Page
• US DOL Frequently Asked Questions about COBRA

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2. Locate other group coverage

If employer-sponsored group coverage isn´t an option, you may be able to find other group coverage. Trade unions, religious institutions, professional associations, and fraternal organizations sometimes offer health coverage as a membership benefit.

Group health plans offered by entities other than employers typically provide coverage that is narrower in scope. They typically cover fewer conditions and have higher deductibles than employer-sponsored plans. It is also less likely that a non-employer group sponsoring a plan will contribute to the cost of coverage. This means you´ll have to pay the entire premium yourself. Non-employer group plans are usually more expensive than employer-sponsored plans, although they are still often less expensive than an individual policy, particularly if you have existing health problems.

Groups must make their health plans available on equal terms to all members. However, a plan might only be offered to members who have belonged for a certain period of time or have achieved a certain rank within the group. Health risk factors may not be used to determine eligibility for plan membership. Therefore, group coverage may be a good option if you have a pre-existing health condition. Be aware, however, that you may have to wait a certain period of time before pre-existing conditions are covered.

Group members who do not join a plan within 30 days of the time they first become eligible will typically have to wait until the plan´s annual 30-day open enrollment period in order to join.

Before joining a non-employer group plan, you should ask other participating members in the group about their experience with the coverage. Most plans are reputable, although fraud schemes have been known to operate under the pretense of offering coverage through a non-employer group. Such an operation will likely collect your premium but disappear if you have a claim. It is illegal in Texas to form a group for the sole purpose of providing health coverage. Also, a group cannot legally require you to join a health plan as a condition of membership.

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3. Determine whether you qualify for Medicaid

The Health and Human Services Commission (HHSC) determines Medicaid eligibility in Texas. People who receive Temporary Assistance for Needy Families (TANF), also commonly known as welfare, automatically qualify for Medicaid. Other people also may qualify based on their income and resources, including:

• Families that have high medical bills they can´t pay
• Families and individuals that leave TANF for work or whose time limits have expired
• Low-income children under age 19 and pregnant women
• Youths aging out of foster care

Different eligibility requirements apply to each group. In order to find out if you qualify, you need contact your local HHSC Eligibility Office.

• Call 2-1-1, the national abbreviated dialing code for access to health and human services information, to reach a Health and Human Services representative who can determine whether you qualify for Medicaid.
• Go online to the State of Texas Assistance Referral System (STARS) for an interactive map to help you locate a Medicaid assistance office in your area.

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4. Buy an individual policy from a private carrier

If you´re unable to obtain a group policy and exceed the income requirements for Medicaid, you may be able to buy individual coverage directly from a Texas-licensed health carrier. View a list of carriers offering individual plans on TDI´s website.

Individual policies can be expensive, and carriers will evaluate an applicant´s health risk factors before making a decision to issue coverage. That means that if you have a serious medical condition, or are predisposed toward a certain condition, a carrier may decline to issue coverage. However, if a carrier declines to cover you, keep shopping. Each carrier has different criteria for accepting customers.

Individual coverage may be purchased as either an indemnity or managed care plan. Indemnity plans are sold exclusively by insurance companies, and will generally cover services from any licensed health provider as long as treatment is consistent with the terms of the policy. Managed care plans can be sold by both insurance companies and HMOs.

Typically, managed care plans are more affordable than indemnity plans, but indemnity plans provide members with the most flexibility in obtaining health services. The trade off is essentially choice versus cost.

Both carriers and agents must hold a valid Texas insurance license to legally sell insurance in the state. Before purchasing any individual health plan, it is important to verify that the carrier and agent are licensed. Verifying that the carrier is licensed protects you against fraud. In addition, a state guaranty association will pay some or all of the claims of a licensed carrier should it become insolvent. If you buy from an unlicensed entity, you may have to pay the costs of any claims yourself. For many health care services, this cost could be significant.

To verify an agent and company´s licensing status, use the Agent Look-Up feature or view the company profiles on our website.

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5. Apply for coverage through the Texas Health Insurance Risk Pool

If you are unable to obtain coverage through any other source, you can apply to join the Texas Health Insurance Risk Pool (Health Pool). The Health Pool is a program primarily intended for Texans who are unable to obtain insurance from licensed private insurers because of their health condition.

Health Pool coverage is similar to that included in employer-sponsored or private insurance plans. Benefits cover hospital stays, physician services, and prescription drugs. The Health Pool also provides coverage for serious mental illness, subject to calendar year maximums for inpatient and outpatient treatment. The Health Pool does not cover treatment for chemical dependency or drug abuse.

Coverage through the Health Pool can be expensive - premiums are twice the rate charged in the standard market, as required by state law.

To qualify for Health Pool coverage, you must be one of the following:

• a federally defined eligible individual (HIPAA)
• rejected for substantially similar individual coverage for health reasons
• unable to find substantially similar individual coverage, except with riders that exclude coverage for medical conditions.
• a dependent of an adult covered by the Health Pool
• certified by an agent as unable because of a medical condition to obtain substantially similar individual coverage from a licensed insurance company or HMO that the agent represents
• diagnosed with a medical condition that automatically qualifies a person for coverage from the Health Pool.

If you are still eligible to continue an employer-sponsored health plan after separation from a job under the terms of federal COBRA regulations, you may be eligible for the Health Pool, but with a pre-existing condition waiting period.

The Health Pool website provides more information.

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6. Find low-cost health services in your area

If you are unable to obtain any health coverage, certain federal, state and county health services programs may be able to help.

Federally Qualified Health Centers (FQHCs) are designated by the federal Bureau of Primary Health Care (BPHC) to provide comprehensive primary health, oral, and mental health/substance abuse services to all individuals regardless of their ability to pay. FQHCs charge for services based on a person´s income as a percentage of Federal Poverty Index Guidelines.

• The BPHC Provider Locator can help you find the low cost provider in your area for your specific health care need.

Community Health Services are other provider groups, often affiliated with city or county assistance programs, that strive to meet the health care needs of the uninsured and underinsured.

• The Texas Association of Community Health Centers (TACHC) offers a search tool to find low cost providers in your area.
• Unite For Sight is a nonprofit group that specializes in helping Americans obtain free or low cost vision care services. The group also maintains a comprehensive directory of free clinics that provide health services of all types.

Prescription drug assistance is available from a variety of companies and organizations.

• Helpingpatients.org provides a comprehensive link to thousands of medicines offered through patient assistance programs, pharmaceutical companies, government programs, and other organizations.

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For more information contact: