Bridging The Gap In Healthcare Costs

If you're between jobs, COBRA can provide affordablemedical coverage for you and your family. Here'swhat you former employer won't tell you.

The day you leave your job may be the day you assume a financial, burden that is too big to bear–health insurance coverage. Robin White Goode knows this all too well, having changed jobs twice in seven years. Last year, she left her copy editing job at a publishing company to work at home as a freelance editor and writer. She quickly found that her wish be closer to her four-year old Jamie and six-year-old David was going to put a big dent in the family finances.

To maintain health coverage for her entire family, including her husband Harley, an art instructor at a local university, Goode would have to somehow scrape together $500 a month. “As I looked into it, the situation looked prohibitive,” she recalls. Goode opted for COBRA (Consolidated Omnibus Budget Reconciliation Act). Federally mandated in 1985, COBRA allows ex-employees covered under their previous employer’s health plan.

Whether you’re fired, downsized or have left your job to set up your own firm, you might find that COBRA is just what you need to maintain uninterrupted health care coverage. On the other hand, staying on the company’s old plan may be ideal for many,but it doesn’t have to be the only option for health care coverage after you leave your job. With a little research and creativity, it’s even possible you may find a better alternative to COBRA.

Goode, for example, found something cheaper after being covered by COBRA for two months. After consulting with insurance salespeople, her doctor and even professional groups that she and her husband belonged to, Goode, who is in her late 30s, switched her own personal coverage to a plan offered by the Independent Business Alliance (800-450-2IBA). This plan provides products and services to small and home-based businesses for an annual membership fee of $49.

Goode got individual coverage at $205 a month, while her husband, who is in his mid-40s, moved to a plan offered by the Graphic Artists’ Guild at $180 a month. Finally, Goode signed her kids up for low-cost ($24 a month) childrens’ coverage offered in New York state under Empire Blue Cross/Blue Shield. She was able to lower her family’s costs from $500 to a total monthly outlay of $410. “We’re now saving $1,000 a year over what we would have been paying, and that’s no mean sum,” she stresses. Since then, Goode is now considering saving $40 a month by becoming a part of her husband’s plan the single plus one is often a good option for married couples.

Goode’s situation is all too common. But what sets her apart is that others don’t bother to look at alternatives to COBRA. In most cases, the personnel or human resources department at your company will try to get you to pick up the premiums your employer once paid by keeping your health benefits, in addition to paying a 2% paperwork charge.

There are times, however, when that works out to be good advice. When Marissa Weddington found herself between jobs, she took what

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