Switching Health Plans

  • Switching Health Plans

    Many questions arise about health coverage when leaving a job or taking an early retirement. Understanding your rights and options will ensure you make the best decision for your situation.

What You Should Know
Special Enrollment Period (SEP)

SEPs are a time outside the annual open enrollment period when you may qualify to purchase or change your health insurance. The following events may qualify you for a SEP:

  • Loss of qualifying health coverage (i.e., a group health plan or Medicaid)

  • Change in household size (i.e., marriage/divorce, new baby or adoption)

  • Moving

  • Other situations

You have 60 days from the date your health plan ended to enroll in a new plan through a SEP. You may be required to provide proof that you are eligible for a SEP, such as a birth or marriage certificate or proof of new residency.

To learn more, visit www.healthcare.gov or call the Marketplace at 800-318-2596. You may also contact an insurer or licensed agent with more questions.

Losing a Group Health Plan

The following options are available to those losing employer group coverage:

  • Temporarily continue the same group health plan under COBRA. COBRA is available to health plans of employers with more than 20 employees.

  • Purchase individual coverage through the Health Insurance Marketplace, from a licensed insurance agent, or health insurer. You can still go to the Marketplace and check to see if the rates offered there are more suited for your needs even if your employer has more than 20 employees. You may be eligible for a subsidy.

  • Enroll in another group health plan you may be eligible for through a new employer or a spouse's plan.

  • Purchase a short-term limited duration plan to bridge the gap between coverage during a period of transition. See Limited Benefit Insurance Plans for more information regarding short-term plans.

  • Enroll in Medicare, Medicaid, or the Healthy Michigan Plan if you are eligible.  See Shopping for a Health Plan for plan contact information.

Consolidated Omnibus Reconciliation Act (COBRA)

COBRA is a federal law which allows you the right to continue employer group health coverage on a temporary basis after you, your spouse, or your parent leaves an employer with 20 or more employees.

The employer must notify the former employee of their COBRA rights within 30 days after employment has ended.  Once notified, the former employee has 60 days to apply for COBRA coverage and is responsible for paying the entire premium, including any part the employer paid, plus up to an additional two percent for administrative expenses.

COBRA coverage is available for:

  • 18 months.

  • 29 months if you became eligible for Social Security disability during the first 60 days of COBRA coverage.

  • 36 months if you were insured through a spouse's or parent's employer and the spouse or parent has become eligible for Medicare, died, divorced, or separated or if the dependent child has reached the age beyond eligibility.

COBRA is complicated! The employer’s human resources office should have a booklet explaining the details. Additional questions can be addressed by the U. S. Department of Labor, Employee Benefits Security Administration at 866-444-3272 or at www.dol.gov/ebsa.

Moving from One Employer Group Plan to Another Employer Group Plan

The federal Health Insurance Portability and Accountability Act (HIPAA) applies when you are covered by an employer’s group health plan and you move to a different employer also offering health coverage.

If the new employer’s group health plan offers dependent coverage, they must offer coverage to your dependents that were covered under your previous plan.

The new employer’s group health plan may cost more and provide different coverage. If the new employer health plan offers dependent coverage, it must have a special enrollment period to add a dependent because of marriage, birth, adoption, or loss of other coverage. As with individual health plans, group health plans may not impose pre-existing condition exclusions.

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