By: Health Insurance
Submitted: 2009-10-15 16:24:20 | Word Count: 634
Q. What happens if my company goes out of business?
Then you're in even more trouble. Because your employer's health plan no longer exists, you not only lose your coverage, you also lose the option of extending it through COBRA.
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Q. I've heard that my company is "self-insured"? What does that mean?
It means your company pays your medical claims out of its own coffers instead of buying coverage from an insurer and having the insurer bear the financial risk. Even if your company is self-insured, it probably hires an insurance company to administer its health plan.
In the event your company goes out of business, you could be stuck with any claims you've incurred if you have not yet been reimbursed, said Tom Billet, a consultant with benefits adviser Watson Wyatt.
Q. If I or a family member has a so-called preexisting condition, how can that currently affect my ability to get insurance through my job or through the private market?
If you work for a large employer, your health status should not affect your ability to get coverage through your job or the premium that you pay for it.
If you're new to your company and you have an insufficient history of coverage, your employer could temporarily refuse to cover your preexisting condition.
Depending on the rules in your state, the size of your company's workforce and the severity of your medical problem, your health status could be enough of a factor to trigger an increase in the company's rates when its insurance comes up for renewal.
In the individual market, you could be denied initial coverage or charged higher premiums based on a preexisting condition. You could also be offered policies that don't cover that condition. Again, the rules vary from state to state. Once an insurer has sold you a policy, it cannot refuse to renew it based on a preexisting condition, though it may be able to raise your premium sharply when the policy comes up for renewal, said Cheryl Fish-Parcham, deputy director of the advocacy group Families USA.
Q. What major shifts in insurance coverage would come under the bills being considered?
The legislation remains a work in progress, but this much is clear: Under any of the major bills, leaving or losing your job could put you at less risk of joining the uninsured.
Eligibility would be expanded for Medicaid, the state-federal program geared largely toward people with low incomes.
Individuals and at least the smallest businesses would be able to shop for coverage in regulated marketplaces called exchanges, where they could no longer be charged higher premiums or denied coverage based on their medical history. Eventually, employers could be required to alter their benefits to meet at least the minimum standards set for exchange-based coverage.
In the exchanges, insurers could be barred from imposing annual or lifetime limits on how much they will pay for your health care. In addition, individuals' exposure to out-of-pocket expenses could be capped.
Individuals could be required to buy coverage or pay a penalty. Similarly, employers of a certain size could be required to provide health benefits or to pay a penalty if they don't. Some individuals and businesses could qualify for federal subsidies.
The legislation would expand access to insurance. However, it remains to be seen how affordable the coverage would be.
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