YOU ASK THE SENIOR QUESTION
Dear Savvy Senior
WE FIND THE SAVVY ANSWER Dear Savvy Senior
I’ve worked for a major corporation for nearly 30 years and plan on retiring in a couple of years. But each day the headlines are filled with companies (including mine) that are announcing layoffs by the thousands and even the tens of thousands. I’m worried that my turn could come soon, and with that, the loss of healthcare coverage. I hope to hold on until I’m 65, but if I can’t, I want to know about my healthcare options. Where do I turn to fill in the gaps should the worst happen?
Hanging on in Corporate America
Dear Hanging On
It’s troubling when a worker who dedicates most of their professional life to help build a company, only to get the "heaveho" towards the end for their career. But in today’s world it happens, so you’re smart to be prepared. Hopefully this won’t happen, but if it does, here are your options:
Negotiate for continued healthcare coverage as part of your severance package. You gave the company three decades of your health every day you went to work. Getting them to carry you under the existing arrangement for some period of time doesn’t seem unreasonable. Many times, companies will offer an extension as part of a negotiated exit package.
Look next to what is known as the Consolidated Oninibus Budget Reconciliation Act also known as COBRA. This is a law, not an insurance policy,
requiring qualified employers with group health plans to allow employees to continue under the group healthcare plan if they have been laid off, fired or are between jobs.
Here’s what you should know about COBRA:
• Part of the premium paid by the employer will now be shifted to the employee, so be prepared for a jolt to the pocketbook. Sometimes companies are paying 70, 80 and even 90 percent of an employee’s health insurance. Depending on your personal situation your costs could now be hundreds of dollars each month.
• It will be much more expensive than you are used to paying, but it also will be less expensive than trying to buy health insurance on your own.
• COBRA can carry people through for 18 months.
• Small employer plans (for companies with 20 or fewer
employees) are generally exempt.
A good place to begin is www.cobrainsurance. com. There are a lot of rules and definitions to consider, many of which are outlined here.
ShortTerm Insurance Another option to consider is shortterm medical insurance. These are policies offered by insurance companies for people who are temporarily unemployed. The duration of the policy varies from insurance provider to insurance pro-vider, but many set limits of anywhere from one to six months. They may not cover preexisting conditions, for example, and may not pay for routine matters, such as annual exams and immunizations, but they may cover a catastrophic event such as a heart attack, that could wipe out 30 years of savings.
Some policies can be bought in onemonth increments but keep in mind the fact that they can cancel you, at the end of the month, particularly if you’re filing a lot of medical claims. I’ve heard it characterized as an insurance that will pay for any illness or injury suffered for the first time.
The best thing to do is talk to your insurance provider, or shop around, comparing companies and multiple types of coverage before any decision. Here are some good resources to start with:
• Quotesmith.com: A great resource for insurance shopping and price comparing. Visit wwwquotesmith.com
• Health Insurance Association of America (HIAA): For consumer information call 2028241600 or visit www. hiaa.org.
Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK, 73070 or visit www.savvysenior.org.