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Have you wondered how your health insurance would be affected if you were fired from your job or decided to reduce hours or seek another opportunity? This is a serious concern for anyone with employer-based insurance.

COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, allows employees to maintain their health insurance for up to 18 months in such situations. Employees can continue to pay premiums and get full or partial coverage while they look for private insurance or get another employer-based option.

For those who are eligible, COBRA can be a great short term option. However, COBRA is not the only form of short term health insurance available. Anyone who needs a form of short term insurance coverage can find a plan that works for them.

When would you need short term health insurance?

Losing access to your employer-based insurance is a common reason individuals or families seek short term health insurance. This can be caused by reducing your work hours to part-time, deciding to seek new employment, starting your own business, or being released from your
current job.

Even if you don’t have employer-based insurance, there are times when short term insurance plans can be useful:

  • If you missed ‘Open Enrollment’ and do not qualify for ‘Special Enrollment’ so you are unable to apply for insurance through the ACA
  • While waiting for your ACA coverage to start
  • The last year or two before Medicare begins
  • After turning 26 and having to come off of your parent’s insurance
  • While in between employers
  • While in between insurance providers
  • Full coverage is too expensive at the moment

Short term health insurance

There are two alternative forms of short term health insurance: coverage through the ACA or via private providers.

The ACA offers short term health insurance options. Their coverage must meet certain standards established by the government. These include coverage for maternity, 100% preventative care, mental health, substance use, and more. The problem with ACA is the enrollment period. Open enrollment is a little over a month long and happens at the end of each
calendar year. Special enrollment options are available but uncommon. For those who need immediate short term coverage during the rest of the year, the ACA presents a challenge.

The most common alternative to COBRA is short term health insurance through a private provider, with options varying between each. Most insurance providers will offer some form of short term health insurance, but not all of them will. Some of the most popular providers include:

  • Everest
  • UnitedHealthcare
  • National General
  • IHC Health Group
  • LifeShield
  • Pivot Health

This means that when you are looking for short term health insurance coverage, you need to know exactly what you want to be covered and what type of budget you are working with.

The nice thing about short term insurance plans is their flexibility. Plans through the ACA are required to meet a certain threshold of coverage, but private plans are not. Most private plans will include coverage for preventative care, urgent and emergency care, doctor visits, and
possible prescriptions.

Private plans allow you to build out the rest of your coverage. You can include things such as vision, dental, accident, maternity care, mental health, or critical illness plans to complete your package.

Make sure to pay close attention to the ‘exclusions and limitations’ section of your policy before buying. This will detail which type of coverage is included and which type is not.

Pricing for short term health insurance is equally as flexible as the types of coverage. Be careful though, cheaper options might come with significantly reduced coverage or high deductibles. Private short term insurance is also likely to include coinsurance, co-pay, and other out-of-pocket costs.

Short term insurance can be a great option for quick and effective coverage. However, there are multiple differences between short term and full coverage. When shopping for short term insurance, make sure to read through the policy carefully to ensure you have all the coverage
you need.

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