Medical Insurance Issues
Virtually all medical plans that involve employee contributions operate under Section 125 of the Revenue Code which sets forth the rules for taking contributions on a pre-tax basis. One of the caveats is that you can only change your election at open enrollment or if you have a life event. Loss of your coverage is a life event. If a firm goes bankrupt and there is no successor firm then COBRA coverage is not available. We recommend the following:
Monitor the situation. If you have availability of spousal coverage, you can only join their plan within 30 days of actually losing your coverage or at open enrollment.
- Check the website of the Insurance Department in the state where you live. Some states are better than others for individual coverage. InNew York, the rate are prohibitive. Also, some states allow individual underwriting.
- Check with your local, state and National Bar Associations or other organizations that you belong to.
- If you are eligible for Medicare, pick up a supplemental plan and Part D drug coverage. Make sure you are enrolled in Medicare Part B.
Make sure that you do not go more than 63 days without coverage. Under Federal HIPAA rules, if you had not had coverage for 63 days, then your new insurer can impose a pre-existing condition limitation.
