Guaranteed Issue
When is “Guaranteed Issue” Health Insurance Available?
Individual medical insurance carriers ask detailed medical questions, and if you’re overweight, using an expensive prescription, or have a serious (or expensive to treat) health condition when you apply, you can be declined. The guaranteed issue section of the Health Care Reform Bill will not take effect until 2014. So what’s available for folks who cannot be successfully underwritten? If you’ve been declined for an individual policy, here are some options:
If you have been on a group plan, COBRA and CalCOBRA(in California only) coverage is available in most cases. There are State Continuation laws in other states, but we’re here to tell you about California. COBRA and CalCOBRA offer the same coverage you enjoyed under your group plan, lasting for 18 to 36 months when a qualifying event occurs. If your employer has more than 20 employees and some form of “self funding” or other specific type of plan, you may have only 18 months of coverage. Smaller employers (less than 20 employees) and many larger employers offer your benefits for 36 months. Rates are based on the employer’s cost for active employees and dependents (your premium will be either 102% or 110% of the employer’s cost in most cases). If you are on COBRA or CalCOBRA, you have all of the rights of similarly situated active employees, such as open enrollment, the ability to add a new spouse or new baby to the plan, etc.
It is sometimes practical for the family member with medical conditions to take COBRA coverage, while the healthy family members apply for a fully underwritten individual plan. Remember, you have a limited time window during which this benefit is offered. If you miss the deadline, you lose.
HIPAA makes at least two health plans available from every carrier offering individual medical plans in each State on a Guaranteed Issue basis AFTER COBRA. You must exhaust your full COBRA benefit and apply for one of these plans within 63 days of your COBRA termination. These plans are not inexpensive and the benefits are different than those you had under COBRA, but they are generally comprehensive plans with full coverage for prescription medication, office visits, etc. Sometimes COBRA ends early due to an employer terminating group coverage or going out of business; you may still be able to purchase a HIPAA policy in those situations.
MRMIP, a subsidized program (using tobacco tax revenue) is available for 3 years of coverage after you’re declined by one of the participating health plans, such as Anthem Blue Cross or Blue Shield of California. If you have a serious condition and don’t want to go through the underwriting process, we can help you get the necessary declination more efficiently. Benefits are limited under the MRMIP plans, so if you can qualify for COBRA and then HIPAA plans, you’ll be happier with those policies. There may be a waiting list to enter the MRMIP program, as well. You may find yourself without coverage for several months while positions in the pool open up.
The recently established MRMIP Graduate Program is available after you have 3 years with MRMIP coverage. Please call us for details.
PCIP: California residents may qualify for the new “Pre-Existing Condition Insurance Pla n”. Rates are available in our quoting engine or on their website. In order to qualify for coverage, you must have been without health coverage for at least six months, have a pre-existing condition or have been denied coverage because of your health condition. The program is only available until 2014, when the Health Care Reform legislation makes the “exchange” products available.
Children may qualify for the Healthy Families program without underwriting, depending upon the parents’ income level. This is a low cost option for families, but does require that the child either be added at birth or have 90 days with no prior coverage. We do not recommend dropping a child from your group insurance for 90 days, but if you have no other coverage the program can be a great value. Link to the California Healthy Families Program Website.
A.I.M., a special program for expectant mothers meeting the income guidelines, must be purchased early in your pregnancy. Cost is based on the number of members in your family and your income level. Coverage for the newborn baby can extend through Healthy Families, with options for H.M.O. and P.P.O. plans. Here’s the link to the California AIM website.
Group Insurance, when purchased by a business having a minimum of two employees, is generally guaranteed issue. Requirements include one employee or owner working a minimum of 30 hours/week in the business and a second owner or employee working a minimum of 20 hours/week, both for more than half of the preceding calendar quarter. Some carriers will consider any consecutive six week period. Documentation may include a business license, copy of your partnership agreement or Statement by Domestic Stock Corporation, copies of K-1 or Schedule C tax forms, payroll records, etc. Employees not married to the owner are required to be covered under Workers Compensation insurance. If one employee is covered by a spouse’s group plan, they may waive coverage under the group and the one owner or employee not covered elsewhere can have group insurance. There are many plans offered by a large number of insurance carriers.
We also have a special program for self employed individuals not offered by most other brokers. You may qualify for HMO coverage if you have a “service business” and include a Schedule C when filing your Federal income taxes. Rates are not based on age, so everyone pays the same price based on your location (Northern or Southern California).
For more information on the state sponsored programs and an “eligibility tool” for your specific situation, visit www.coverageforall.org .
