Personal Finance Essentials
A Warning About Group Health Insurance
Many people receive health insurance through their employer, and that can be a genuine advantage.
Employers often negotiate coverage that is broader and less expensive than what you could buy on your own. It’s also convenient – premiums are typically deducted from your paycheck automatically, and you don’t have to shop the market yourself.
That said, there are real risks that come with depending entirely on employer-provided coverage. Compared to an individual policy you might purchase on your own, employer-provided health insurance:
For this reason, it’s worth shopping for a policy on your own and comparing it to what your employer offers. Having that knowledge puts you in a stronger position regardless of what you decide.
Five Ways to Lose Your Employer-Provided Coverage
It’s easy to take group health insurance for granted, but there are more ways to lose it than most people realize. You could lose your coverage if:
COBRA Coverage
If you lose employer-provided health insurance, ask your human resources office about COBRA. COBRA is a federal law that allows you – or a covered family member – to continue your existing health coverage for 18 to 36 months after losing employer-provided insurance.
The downside is cost. Under COBRA, you pay the full premium yourself, without any employer contribution. That can be a significant expense. COBRA also has an expiration date, so it’s not a permanent solution. If you find yourself relying on it, begin looking for a permanent alternative right away.