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Understanding your health insuranceLast Updated: July 15, 2005
Understanding Insurance Coverage
Most Americans get health insurance through their jobs or are covered because a family member has insurance at work. This is called group insurance. Group insurance is generally the least expensive kind. In many cases, the employer pays part or all of the cost.
Some employers offer only one health insurance plan. Some offer a choice of plans: a fee-for-service plan, a health maintenance organization (HMO), or a preferred provider organization (PPO), for example. Explanations of fee-for-service plans, HMOs, and PPOs are provided in the section called Types of Insurance.
Group insurance is generally the least expensive kind. In many cases, the employer pays part or all of the cost. Some employers offer only one health insurance plan. Some offer a choice of plans:
Explanations of fee-for-service plans, HMOs, and PPOs are provided in the section called Types of Insurance.
What happens if you or your family member leaves the job?
You will lose your employer-supported group coverage. It may be possible to keep the same policy, but you will have to pay for it yourself.
This will certainly cost you more than group coverage for the same, or less, protection. A Federal law makes it possible for most people to continue their group health coverage for a period of time. Called COBRA (for the Consolidated Omnibus Budget Reconciliation Act of 1985), the law requires that if you work for a business of 20 or more employees and leave your job or are laid off, you can continue to get health coverage for at least 18 months.
You will be charged a higher premium than when you were working. You also will be able to get insurance under COBRA if your spouse was covered but now you are widowed or divorced. If you were covered under your parents' group plan while you were in school, you also can continue in the plan for up to 18 months under COBRA until you find a job that offers you your own health insurance.
Not all employers offer health insurance. You might find this to be the case with your job, especially if you work for a small business or work part-time. If your employer does not offer health insurance, you might be able to get group insurance through membership in a labor union, professional association, club, or other organization.
Many organizations offer health insurance plans to members.
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