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FoxGig is the personal blog for Glenn Fox, CEO of BusinessElite, former AOL VP Exec Recruiting & Talent Acquisition, founding member of Microsoft's Executive Recruiting Team and former Principal in Korn/Ferry's high tech practice

Lesson Learned: Never COBRA Your Insurance follow this blog post

posted by on June 1, 2009

Learn from me.....never pay to COBRA your employee health insurance.

For the past several months I've been paying nearly $1,500 per month in COBRA payments to continue my AOL health insurance. With my COBRA now running out it was time to shop for a new family health insurance plan. Since the AOL health benefit plan was pretty good my wife thought the easiest thing to do was contact our current provider, United Healthcare, and find out the cost of an individual family plan. Boy, did we learn alot from making that call.

As it turns out my family can get nearly the same health coverage (including prescriptions) program as AOL - - for less than $600 a month - total. Unbelievable!! This was nearly a $1,000 per month savings for us. The person who helped us said that it is almost always cheaper to simply obtain an individualized plan as opposed to paying the COBRA premium. Go figure!

Just wanted to pass this along!

(read more of my ramblings here)

 

businesselite cobra health insurance healthcare
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12 comments

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  • 1 point 5 months ago

    I too learned my lesson about COBRA when I became independent in 2005.  I strongly recommend using an independent health insurance broker to help you through the maze of options.  I was fortunate to have found a great one and she has saved us money and time.  PS - be prepared to change insurance companies every 12 to 24 months as they are very found of increasing your premiums (regardless of your claim history)

  • 1 point 5 months ago

    I'm not sure about all states, but in Colorado, you can create a "group" of one - then the "group" can accept pre-exisiting conditions.  (there are a couple of rules to go with it), but still a cheaper route to go for those with pre-existing conditions.  Talk to a local insurance broker.

  • 1 point 5 months ago

    Cobra is the ONLY option for many who have a pre-existing condition. In addition, individual plans may be good only until you get a serious illness, at which time they can opt you out (either at end of contract period or even after one month if you are on a monthly plan).  High risk. Need a public option that accepts everyone - where profit is not a motive.

  • 1 point 5 months ago

    Pre-existing for you or your family will also help you decide if you should go group or individual. A little known fact is that its harder for an insurance provider to "drop" you if you are in a group. Its "easier" as an individual.

    Yes - there are horror stories about people being dropped on non-cobra individual plans AFTER being admitted to the hospital. Those poor people have to take loans to get the help they need. This is a very small percentage of the people on individual plans. But at that point, its a little late. Shop and buy for your needs :)

  • 1 point 5 months ago

    Good advice regarding "individual policies" vs COBRA...AS LONG AS you are young and healthy and have no PRE-EXISTING CONDITIONS.  If you don't meet those criteria, forget about individual, private health insurance...you will be denied coverage, or charged a premium that will make COBRA look like a bargain.

  • 1 point 5 months ago

    Also look into the difference of a group policy vs an individual policy. If you are on a company group policy and go to cobra. The cobra will still be a group policy.  IF you go off cobra it might move you to an individual or family policy. there could be other items, or preexistings, that could drop off and affect you down the road. I would suggest doing your research.

  • 1 point 5 months ago

    As Jason said if you have a pre-existing condition that the Insurance Cos doesn't like COBRA is the way to go given the Fed Gov's subsidizing it for the short-term.  65% off made it much more attractive for me. 

  • 1 point 5 months ago

    Also, if you are just in between jobs - the best option is to do a short term policy - they typically have a higher deductable and last for 60 days -6 months - but at a cost of only $150/mo...  insure.com

  • 1 point 5 months ago

    You're right, it's cheaper unless you have a preexisting.  Then the family member with the condition is usually required to have a seperate policy.  But the COBRA ARRA this year cuts 65% off most premiums.  So 35% of $1,500 is cheaper than your new $600 policy - if you qualify with the ARRA termination dates.

    http://www.dol.gov/ebsa/cobra.html

  • 1 point 5 months ago

    Hey Krista -we simply called United Healthcare.  They referred us to one of their divisions that write policies.  We filled out some forms, answered a few questions and now the policy kicks into effect at the end of this month when my Cobra runs out.  Given the cost savings - I wish I would have done this months ago!

  • 1 point 5 months ago

    Glenn, my friend, where did you get your private insurance? I'm paying more than twice what you are for  Blue Cross CT.

  • 1 point 5 months ago

    This is very true and was a surprise for me as well. The cost of individual insurance was almost a third of what COBRA was charging to extend my previous employers coverage. Good of you to post this up as more people are looking at starting up their own businesses/going independent.