Inner Profile

By A. J. Balkcom

 While C.O.B.R.A. coverage is a lifesaver for many people, former employees often take the C.O.B.R.A. option when it isn’t the best option. When compared to family and/or individual medicalcare insurance, C.O.B.R.A. can cost too much, it may end too early and it may put someone else in control of your policy.

COBRA is often too pricey

COBRA is s short-term solution

C.O.B.R.A. is under someone else’s control

C.O.B.R.A. is often too costly

The COBRA law gives you the right to be covered by a group assurance policy. One of the biggest misconceptions individuals have about healthcare coverage is that group Insurance policies are less costly than individual and/or family health assurance policies that you can get on your own. While this is sometimes true, it isn’t usually. In some states, medicalcare Insurance costs more if bought through an employer.

This is because of the cost of governmental mandates that apply to group health insurance policies that don’t apply to individual medical Insurance policies. A company offering a group insurance policy may have to offer a policy to anyone regardless of their health care history. coverage companies cannot drop an insured person from their individual and/or family medical assurance plan simply because their healthcare has gotten worse after they applied, but they will usually be selective at time of application. This may mean that the insurance company’s costs are much higher for their group Insurance policies than for their individual health care coverage policies.

You may be offered the group Insurance plan that you had before your employment ended or if your company has made changes in the policies they offer to their current employees, it may be a different health policy.

C.O.B.R.A. is s short-term solution

In most situations, C.O.B.R.A. may be kept for a maximum of 18 months, however in certain situations, this time period may be extended to 36 months. This can mean that your coverage may be over at the time when you need it the most. A good individual and/or family medical insurance policy can cover you until you reach the age of 65.

You may be healthy enough to qualify for a long-term health coverage policy at the time when your job ends but not 18 months later. If you or someone in your family develop a condition and/or have trauma that keeps you from buying a policy at the end of your C.O.B.R.A. eligibility

COBRA is under someone else’s control

When you mail in your COBRA payments, you will send them to your former employer. Although this happens rarely, sometimes these companies will take COBRAmoney and fail to pay the insurance company.

If your company changes the plans that are offered to their current employees, they may also change the plans available to those eligible for medical Insurance because they have taken the COBRA option. This can mean that your plan may not cover you as well as it used to. You may suddenly be in the position of having a costly policy that no longer covers you well.

Situations where COBRA is better than private health insurance:

When COBRA is much less costly than a individual and/or family assurance policy

A individual medicalcare Insurance plan isn’t available to you

You’re guaranteed a medical care Insurance plan before your C.O.B.R.A. eligibility ends.

There are situations where COBRA can be better option than a private health coverage policy. If you are not able to acquire a medicalcare policy on your own at a reasonable rate and you find that your C.O.B.R.A. option isn’t too pricey C.O.B.R.A. may be your best options. This of course is also true if you can’tpurchase a C.O.B.R.A. policy because of a pre-existing condition. Another situation when COBRA can be a good option is if you will be eligible for Medicare or some other medical care policy before your COBRA eligibility will conclude.

Alston J. Balkcom has been an insurance agent since 1985. He has helped hundreds of families find low cost health insurance

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Health Savings Account Vs Flexible Spending Account

By vijay v

 Because HSAs are still fairly new, often people get confused between a health savings account and a flexible spending account. To understand the difference between the two then, read on.

There are two main differences between a Health Savings Account and a Flexible Spending Account. First, to have an HSA, an individual must first have a qualifying High Deductible Health Plan (HDHP); which is an insurance policy with a higher deductible, a lower monthly premium, and generally a cap on maximum out of pocket expenses. Second, an HSA is owned by the individual who opens it and can stay with them forever. An FSA on the other hand is owned by the employer; so if an individual leaves their job, anything left in the FSA, including the individuals contributions are kept by their former employer.

Some of the benefits of having a HSA account include:

Typically lower monthly insurance premiums HSAs require the individual to maintain a High Deductible Health Plan. HDHPs generally have lower monthly premiums than traditional health insurance plans.

Tax Benefits Like an FSA, all contributions made into HSA account can be made pre-tax if part of an employer sponsored plan. If the contributions to the HSA are part of an individual plan, then contributions made to the HSA may be taken as an above the line tax deduction. An HSA has other tax benefits. Money deposited into an HSA grows tax free and when withdrawn, if spent toward qualified medical expenses, may be spent tax free.

Invest Once money is deposited into an HSA account, it may be invested in different investment vehicles. Individuals should speak with their bank or broker to understand the investment options available. Healthy individuals who do not need the money from the account immediately, may let the money in their HSA grow tax free, and then, if they become ill at some point in the future, between the contributions and the interest on their HSA, hopefully they will have plenty of cash to pay for those future medical expenses. Once again, the unused money in an individuals HSA account will roll over from year to year and accumulate interest tax free.

No Expiration. Money deposited into Flexible Spending Account must be spent by the end of each year or it is forfeited. On the other hand money deposited into an HSA belongs to the individual on the account and never expires, even if the individual changes jobs. If, in the new job, the individual has a qualifying High Deductible Health Plan, they may continue to contribute to their HSA. If they do not have a qualifying HDHP in their new job, they will not be able to make new contributions to their HSA, but they will be able to use the funds in their HSA for qualified medical expenses until such time as they close the account.

Both Health Savings Account and Flexible Spending Account have their own benefits and serve as a valuable tool to help finance medical expenses. HSAs provide far greater flexibility than an FSA in terms of portability, utility and from a tax perspective.

Article Source : Article King Pro - Free Reprints and Distribution

HSAeducator.com is an easy to understand website on the benefits of health savings accounts and an online community for people interested in or using health savings accounts (HSAs). To learn more visit, http://www.hsaeducator.com

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