Question About Insurance Coverage Before MBA Starts

Question

Dear friends,

I have a question regarding insurance. Most of the MBA students I talked to recommended that I take the summer off prior to the Fall term, because an MBA is intense in nature and it is best not to exhaust oneself with work prior to attending business school. However, like most people, my insurance coverage is with my current employer; if I quit my job, I will be temporarily without insurance.

For those who went through the employer to MBA transition process, how did you deal with the insurance coverage issue? I heard that there's COBRA, but what are the options and what is the best option?

Thanks!!!

ashkanator · Answer

very interesting question... actually i would like to know the answer to this as well...

theOranje · Answer

COBRA coverage tends to be relatively more expensive because you are paying for the same level of coverage that you had under your group (employer) plan. The plus side is that the coverage is guaranteed under U.S. law. The monthly premium you will pay can be no more than 2% over the original insurance cost. So if you were originally paying $75/month and your employer was paying $200/month, your monthly premium should be around $275+2%. The U.S. Department of Labor has a nice FAQ that you can search for easily online that explains COBRA coverage.

Alternatives exist for healthy individuals in the individual insurance market. You can go to any number of insurance companies websites and search for plans that fit your age and lifestyle. They need to review your medical history before issuing you coverage. Considering Fall 2011 is just a few months away, this may be more hassle than it's worth. These will probably be cheaper than COBRA though since you could theoretically choose a plan that only covers a few doctor visits every year and nothing else.

ashkanator · Answer

Thanx for the explanation

Posted from my mobile device

tortoiserun · Answer

If there will be less than 60 days between the time your insurance benefits end at work and you're eligible for student health insurance, you can also just wait it out and see if you incur any medical bills. If you do, you can elect COBRA, pay the premium, and your benefits will apply retroactively. It's just critical that you're within the 60-day window that you're eligible to elect COBRA.

Also, check your HR policies on when coverage ends. At a lot of companies, it ends on the last day of the calendar month in which you leave the company. I'm planning on leaving a couple days into June so I will have coverage for the entire month. Then I'll just be uninsured for July and August, but by August I'll be eligible for student insurance, so if something happens between those two points in time I'll elect COBRA.

There's some good info here: https://articles.moneycentral.msn.com/In ... spx?page=1 The 60-day retroactive part is on page 2.

Disclaimer: Talk to your HR department about all the details and how they work at your company before you leave. Health care laws are rapidly changing, and this isn't something you'd want to screw up.

jko · Answer

Yep, this is what I was going to say.

Check with HR about the policy, but the 60 day window for COBRA is great. If you start school within ~60 days of when your insurance through your employer ends, you're good to go.

Question About Insurance Coverage Before MBA Starts

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