In Business Las Vegas

Health Care

Coverage lapses could have serious results

By Michelle Swafford / Staff Writer

Carol Degan cannot obtain insurance for her respiratory problems because she didn't take advantage of her company's continuation of benefits under the federal COBRA law when she became disabled and quit her job. She is now ineligible for private insurance coverage because of her pre-existing conditions.

Photo by R. Marsh Starks

Employees who leave their jobs could be left without access to health insurance if they don't take advantage of state and federal protections that are available to them for a brief period of time following their departures.

Those who would be most affected by not taking advantage of their protections under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) or Nevada mini-COBRA are people who have pre-existing medical conditions such as asthma, diabetes or knee surgeries.

That's what happened to Las Vegas resident Carol Degan. She now cannot obtain insurance at any cost to cover her lung problems, which must be treated with medications that cost $800 monthly.

Degan said she left her company because of a disability but that her paperwork for COBRA coverage wasn't filed within 60 days of her leaving. She has missed the time limit to obtain COBRA insurance, and private plans will not cover her pre-existing condition.

"I've definitely gotten caught in the cracks some way, and it's like I got punished for it," she said. "We could not get any other insurance because the days before we hit pre-existing condition (status) were gone. I am uninsurable."

Federal law allows employees who have been employed for the company's required time period to continue their health benefits after they leave their company for any reason for up to 18 months under COBRA, said Larry Harrison, owner of Harrison Insurance in Las Vegas.

Employers can charge employees 102 percent of the premium price for COBRA coverage. For example, if an employee's premium is $300 per month and the employee pays $150 while employed and the employer pays $150, the COBRA payment would be $306, which would be paid by the employee, Harrison said.

Employees who work for companies with fewer than 20 employees are not eligible for COBRA, but they might be eligible for Nevada mini-COBRA if they are laid off and were employed for 12 months, Nevada Division of Insurance spokeswoman Peggy Dehl said.

The state COBRA plan is not available to employees who voluntarily quit or are fired, she added.

On both state and federal COBRA, dependents can sign up for a policy even if primary insureds do not, Harrison said.

This is critical if children have a chronic medical condition such as diabetes so they are not classified as having a pre-existing condition on future health plans, he said.

"Some small business employers put off getting insurance and they can't insure the child with diabetes who becomes a product of the system or a cash patient," Harrison said.

Tips to avoid being uninsurable
When employees leave their jobs they often have an option to continue their health insurance benefits, but they must act quickly or they could become uninsurable because of pre-existing conditions.

• If you work for an employer with 20 or more full-time employees for 90 days, you and/or your dependents are eligible for a continuation of benefits under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) when you leave that company for any reason.

• In Nevada, employers can charge 102 percent of the premium for federal COBRA coverage, which will be significantly more money if you currently pay only a portion of the premiums.

• You must sign up for COBRA within 60 days of leaving the company that provided your health insurance to be eligible.

• If an employer goes out of business or stops offering health insurance to its employees, COBRA coverage is not available.

• If you work for an employer with fewer than 20 full-time employees for one year and are laid off, you are eligible for Nevada's mini-COBRA coverage. If you are fired or quit, you are not eligible.

• Pre-existing conditions must be covered once you have been insured for 12 months by one or more plans unless you sign up later or let your coverage lapse for more than 63 days.

• If you do not take advantage of COBRA coverage and do not go to work for an employer with a group health plan, the pre-existing condition would not be insurable.

• Once you have 18 months of continuous coverage through COBRA, your employer plan or a combination, you become eligible for two types of Health Insurance Portability and Accountability Act health plans that provide coverage for pre-existing conditions as well as new conditions.

SOURCE: Nevada Division of Insurance

After employees exhaust their 18 months of COBRA coverage, they are eligible for one of two health plans under the federal Health Insurance Portability and Accountability Act without being classified with a pre-existing condition, he said.

The exception is if they have more than a 63-day lapse in insurance coverage, which could make a pre-existing condition uninsurable, Harrison said.

Nevada does not have a high-risk pool to insure people who cannot get insurance for their pre-existing conditions, but the Clark County Association of Health Underwriters will try to persuade the state legislature to change that in the 2005 legislative session.

Harrison, who is immediate past president of the association, said too many people are uninsurable and fill the emergency rooms with their primary care needs because that is the only place that is required by federal law to treat patients regardless of their ability to pay.

For those who missed their chance for coverage, there are discount programs available that offer savings on physicians' visits and prescriptions. Those programs are not insurance, and insurance commissioners do not regulate them.

Degan said she turned to a discount program and has been purchasing her prescriptions from other countries to save her some money on her medical bills.

Some people also qualify for government assistance, but Degan's household income is greater than the allowed amount.

Employees who are healthy and are looking for more of a preventive coverage for themselves and their families also can look at individual health plans.

In other health care news

The Southern Nevada Area Health Education Center, a nonprofit organization that works to improve Nevada's health through training and outreach programs, was honored recently for its work. The National AHEC organization honored the Nevada group for its training of 4,500 Nevada health care workers on how to respond to biological terrorism and other public health threats.

Michelle Swafford covers health care and small business for In Business Las Vegas and its sister publication, the Las Vegas Sun. She can be reached by e-mail at swafford@lasvegassun.com or at (702) 259-2326.

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