Health insurance and COBRA.

More people are probably aware of COBRA and health insurance than ever before because of the economic downturn and unfortunate massive job losses. But what exactly is COBRA?

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act. The is a federal law that was passed in 1986. It allows for the temporary extension of health insurance benefits in the event an employee covered by an employer group plan has their hours cut or no longer has a job.

COBRA allows you to continue under the group plan for at least 18 months, so you can still have health care insurance coverage. Spouses and dependents may also be eligible to receive COBRA coverage.

You will, however, be responsible for the full premium including the portion that your employer may have paid before. Many people who lost their jobs were shocked to find out how big this premium is (or how much of the tab their employer was picking up).

COBRA kicks in immediately after a person loses their job, which can be an initial relief considering the trauma of the circumstances. Employers are pretty much required to offer it, unless the company closes or goes bankrupt and there is no longer a group plan.

Many employer group health plans are quite comprehensive and, depending on the plan, the full premium can be quite high — especially if someone is now without an income. There are some alternatives.

Temporary or short term health insurance can provide you a period of coverage between jobs. The premium is often lower than many plans, but the coverages are also more limited.

You can also get a basic and essential health plan that again provides limited coverages but at a lower cost.

Many people start their own business when they find themselves unemployed. There are many companies that offer health insurance for self employed individuals.

Also, you may just want to shop around and do some health insurance comparisons. You may find a plan that’s right for you at considerably lower cost than the COBRA premium.

Losing a job in these tough times is certainly traumatizing. If you can somehow fit some health insurance protection into your budget, you’ll gain some peace of mind.

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Disaster insurance: Homeowners, hurricanes and Katrina five years later.

Hurricane Katrina slammed into the Gulf coast almost five years ago. The disaster destroyed homes and lives and rocked the nation. Home insurance companies paid billions in claims.

The Property Casualty Insurers Association of America (PCI) has created a white paper that highlights some of the lessons from Katrina and analyzes ways insurers, communities and homeowners can reduce the impact of future hurricane disasters. The goal is to lower the financial impact to insurance companies which should translate to lower home insurance costs.

Of course this is a benefit to the insurers, but reducing risk should benefit consumers as well. For example, Florida home insurance rates are notoriously high, and sometimes it’s difficult for some property owners in that state to find coverage. Hurricanes, wildfires and floods have spooked many insurers.

Some of the lessons from PCI’s white paper include:

  • The need to encourage communities and homeowners to find ways to reduce hurricane damage risk.
  • Insurers have found better ways to communicate in the aftermath of a disaster, including using social networking sites like Facebook and Twitter, plus satellite technology.
  • Insurers have found better ways to reduce disruptions of service, such as deploying mobile command centers.
  • More homeowners in hurricane-risk areas need to be educated about the importance of having flood insurance. Many homeowners may not realize that their policies don’t cover flood. Flood insurance is a special government program.
  • The need to improve how to understand risks in disaster-prone areas.

In the meantime, many home owners in Gulf and Atlantic coast states have seen a rise in property insurance premiums. Even if their options are limited, it’s still advisable to periodically check to see if they can lower their costs by getting home insurance comparison quotes.

You should get at least three quotes for a good comparison, and talk to your agent or investigate flood insurance if you don’t have it.

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Financing dental work shouldn’t scare you away from the dentist.

Paying for dental costs. It seems to get more expensive every time we visit a dentist. Of course, new technologies that improve both care and comfort plus rising costs of materials contribute to the increase dental treatment costs.

But paying for it can still be tough in this economy — especially if you lost or don’t have group benefits from an employer. So what are some of the ways you can finance dental costs?

Dentists typically take cash, personal checks or major credit cards for payment. If you have no dental insurance and you need work done right away, talk to your dental provider about payment plans if you don’t have the money on hand. They usually work with a third-party finance company, similar to the companies that set up credit accounts with a department store or other retail business.

Once approved, you could then get the treatment done and just pay monthly payments. You may also have the option to get revolving credit so you could finance dental treatment for other members of your family.

Going into debt isn’t always palatable (no pun intended), so another option is a discount dental plan. This is a membership plan, where you pay an annual fee. Dental providers who participate in the plan’s network agree to offer discounted fees on a variety of procedures (with savings of 10 to 60 percent) to members. Many of the plans can activate within three days of joining, so this may be a good option if you need some work done right away. Some discount plans even offer savings on getting braces (orthodontia) or cosmetic dentistry such as teeth whitening.

You can also find affordable dental insurance plans by shopping around. Make sure to compare plans to see if they have the right coverages, deductibles and dental care providers for your needs. Also, note the limits to coverage and yearly maximums. Most dental insurance plans will only cover up to a certain amount each year, and that limit can easily be reached. In that case, many people finance through a payment plan for an additional costs.

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Health insurance in California: New tool to protect consumers.

The California Department of Insurance announced last week that consumers can now receive alerts by e-mail when new health insurance rate filings are made for the individual market.

According to the department’s press release, Insurance Commissioner Steve Poizner said, “We want as many people as possible scouring these rate filings to ensure they are mistake-free.”

The idea behind this (as part of Poizner’s pledge to create transparency by posting all health insurance rate filings on the department’s Web site) is to protect consumers by making sure insurers are spending 70 percent of premiums on medical benefits as mandated by state law. Apparently, the more eyes analyzing these rate filings the easier it is to catch a mistake. It’s not apparent what kind of “mistakes” the department is talking about.

Now this may or may not change how you shop for a California health plan. Perhaps it will give you an idea of which health insurance company has lowered their rates, or has lower rates.

The fact that rates are determined by the companies, and consequently rates (and coverages) can vary quite a bit, means that consumers shopping for affordable California health insurance still need to get multiple quotes to find the right plan. It’s often recommended to get at least three individual quotes for a good comparison.

When reviewing a health insurance plan, keep in mind other factors besides rate. For example, what are the coverages and exclusions? How much is the deductible and co-pays? Can you get access to the physicians and health providers you need? Make sure it will provide for your needs and is offered by a company with a good financial reputation.

If you want to sign up for the alerts, just go to the California Department of Insurance Web site.  Basically, all you have to do is provide your e-mail address and select the documents or updates you want to receive.

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Your life insurance needs and life events.

When people buy life insurance they often forget about it, not realizing that as their life changes so do their coverage needs. You may need more. You may need less. You might benefit from a different type of policy.

It’s really a good idea to ask yourself “What has happened in the past year that changes my life insurance?”  (If you don’t have coverage, and you have people who depend on your income, it’s time to get life insurance.)

Think about the following scenario: You change jobs or start a home based business. Maybe you were already getting some life insurance coverage from your employer as a benefit. When your employment ends, most likely so does that coverage. If you factored that in as part of your total life insurance coverages, you may not have enough for your family’s needs.

Another common scenario happens when a couple has a child. That can be a busy time, and life insurance may be the last thing new parents are thinking about. But now there is an extra person depending on your income.

At the opposite end, if you have an adult child who becomes financially independent or you pay off a mortgage, you may not need as much protection.

So many life events can change your life insurance needs: moving an elderly parent into your home, getting a promotion, taking out a second mortgage.

If you think your needs have changed, talk to your agent but also take a few minutes to compare term life insurance quotes to see if you can lower your costs. You should get at least three different quotes.

Also, keep in mind that sometimes it might be just as affordable to get a little more coverage. For example, if you determine you only need $230,000 of coverage a $250,000 policy may cost the same.

You may also be interested in seeing what different types of life insurance are available that can help you reach your financial goals. For example, you can compare whole life insurance vs term.

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