Alternatives to COBRA Coverage
HIPAA Eligibility for Guaranteed Individual Coverage
Individuals who have lost their employer-sponsored health care insurance including those who are seeking alternatives to their COBRA coverage, and who are considered as HIPAA eligible, can have affordable health care alternatives based on individual plans. HIPAA stands for the Health Insurance Portability and Accountability Act of 1996 in which the use of medical savings accounts was promoted as employees’ protection against the loss of insurance coverage due to job loss or job transfers.
This law guarantees the rights of individuals to obtain adequate health care coverage, as it was the first to impose a ban on the unfair practice of excluding individuals with pre-existing conditions from health care services. Those who have extended their COBRA coverage must first exhaust their plans but can now apply for HIPAA eligibility even before the COBRA coverage is exhausted to insure continuity of health care benefits. In addition, those who are HIPAA-eligible and who will acquire guaranteed individual plans will no longer be qualified to become Medicaid or Medicare recipients or other health coverage programs of the state.
The Health Coverage Tax Credit (HCTC)
This tax credit pays for 80% of qualified health insurance premiums of HCTC eligible workers. The basic eligibility requirements to become HCTC-qualified are those entitled to receive Trade Adjust Assistance (TAA) benefits or those receiving pension funds from the Pension Benefit Guaranty Corporation (PBGC), plus other general requirements including that of having an existing and qualified health plan.
For more information about this health care option, visit the IRS webpage for HCTC: Eligibility Requirements and How to Receive the HCTC.
Please continue to Page 3 for more on these alternatives, plus information on tax incentive credits to employers.