Contingency Planning for Health Insurance
Jun 2, 2001
Apologies if you've answered this type of question before, but I didn't see it anywhere. I recently left my job voluntarily and elected Cobra continuation coverage. My former employer is a struggling dot-com whose future, like so many others, is now in question. 1). If the company goes out of business, will the insurance company continue to cover me under the same policy? 2). If the company is purchased by another company with a different provider and policy, would I be covered by my current policy or the new policy? Is there a chance that the acquiring company could discontinue my coverage? Also, if there are specific limitations on coverage for HIV/AIDS in the new policy (such as maximum benefit), would they apply to me and if so based on what effective date (e.g., date of acquisition, date of my diagnosis)?
Thanks for providing such a valuable resource.
Response from Ms. Franzoi
1. If the company ceases to exit, so will the medical coverage. There will be no policy under which to provide COBRA. 2. If the company is purchased, you will still have your COBRA rights. This means that your remaining COBRA coverage will still be avaialble to you. However, your plan of coverage might change. The buyer might continue the current policy which would mean no change in coverage. However, it is more likely that the buyer will replace your current plan with whatever plan he provides to his employees and COBRA participants. You would be subject to the terms of the new plan if that happens. If the new policy has a dollar limit on AIDS treatment that would most likely be applied based on the date of coverage under the new plan.
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