4a. Free Market Safety Net Q&A

The Georgia Free market Safety Net consists of several parts:
(Guaranteed in the Original Group Contract for Insurance Upon Loss of Job)
 
1. COBRA - federally required continuation of coverage for insured groups of 20 or more employees
2. State Continuation of Covereage - for insured groups of fewer than 20 employees
3. Conversion Plans - available coverage for insured lives following COBRA or state sontinuation of coverage 
 
In addition, this Chapter includes improvements in the Free market Safety Net for rescissions, dependent children, and pre-existing conditions. 
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Q1. COBRA & Continuation of Coverage - Does the reform equalize the periods for continuation of coverage after job loss between small and larger employers?
A1. Yes, the reform legislation equalizes the 3 month time period for continuation of coverage for groups of fewer than 20 employees (under state law) and the 18 month period for contiuation of coverage for groups of 20 or more employees (under federal COBRA).  
 
IMPACT: States set the time period for continuation of coverage for groups of fewer than 20 employees.  Georgia continuation of coverage law of only 3 months is among the nations lowest. When unemployment is on average more than 6 months, the Georgia law encourages an increase in the number on unisureds. 
 
IMPACT: This an other COBRA & continuation of coverage options will keep up to 200,000 Georgians from becoming uninsured after job loss.
 
COST IMPACT: None.  Fully insured plans of all sizes (above and below 20 employees) have a rate manual charge built into them of approximately .75% of premium for COBRA 18 months of continuation of coverage.   In essense, small employers are paying the premium, but not getting the option to continue coverage for 18 months after job loss. This extension of coverage would not likely increase individual group premiums or the aggregate group rate manual rates.
 
Q2. COBRA & Continuation of Coverage -  Does the reform provide more affordable continuation of coverage options? 
A2. Yes, COBRA and state continuation of coverage is expensive because the out of work person has to pay the total cost of the coverage (Employer & employee contribution) at a time of financial crisis.  The reform legislation requuires insurers to offer a low cost high deductible HSA eligible plan (or an actuarial equivalent) even if the group from which the out of work person did not provide for such option
 
IMPACT: This and other continuation of coverage options will keep up to 200,000 Georgians from becoming uninsured after job loss.
 
Cost IMPACT: Provides an option up to 30% lower for those losing their jobs.  
 
Q3. Conversion Options -  Can I opt out of the Continuation of Coverage (or COBRA) and go directly to the Group Conversion Plan options?  
A3.  Yes, the reform legislation allows covered individuals to bypass or select a Group Conversion plan at any time during the continuation of coverage period.   Federal law governing COBRA allows states to provide this option.  
 
IMPACT: This and other conversion options will keep up to 100,000 Georgians from becoming uninsured after job loss.This allows individuals options for coverage after losing employment based and financially supported insurance.  This will help especially younger persons wholose their jobs to start their own business and have affordable portable permanent health insurance. This should help create a larger and more stable risk pool for those under the Group Conversion coverage.
 
Q4. Affordable Conversion Options - Does the reform provide more affordable conversion options?
A4. Yes, instead of the traditional conversion to an individual policy following "continuation of coverage" the reform legislation provides for a Group Conversion Plan with three options (1) an HSA eligible plan option, (3) a Comprehensive Major Medical plan, and (3) another more linited coverage plan.  All three otions must qualify as creditable coverage. 
 
IMPACT: This and other conversion options will keep up to 100,000 Georgians from becoming uninsured after job loss. The HSA eligible plan option is better coverage and can be 10-30% lower cost than traditional conversion plans.  
 
Q5. Group Conversion Policy - Is there a way for me to keep the plans and services of the insurers group operation?
A5. Yes, the reform legislation provides for a special "Group Conversion Policy" allowing persons to stay within the insurers group operation.  A special quasi-group is established for individuals coming into the conversion plan from either COBRA, state continuation of coverage, or directly from the group plan.  
 
IMPACT: This and other conversion options will keep up to 100,000 Georgians from becoming uninsured after job loss. Portability of a group plan coverage unrelated to a specific job but coverage and services provided within the group line of business. Insurer group operations are typically much larger and provide more plan design options, wellness services, disease management programs, and health literacy support. The availability of a Group Conversion Plan be easier and less costly for administrative expenses.  It will provide a better healthier risk pool with lower claims than traditional indvidual conversion plans.
 
Q6. Individual Policy Rescissions - Does the reform limit how my coverage can be rescinded after underwriting and acceptance?
 A6.  Yes, under the reform legislation coverage can not be rescinded once enrolled except fpr fraud and intentional misrepresentation. Your plan can not be cancelled without prior notice. 
 
IMPACT:  This and other aspects of reform will allow up to 300,000 additional individual to get and retain coverage. Once covered your coverage will continue unless there is fraud or misrepresentation. 
 
Q7. Renewal Options - Will reform help with plan options if my individual health polciy gets a rate increase or can no longer afford the plan I purchased?
A7. Yes, the time period for you to choose another plan with the same or lesser benefits is expanded from 60 days prior to renewal to 60 days prior and 30 days after the rate renewal.  In addition, the same notification and option to change plans is provided when there is no rate increase. The policyholder selecting a change in plans will not be subject to pre-existing conditions.
 
IMPACT: This and other aspects of reform will allow up to 300,000 additional individual to get and retain coverage. Even though a plan premium is not increasing, the individual may not be in the same financial position to afford continuing with the coverage.  The reform legislation will allow more individuals to get and keep affordable options at renewal.
 
Q8. Closed Block Options - Will reform help with plan options my the insurer stops selling the plan I purchased? 
 A8. Yes, sometimes a policy form is discontinued or sales are halted in favor of a new policy form.  In those cases, the closed block of business could experience anti-selection and larger rate increases because new lives are not being added to the risk pool. The reform legislation requires notification if an insurer discontinues a policy form and allows a period of 90 days for a policyholder to change to another equivalent plan without being subject to preexisting conditions. 
 
IMPACT: This and other aspects of reform will allow up to 300,000 additional individual to get and retain coverage.  The reform legislation will allow more individuals to get and keep affordable health insurance.
 
Q9. Tax Dependent Children thru Age 26 - Can college students stay on a plan while going to school and working part-time?
A9.  Yes, the reform legislation recognizes that many college students must work or co-op in order to pay for college costs.  The reform requires children to be tax dependents.  They can be kept under an employees coverage through age 26.
 
IMPACT:   This and other aspects of reform will allow up to 300,000 additional individual to get and retain coverage.
 
Q10. Pre-existing Conditions - Are pre-existing conditions covered after a certain time?
A10. Yes, the exclusion of any pre-existing condition must be covered after 12 months from the date of issue of the policy.
 
IMPACT:  This and other aspects of reform will allow up to 300,000 additional individual to get and retain coverage.
 
Q11. Continuation of Coverage Above Age 55 - If I lose my job at age 55 or older can I retain coverage until Medicare?
 A11.  Yes, the reform legislation lowers to age 55 the existing Georgia law that allows individuals to have continued coverage to Medicare or other options for insurance if they ar age 60 or older.  
 
 IMPACT: This and other aspects of reform will allow up to 300,000 additional individual to get and retain coverage.
 
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