by cordeg » Thu Feb 14, 2013 02:07 am
I am self-employed and provided my own health insurance through a "group-of-one" business plan. My wife just took a full-time job and it provides health insurance of equal or better coverage. I cancelled my business plan to accept coverage as a spouse under her insurance. However, the carrier informed me that this cancellation must be entered as of the 1st of the (any) month, and wanted to know if I wanted it cancelled as of the beginning of this month or next month. My wife's coverage began the 7th of this month. So, I can either have a 3-week overlap in coverage or a 7-day gap in coverage. The refund resulting from the latter choice would be significant. We required only an inexpensive ($28) prescription during that 7-day period, which I can have corrected (charged back to me).
Is there any down side to having a 7-day gap in coverage in order to get the refund, or must I accept the cost of the overlapped coverage? I know that there is a rule about not having a gap of more than 63 days to avoid pre-existing condition issues, but I don't know if there are any additional constraints that might bite me in the end if I cancel the policy as of the earlier date?
Is there any down side to having a 7-day gap in coverage in order to get the refund, or must I accept the cost of the overlapped coverage? I know that there is a rule about not having a gap of more than 63 days to avoid pre-existing condition issues, but I don't know if there are any additional constraints that might bite me in the end if I cancel the policy as of the earlier date?
Posted: Thu Feb 14, 2013 12:39 pm Post Subject:
Is there any down side to having a 7-day gap in coverage in order to get the refund
You've already answered your own question. If you had no claims (other than a $2 prescription copay), you have no claims, and there is no downside to cancellation. You just can't cancel and submit a claim -- but you already knew that.
As for your $2 copay. you will actually have to reimburse the insurance company for the full value of the prescription minus the $2. I think you already knew that, too.
I know that there is a rule about not having a gap of more than 63 days to avoid pre-existing condition issues
This has absolutely no bearing on your matter. Under HIPAA, you are entitled to immediate coverage as a dependent under your wife's employer-sponsored plan. Any preexisting condition exclusion period is reduced by the duration of "creditable coverage" you had under your previous plan. So if the employer-sponsored plan would not cover a preexisting condition for 6 months, and you had coverage under you business group plan for more than 6 months, you have satisfied the preexisting condition exclusion, and you have full and immediate coverage.Add your comment