Losing Credit for Time Served

Posted on February 23, 2012. Filed under: Individual Life & Health | Tags: , , , , , |

My parents taught me a lot of wonderful things. Things like the importance of being kind, respectful, and hard-working. I’m very thankful for those lessons. But, I’m also thankful they took the time to educate me about the importance of practical things, like how to balance my checkbook and to never let my health insurance lapse.

My very first “real” job after college was in a bank. I was always shocked when parents would bring their kids in, just before heading off to college, to open up their FIRST bank account. We would take as much time as possible to explain how to balance a checkbook, to never rely on a balance pulled at the ATM (especially if you might have written checks that haven’t cleared), etc. But we knew the vast majority of these kids would show up on our insufficient funds list within a month or so. And the parents never understood why. Or, they simply refused to admit they had not properly prepared their child for one of the basic realities of adulthood.

The same is often true for health insurance. It tends to be one of the things people take for granted, especially when they are healthy. And many parents simply don’t educate their kids on the importance of maintaining coverage. It should be one of the things that is always worked into a budget. But often ends up being cancelled because it’s considered unaffordable.

The problem with not maintaining health coverage is that once you’re sick, you may not be eligible for it. Like car insurance, you can’t buy it after the accident happens. And even if you are eligible, if you have not maintained your creditable coverage status, you may have to satisfy waiting periods (for up to 12 months) for pre-existing medical conditions.

So, how do you ensure you don’t lose your continuous coverage status?

  • Avoid breaks in coverage of more than 63 days. Even if you’ve had continuous coverage for years, a break in coverage of more than 63 days can negate all of it and put you right back to square one.
  • It’s also good, if you change insurance providers, to make a point of providing the new insurance company with the certificate of coverage your previous provider(s) issues (confirming your last 12 months of coverage, at a minimum).
For more information, visit the Department of Labor’s FAQ.

Contact us for quotes.

Image: Stuart Miles / FreeDigitalPhotos.net

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