According to the non-profit Kaiser Family Foundation, federal law mandates that companies with two to 50 employees must be issued health insurance no matter what, which is called a guaranteed issue. (Federal law does not mandate that individual employees are guaranteed issues.) Therefore, working for a company with a group health insurance plan is the best bet for someone with a preexisting condition, since that person may be denied if he or she sought health insurance on their own, Lehrman says.
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Another way to get health insurance is for a person to be hired at a company with a group plan, quit their job, and then sign up for COBRA (Consolidated Omnibus Budget Reconciliation Act) health insurance, which will cover a former employee (or a retiree or a former employee’s spouse or dependent children) at a group-rate after his or her employment has ceased. An employee is eligible for COBRA as soon as the employee becomes eligible for their employer’s group health coverage, a date which varies by company. COBRA coverage typically lasts for 18 months but can extend up to 36 months depending on the circumstances.
When an employee is covered under an employer’s group health care plan, the employer usually pays for a percentage of the employee’s health care coverage, says Amy Turner, senior advisor with the Labor Department’s Employee Benefits Security Administration. Under COBRA, however, the former employee incurs the full cost himself or herself, plus an administration fee. The former employee cannot be charged more than 102% for the cost of coverage per federal law.
