COBRA continuation coverage gives you the chance to buy and maintain your current group health coverage for a defined period of time if you are laid off or have your work hours reduced below the level for receiving benefits.
The length of continuation coverage depends on the reason for your loss of group coverage. COBRA generally covers health plans of businesses with 20 or more employees, employee organizations, and state or local governments.
You must meet certain application deadlines and other conditions, such as payment schedules, to maintain coverage under COBRA. COBRA can also help you avoid a gap in coverage if you change jobs and are not immediately eligible for coverage in your new company.
For more information about COBRA, contact your nearest office of the Pension and Welfare Benefits Administration of the Department of Labor.
Your state may also have a law that requires insurers to continue group plan coverage to individuals who lose their medical coverage for various reasons. Check with your state insurance commissioner’s office.
9. What are tax-exempt accounts for medical expenses? How might they help me?
A flexible spending arrangement (FSA; sometimes called a Flexible Spending Account) is a benefit provided by some employers that offers a way to help pay for out-of-pocket medical expenses, while reducing the employee’s taxable income.
With FSAs for health-related expenses, you choose an amount of pre-tax dollars to be set aside from your paycheck each pay period. This money is then available to reimburse certain health-related expenses that are not paid any other way, such as by insurance.
You may need to supply documentation from a physician or other health care provider that the treatment is medically necessary. Note that the IRS does not allow the same expense(s) to be both reimbursed through an FSA and claimed as a tax deduction.
Another type of tax-exempt benefit for health-related expenses is a health savings account (HAS). Set up by Congress in December 2003, HSAs allow some individuals who participate in a high-deductible health plan to save money in a tax-free account. If you are eligible, you can use these savings to pay for your future medical expenses or those of your spouse or dependents. The IRS has publications with more information about FSAs and HSAs. The Department of the Treasury also has a direct link to information about HSAs on its web site.
10. Does the Federal Government have resources that might help me financially with my health-related expenses?
Currently, Federal health assistance programs are not set up to assist with alternative medicine expenses.
They are intended to provide either direct support (direct payments) or indirect support (such as housing or child care credits, medical care at public clinics, or other social services) to people whom the Government determines to be in need. Examples include people who:
- Have a low income and limited resources
- Do not have other medical insurance
- Have a disability
- Are part of a population that has difficulty accessing medical care
- Are at least 65 years of age
- Have served in the military
11. Are complementary and alternative medicine services deductible on my income tax?
As of 2002, the IRS allows a limited number of deductibles for complementary and alternative services and products.
12. Can you suggest any other resources?
If treatment (whether complementary / alternative medicine or conventional) for a disease or condition creates a financial crisis for you and your family, you may wish to try the following for more information:
- If you receive care at a hospital or clinic, that facility may have a social worker or patient advocate who can advise you.
- You may also find it helpful to contact nonprofit organizations that work on your disease or medical condition (try an Internet search or check directories at your local library).
Source: Consumer Financial Issues in Complementary and Alternative Medicine, National Center for Complementary and Alternative Medicine (NCCAM). http://nccam.nih.gov/health/financial/
