YOU ASK:

If I go on short term disability can I keep my health insurance?

WE ANSWER:

In the past, health insurance companies were allowed to cancel a policy within its effective date if the insured gets sick and files a claim against the policy. This was standard practice in the insurance industry.

But this will be a thing of the past once President Obama's Health Care Reform Bill becomes fully implemented. It provides those who have health insurance policies with a certain level of consumer protection. One of these consumer protections would be that insurance companies would no longer be able to cancel their customer's health insurance policies due to a change in medical condition during the time the policy is effective.

So, yes, when the Health Care Reform Bill fully kicks in, you can expect to hold on to your health insurance policy even as you go on short term disability. You can also be assured that when it is time to renew your health insurance, it will not count your short term disability as a pre-existing condition and exclude it from the health insurance coverage.

Please note that short term disability insurance and health insurance cover different things.

  • Short term disability insurance helps by providing you with a portion of your income while you go on short term disability and are unable to earn an income. The proceeds of the insurance may be used for medical expenses, but this will really depend on the priorities of the recipient.
  • Meanwhile, health insurance pays for your medical bills for covered illnesses or injuries. The payments are usually made directly to the hospital or to the health insurance provider. If the insurance is on a reimbursement basis, you will first make the payments and then apply to the insurance company for reimbursement.

When you consider the possibility of a short term disability due to an injury or an illness, it would help to have both health insurance and short term disability insurance. That way, you have the means to pay for your hospital bills and prescription drugs and the ability to pay your household bills. The fact that you don't have to worry about these will surely help hasten your way to recovery.

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