Personal Injury Protection, or PIP, is a type of auto insurance. Generally, PIP is used to cover someone injured in an accident regardless of any fault. Understanding PIP can be the difference between being adequately covered for an accident, and being under insured.
Functions
1. PIP insurance pays for medical expenses in the event of an auto accident. As the name implies, the insurance is personal, or for the person who has the insurance. In other words, it is not used to pay another person for medical claims that you are liable for, nor vice versa.
Benefits
2. The primary benefit of PIP insurance is that it does not matter who is “at fault” for an accident. Thus, a person’s medical expenses are immediately eligible for payment regardless of whether or not the other party in the accident has insurance, or if that party is or is not at fault.
Considerations
3. Some states require PIP insurance by law. In other states, such coverage may be optional. When required by law, it is generally due to the state having a “no fault” system for accidents. In this system, a person’s injuries are paid for by his own insurance and not the party at fault for having caused the accident. Theoretically, this leads to less fraud, lawsuits and unpaid claims. There is a general disagreement on whether this is actually the case or not. Misconceptions
4. PIP insurance is not used to cover any liability. Thus, having 100,000 dollars of PIP does nothing to cover your liability should an accident which is your fault cause you to owe someone for medical expenses. PIP has nothing to do with your regular medical insurance coverage. Depending upon the state, your PIP will cover your injuries from an auto accident up to the amount of coverage, and then your health insurance would cover the rest.
Geography
5. The following states require PIP coverage: Delaware, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Utah and Texas.
Considerations
6. In states in which PIP coverage is optional, it is necessary to contact your medical insurance provider to determine what, if any, restrictions they have on paying for injuries sustained in an automobile accident, and then purchase PIP insurance to cover any deficit.
Premium Assistance for COBRA and State Continuation Coverage Extended to Cover Workers Involuntarily Terminated Through February 28, 2010 and to Last for 15 Month Maximum (see below)
COBRA
The COBRA law generally applies to group health plans maintained by employers with 20 or more employees in the prior year. The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.
When an employee loses his or her job, employers subject to COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) or any State continuation coverage law (also known as “mini-COBRA” laws), must offer the employee and any family members covered by his or her group health plan (qualified beneficiaries) the opportunity to purchase the insurance coverage. However, many unemployed individuals and family members cannot afford the cost of the continuation coverage. As discussed below, the American Recovery and Reinvestment Act of 2009 (ARRA) provides a 65 percent subsidy covering the cost of premiums for all involuntarily terminated workers and related qualified beneficiaries.
COBRA Continuation Coverage Assistance Under ARRA
The American Recovery and Reinvestment Act of 2009 (ARRA), as amended on December 19, 2009 by the Department of Defense Appropriations Act, 2010 (2010 DOD Act) provides for premium reductions for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. To qualify, individuals must experience a COBRA qualifying event that is the involuntary termination of a covered employee’s employment. The involuntary termination must occur during the period that began September 1, 2008 and ends on February 28, 2010. The premium reduction applies to periods of health coverage that began on or after February 17, 2009 and lasts for up to 15 months.
COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice.
The landmark COBRA health benefit provisions became law in 1986. The law amends the Employee Retirement Income Security Act of 1974 (ERISA), the Internal Revenue Code and the Public Health Service Act (PHS Act) to provide continuation of employer-sponsored group health coverage that otherwise might be terminated
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