COBRA Information

Question:

Need clarification as to status of unemployment for Stimulus/Cobra coverage possibility. Terminated March 2008 but received severance pay equal to 26 Forward Weeks of Salary.

Does this qualify for the September 2008 start of unemployment stated in the Stimulus proposition? Thank you

Answer:

The subsidy is only available for those who are involuntarily laid off between September 1, 2008 and December 31, 2009. Those who have lost their jobs before September 1, 2008 unfortunately do not qualify for the COBRA subsidy. You do, however, still qualify for COBRA continuation coverage without the subsidy.

Don't cancel or decline COBRA just yet, but compare your options in the individual health insurance market first. Many find much lower rates and more customized coverage with an individual plan.

And because COBRA is only a temporary coverage solution, it's a good idea to compare your options now. You might be surprised how affordable individual coverage can

Question:

I was recently laid off from a very small company. I am afraid that if I request the 65% COBRA subsidy, the company will have to absorb the cost in the short term which will hinder it from using the money in more productive ways. They are in very dire straits and I don't want to create a financial hardship for them. How can I do this?

Answer:

It's true that your former company will have to await reimbursement from the government in the short-term. Ultimately, you may have to decide if you want to keep your health insurance coverage under COBRA or help your former company financially by opting out of COBRA.

Another option is to search for a health plan on your own in the individual health insurance market. This way, you won't have to create the financial hardship and find health coverage for yourself.

Keep in mind if your company was considered a small business, then you might unfortunately not be eligible for COBRA. Only employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year are subject to COBRA.

Question:

If you are terminated for just cause are you eligible for the cobra stimulus package?

Answer:

You are eligible for the stimulus if you lose your job involuntarily. The only catch is a provision in the law that states former employees can only be excluded from COBRA eligibility if dismissed for a "gross misconduct."

Question:

My spouses last day of employment was 02/27/2009, (downsizing & layoff). Can he be denied COBRA, by his previous employer, based on the fact that I am employed and have the option of adding him to my coverage? I have always maintained healthcare coverage for myself only.

Answer:

No, he cannot be denied COBRA. But your husband does have the option to hop on your plan if he chooses under the federal law known as HIPAA. According to HIPAA, your husband has the right to "special enrollment" in your employer's plan as long he had insurance when he previously declined your employer's coverage.

Question:

In 11/08 I left a job with full benefits to relocate with my husband. As I am using my Cobra benefit with medical only in my state of relocation, I find that I am forced to pay [more than $400 per] month to my previous employer and can only receive out of network benefits with high deductibles and 40/60 coverage. They have no in network providers in my state, they say. I have been unable to find employment so far and it is looking like I will have to take per diem work without benefits. I am 62.5 years old.

Is there any help for me in this new Cobra plan?

Answer:

Yes, you can have 65 percent of your COBRA subsidy paid for by the government for up to 9 months. Contact your previous employer and ask how to enroll for COBRA continuation coverage.

As an alternative option, consider a short-term health plan found in the individual market from a private insurance company (for example: Aetna, the Blue Cross and Blue Shield of Illinois, or UnitedHealthcare). A temporary plan might be the right health plan to bridge you into Medicare enrollment.

But because there are some restrictions when it comes to these kinds of plans, itýs very important to discuss your options with an insurance advisor. Theyýll help you find the best plan for your situation and they can walk you through the whole process.

Question:

I was let go on February 3rd but my employer graciously extended my health insurance six months as part of the severance package.

My understanding is that until the health insurance is notified of your termination they continue to view you as employed. The reason this is important is that COBRA will not accept your claim after you are terminated.

How and when do I best apply for COBRA Health Insurance?

Also, how do I make sure that the Federal government pays 65% of my premium for up to nine months of my COBRA insurance?

Thank You in advance for answering these questions.

Answer:

Once your six-month extension has expired, you will be eligible for COBRA continuation coverage. Your former employer is legally required to notify you of your right to COBRA and will keep you enrolled in their plan.

Keep in mind that you don't apply for COBRA health insurance -- COBRA is simply a federal law that gives you the right to keep your former employer's coverage after a job loss.

As for your 65 percent subsidy, you'll pay your 35 percent to your former employer/health plan administrator and they'll be reimbursed by the government for the rest.

Question:

My employer is going out of business and has only 14 employees -- will his employees be eligible for COBRA? I heard that employees of small businesses are not eligible! That can't be true!

Answer:

COBRA law states that employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year have access to COBRA. Unfortunately, for employers who don't meet these requirements, its employees do not have access to COBRA continuation coverage.

Question:

Hello,

I have a question. My husband's employer is moving to Mexico as soon as the war down there calms down. In the meantime they have cut everyone's hours to the point they can't afford to pay their bills, but are not laying off until they are ready to make the move, leaving everyone broke and struggling.

It has forced my husband into early retirement because that is the only way we can pay most of our bills. Then we were told, if we want to keep our insurance the COBRA is going to cost us [almost $800] a month. This payment will kill us. I will be eligible for Medicare in two years, my husband in three.

Will the COBRA subsidy cover our situation?

Answer:

You will be eligible for the 65 percent subsidy for up to 9 months. Your husband's former employer is required by law to inform him of your eligibility for COBRA continuation coverage. You will only, though, have to pay 35 percent of your premiums to your husband's plan administrator, who will then be reimbursed by the government. You do not have to front this money.

Have your husband contact his former employer to get your COBRA continuation coverage set up.

Question:

Does a person qualify for a COBRA subsidy based on the date their health insurance plan ended at their former job, or is it based on when you left the job? Sometimes these two dates differ. Thank you.

Answer:

Typically, a person qualifies for COBRA when your health plan ends, even if you are still employed. Your employer is legally required to inform you of your COBRA options within 30 days of plan's end. If your employer lets you keep your coverage for temporary period of time, COBRA continuation coverage and the government subsidy begins when that temporary period ends.

Question:

I currently have COBRA from a previous employer. My COBRA ends May 31st and I will need to find new individual health coverage.

I was told that as long as you can prove that you had creditable coverage you automatically qualify for new individual health insurance without having to go through the underwriting process. Obviously with the understanding you will be paying regular premiums as you did when you were with COBRA.

Also. Are there specific rates regarding individual coverage under HIPPA if for some reason an insurance company does deny you for an individual policy.

Answer:

When you search for an individual health plan, your pre-existing health conditions are guaranteed to be covered if you have exhausted your 18 month COBRA continuation coverage under HIPAA. If you look for an individual plan on May 31, you actually would be subject to an underwriting process, and may have pre-existing conditions excluded.

As for individual coverage under HIPAA, yes, health insurance companies can charge specific rates and offer specific plans for HIPAA-eligible applicants. Many times, though, these HIPAA plans are very expensive.

If you're healthy now, it may actually make more sense to find individual health insurance coverage rather than choosing COBRA in the first place. Why?

An individual plan may cost less than a COBRA premium even with the subsidy
If you stick with COBRA then develop a condition during that period, you have to choose between buying an expensive HIPAA plan or getting the condition excluded when your COBRA coverage ends

Question:

Hi.....when will the new program of the government covering 65% of COBRA go into effect and when it does how would a person go about getting the benefit?

Answer:

The subsidy is in effect right now. To get this benefit, all you have to do is accept COBRA when your former employer notifies you of your right to continuation coverage. Your former employer/former plan administrator can fill you in on the details of exactly how you should make your premium payments.

Generally speaking, you simply pay 35 percent of the COBRA premium to your former employer/former plan administrator and they take care of the rest.

Question:

I resigned this month but am covered through my current health insurance through the end of March. I plan to travel to Australia leaving this month and returning in mid-April after my COBRA coverage will begin. I know Blue Cross Blue Shield, my current insurance carrier, does cover international travel. Will COBRA as well? Do I need to specifically request this when I elect COBRA coverage to begin on 1 April?

Answer:

Yes, the COBRA coverage you receive must -- by law -- provide the exact same benefits as your former employer's plan. So if you have international coverage with your former plan, your coverage under COBRA will as well.

Remember: COBRA isn't a type of health insurance plan -- it's a federal law that gives you the right to continue your previous employer-sponsored coverage after you discontinue your employment.

If you'd like to check to make sure about your benefits, talk to your former plan administrator to confirm international travel is covered.