An Employer COBRA Quiz!

Since one of my favorite game shows is Jeopardy, it stands to reason that I just love quizzes.  Since I know that many of you also love Jeopardy, lets play round one with the only subject being COBRA.  You do not need to answer in the form of a question.

Q:. Can Continuants receive the same benefits they had while an active employee?

A: Continuees can have the the same benefits that are available to active workers. If an employer decides to change for active workers, then the new offerings must also be available to COBRA particpants.

Q: Can the COBRA spouse of a participamt continue on COBRA after divorce?

A: No.  If the husband was not on the active coverage, and he was added to COBRA after it started, then he is not eligible for a second qualifying event.

Q:  What are some common COBRA mistakes?

A:  They can include:

*Not sending the Initial Right Notice

*Not sending the Qualifying Event notice

*Not maintaining accurate archives

*Making a decision simply because it “feels right”

*Making exceptions

*Not maintaining an accurate, up to date policy and procedure manual

*Overlooking the COBRA continuants at annual enrollment

Q: Should an HR Manager answer an inquiry regarding COBRA prior to obtaining all the facts and answers?

A:  No.  This one is a trick question.  Anything the HR/benefits manager says before reviewing the worker’s COBRA files may be inaccurate, and that’s a compliance liability for the employer.  Many things changed in the COBRA world in 2004, especially with coverage election and general notice letters. The new regulatory guidelines improved, in part, how an employee was required to notify an employer about a qualifying event, such as a divorce or a child who is no longer eligible for coverage as a dependent.

For more information, please refer to www.dol.gov/ebsa or contact our office at (888) 474-6627.

Thank you for playing!

 

 

ARRA Subsidy Not Extended

ARRA Subsidy Not Extended

For people laid off from their jobs prior to May 31, 2010, the Federal Government has picked up 65% of the cost to pay for health insurance premiums.    Under the federal COBRA law, a laid-off worker can stay on his employer’s plan a total of 18 months, but the employee must pay the entire cost of the coverage. The COBRA subsidy – initially part of the 2009 stimulus package – provided the majority of the premium costs for people who lost their jobs, and thus made it possible for many to retain their health coverage.

Starting June 1, 2010, the newly unemployed aren’t eligible to get the subsidy at all. The proposal to extend subsidies to those laid off through the end of the year is languishing in Congress, a casualty of worries about the deficit in an election year.  Congress extended the subsidies four times since February 2009, but the latest effort stalled before the Memorial Day recess. Congress may again consider extending the subsidy when members return next week, but it’s unclear how long such a proposal would take to make its way through Congress and what support there would be for it.

So what you do now if you are newly unemployed?

  • Remain on COBRA, paying the full cost;
  • Condsider state HIPAA eligible plans; each state offers one for people with pre-existing conditions whose coverage on COBRA has expired.  The premiums are often very expensive, and in order to qualify people must meet exacting criteria- They must have had COBRA for 18 months, have been covered the entire time, have a pre-existing condition that would preclude them from getting other coverage and must be able to pay the higher premium such a plan would charge;
  • State Funded assistance plans such as Medicaid or Healthy Families (subject to qualifications);
  • Individual plans, it is suggested that you price the plans available in the marketplace to determine if one may be more affordable than COBRA. 

You may be able to combine any of the options above, for example, individual plans for some family members and COBRA for others.

One option we do not suggest is not having any health coverage.  In the event of an illness or accident, you are exposing yourself to a great financial risk.  This would be far more expensive in the long run.

The future of the subsidy is in doubt.  Should the ARRA subsidy be extended again, we will advise.