- You must be involuntarily terminated from your current employment from September 1, 2008 to April 30, 2010.
- You must not be eligible for other group health coverage such as a spouse's plan or Medicare.
- You must otherwise be eligible for COBRA coverage either through the federal regulations or your state regulations.
You will pay 35% of the COBRA premium. There is no premium reduction for periods of coverage that began prior to February 17, 2010. The premium reduction will generally last for 9 months unless extended by the government. Your past employer will pay the other 65% and get a tax credit from payroll taxes.
If you are receiving the subsidy you must notify the plan administrator if you become eligible for coverage under another group health plan or Medicare. Failure to do so can result in a tax penalty. If you become eligible for another group plan and the plan is not as comprehensive or you do not want to change you can keep the COBRA coverage but you will lose the subsidy.
STATEMENT - I must be offered COBRA.
ANSWER - Most COBRA requires continuation coverage to be offered to qualified covered employees, their spouses, their former spouses, and their dependent children when group coverage would otherwise be lost due to certain specific events. COBRA generally applies to all group health plans with at least 20 employees covered or by all state and local governments. The COBRA premium will be 102% of the costs that both you and your company paid unless you qualify for the subsidy.
STATEMENT - I'll get another job with group insurance.
ANSWER - Most corporations today are very sensitive to their health care insurance costs. Their group health care plan only has to take you IF the company agrees to HIRE you. Companies are doing screening for drugs, but, at the same time, they are checking your health history. Many companies will simply NOT hire unhealthy people. Why should they? All that is doing is driving their health care costs up for everyone else in their company.
STATEMENT - I need to stay on COBRA because I'm uninsurable, what can I do?
ANSWER - If the rest of the family is healthy, get them off of COBRA and on their own plan. Each qualified beneficiary can elect whether or not to stay on COBRA. You have an election period of at least 60 days (starting on the later of the date you are furnished the election notice or the date you would lose coverage) to choose whether or not to elect COBRA.
STATEMENT - I (or the sick family member) must be covered after COBRA expires.
Answer - HIPPA laws guarantee that you or your family be covered but does not control the premium. The HIPPA rates will average around THREE TIMES the premium for healthy people and start at around $1000 per month. In addition, you usually don't have a large choice in plans. There may not be prescription drug coverage or doctor's visit co-pays included. A monthly health care HIPPA premium upwards of $1000 per person is essentially "no insurance" for most folks.
Get out your calendar and mark 18 months from the day your group coverage ends. If you must go on COBRA this is generally how long you can stay on it.
We'll be able to give you options, give us a call.
For more information please visit this government website.
