Lisa Zamosky is a health care writer.
The majority of Americans get their health insurance at work.
As of April, unemployment rates rose to a 26-year high of 8.9 percent, and more than 500,000 additional workers lost their jobs.
Do the math and you come up with an awful lot of Americans losing their health insurance coverage, if they had any at all.
Options
There are a number of options (not necessarily good ones) available to people who have lost their job and are looking to hold onto health insurance. The Consolidated Omnibus Budget Reconciliation Act, known as COBRA, is one such option. Others will be covered in future columns.
COBRA safety net
COBRA gives workers of companies with 20 or more employees the right under federal law to continue group health benefits for up to 18 months after losing their job. If you’re disabled and waiting for Medicare coverage to kick in, you may be eligible for an extension.
COBRA is especially important for people with a pre-existing health condition who would be hard-pressed to get coverage in another way. People with health problems do sometimes get coverage in the private insurance market only to find that they are not protected for the very condition for which they most need coverage.
COBRA is a great federal law protecting workers, but it’s pricey. Typically, you’d be expected to pick up the cost of the entire premium - both what you were paying and the part your employer was paying - plus a 2 percent administrative charge. A better and cheaper option, if available, is to join your spouse’s work-sponsored health plan.
Recession relief
Here’s some good news: Because of the American Recovery and Reinvestment Act, enacted in February, you may be eligible for help paying for typically expensive COBRA premiums.
Under the new law, if you lose your job between September 1, 2008 and December 31, 2009, and don’t qualify for coverage under another group plan or Medicare, 65 percent of your COBRA premium will be picked up by the federal government for up to nine months.
If your income is between $125,000 and $145,000 or you file jointly and make $250,000 and $290,000, you will have to repay a portion of the assistance through taxes. If your income is even higher, you’ll be required to pay it all back.
Getting started
Look for a package of information from your employer in the mail explaining how you can continue your benefits under COBRA. It should also contain information about the federal premium assistance program.
Be sure to get your paper work in within 60 days of losing your job to secure coverage. Also critical, says Cheryl Fish-Parcham, deputy director of health policy with Families USA, is to find out where to send your premium payment.
“You may not get another bill telling you that your premium is due. If you don’t pay on time, you could lose coverage,” she warns.
If you didn’t initially choose COBRA after losing your job, you’ll get another 60-day period to elect coverage. Your former employer had 60 days after the law was enacted to send you a notice.
You have an additional 60 days to enroll in COBRA after that. If you run into any problems or have questions about enrolling in COBRA with premium assistance, contact the Department of Labor at 1-866-444-3272.
Other details
If your company closed its doors and no longer offers group benefits, COBRA doesn’t apply. However, in some states, said Fish-Parcham, there is a provision called conversion.
This guarantees you access to other health plans; your current health insurance company has to offer you an individual plan, even if you have a pre-existing condition.
Also check with your state’s insurance department to learn about your rights to coverage under the Health Insurance Portability and Accountability Act (HIPAA).
If your job was shipped overseas, a tax credit to help cover COBRA’s cost may be available to you. If you qualify, 80 percent of your COBRA costs will be covered. But don’t wait for someone to contact you.
Check with the Department of Labor for information on the Trade Adjustment Act, or ask about how you can apply at your local unemployment agency.
Hang On
Losing your job is scary and taking on the additional cost of a COBRA plan is particularly challenging at a time when your finances are at a low point, even with the new government assistance available.
But, I really encourage you not to skimp on healthcare coverage, if possible. Having health insurance can save your finances and your life if a medical problem occurs.
And, if you’re without health insurance for more than 60 days during the 12 months before taking another job, your new employer can refuse to cover a pre-existing illness for up to one year.
Best of luck!
If you have a health care question you’d like help answering, please send your query to Lisa at lisa@writtenarts.com.
Lisa Zamosky is a writer specializing in health care and a former executive who worked for years in the health insurance industry. Visit her online at Writtenarts.com. E-mail Lisa at lisa@writtenarts.com. Follow Lisa on Twitter:@lzam
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Comment by: Health insurance: COBRA for laid off workers | 2Dinternational.com Posted: June 5, 2009, 5:59 pm
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Comment by: Losungen Posted: June 6, 2009, 1:14 pm
The “catch” to qualifying for federal assistance in paying COBRA premiums, is you must prove you are otherwise ineligible for other insurance. Very few will find relief here.