Health Insurance and The Law - COBRA

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Author	Topic: Health Insurance and The Law - COBRA
farmhaus White belt	posted 08-10-1999 09:12 PM COBRA is an acronym for the law which imposed health insurance continuation requirements on employer health plans. It covers employees who lose their jobs for any reason and in certain other circumstances. It gives affected employees the right to continue their health insurance for up to 18 months at their own expense plus a maximum 2% increase in the premium. If you work or worked for a company with 20 or more employees and were covered under a group health plan, you must be notified by your employer that you are eligible for COBRA continuation coverage. You have 60 days after the end of your existing coverage to elect. I strongly suggest that you elect coverage unless you have coverage under another plan. More detailed information can be obtained from the IRS(you'll need to browse), http://www.irs.ustreas.gov , or the Department of Labor, http://www.dol.gov/dol/pwba . IRS Notice 98-12 available on their ftp site is an excellent source of information also and everyone should download a copy for reference. http://ftp.fedworld.gov/pub/irs-irbs/irb98-05.pdf ------------------ [This message has been edited by farmhaus (edited 10 August 1999).]
Timlynn_Babitsky Black belt	posted 08-12-1999 06:04 PM For whatever reason, some companies don't seem too eager to let you in on the COBRA option. It was a kind of off-hand, by-the-way piece of information shot at us amid the stack of exit forms and paperwork. Luckily we caught it and signed right up to get that COBRA coverage. EXPENSIVE!! You bet. Worth it? You bet! The cost of health care in this country is obscene. Just one hospital event can wipe you out if you aren't covered by decent health insurance. And as Tom notes elsewhere, if you take COBRA then switch to a personal policy, your new carrier cannot withold coverage for pre-existing conditions. The typical "waiting period" for not covering those pre-existing conditions can be a year or longer.
Timlynn_Babitsky Black belt	posted 11-10-1999 02:20 PM A new community member wrote this in his e-mail this morning: the COBRA application requires that you still have the same address to apply. We almost moved before I got around to doing the paperwork... It amazes me how much we are at the mercy of megacorps and gov'ts... Is an address change a show stopper in terms of getting coverage? How can you get around this?
farmhaus White belt	posted 11-12-1999 03:36 PM As far as I know there is no requirement that a Cobra beneficiary have the same address in order to apply. There is a notice requirement imposed on the employer and as long as the employee or other Cobra beneficiary notifies the employer of the new address then the notice will have to be sent to the address of record. The employer should be notified of any address change anyway in order that W-2 forms etc.be sent to the correct address. ------------------
Timlynn_Babitsky Black belt	posted 01-05-2000 04:59 AM A community member sent us a note today that has us quite concerned: She is closing a company and was told by MAMSI of NC that because the company is closing, COBRA is not an option for herself or her employees. Now relocated to Virginia and setting up a personal policy with Blue Cross, she finds that they require a waiting period of 6 months for maternity coverage (i.e., a pregnancy occurring within the first six months would not be covered at all). We want to know, is it true that COBRA is no longer an option for insured folks previously covered by company health insurance if that company is closing? Can Blue Cross require a waiting period for maternity coverage: a) if COBRA is an option and MAMSI is wrong, or b) if COBRA is not an option as MAMSI claims. Who out there can help us figure this one out?
farmhaus White belt	posted 01-12-2000 06:24 PM It is true that if an employer terminates it's health plan entirely then COBRA coverage also terminates. There is a narrow exception relating to bankruptcy and this only benefits employees retiring prior to the cessation of coverage. However, where an employer terminates the health plan HIPAA then comes into effect. If the employee has the requisite 12 months of prior coverage and obtains new health coverage before a break in coverage of more than 63 days then no pre-existing condition exclusions can be applied. See more about HIPAA in another topic in this forum
Timlynn_Babitsky Black belt	posted 01-15-2000 09:01 AM Another question from an e-mail: In order to be eligible for COBRA after leaving employment (which I understand can be voluntary OR involuntary), is there a minimum one had to be employed with an organization? [This message has been edited by Timlynn_Babitsky (edited 15 January 2000).]
farmhaus White belt	posted 01-17-2000 05:24 PM Anyone covered under an employer sponsored health plan the day before a qualifying event (termination, reduction in hours, divorce etc.)is eligible for COBRA assuming the employer had 20 or more employees on a typical day in the preceeding calendar year.
Timlynn_Babitsky Black belt	posted 09-11-2000 08:22 PM Another really good question came into my in-box: How often can COBRA rates be raised. Our plan costs increased 2 times this year, are we able to pass that increase along to the COBRA beneficiaries or do we have to wait for the beginning of the new determination period. Who has the answer to this one?
Timlynn_Babitsky Black belt	posted 09-11-2000 08:25 PM Today's e-mail brought another question on COBRA: Has the law changed any re: a person's COBRA is canceled when they become eligible for Medicare? COBRA experts, please let us know... [This message has been edited by Timlynn_Babitsky (edited 09-11-2000).]
Timlynn_Babitsky Black belt	posted 09-11-2000 10:48 PM COBRA is getting some serious attention these days. Tonight's e-mail brings in this question: If you leave a job and relocate to another state, are you eligible for COBRA , or do you have to get a private policy? How is it determined what your premium will be? Who has the answer for this one?
Timlynn_Babitsky Black belt	posted 09-28-2000 02:11 PM Question: If you leave a job and relocate to another state, are you eligible for COBRA , or do you have to get a private policy? How is it determined what your premium will be? Our COBRA expert, Tom Farmer, asked us to post his reply to this one: "COBRA is available even if you relocate. However, if you are covered by a PPO or, even worse, an HMO you may find it very difficult to find any participating physicians so you may be forced to used the out-of-network provisions of your plan." [This message has been edited by Timlynn_Babitsky (edited 09-28-2000).]
Timlynn_Babitsky Black belt	posted 09-28-2000 02:13 PM Question: Has the law changed any re: a person's COBRA is canceled when they become eligible for Medicare? "Medicare: To my knowledge entitlement for Medicare causes an individual to become disqualified. However his/her dependents would still qualify." Tom Farmer (Farmhaus) [This message has been edited by Timlynn_Babitsky (edited 09-28-2000).]
Timlynn_Babitsky Black belt	posted 09-28-2000 02:22 PM Question: How often can COBRA rates be raised. Our plan costs increased 2 times this year, are we able to pass that increase along to the COBRA beneficiaries or do we have to wait for the beginning of the new determination period. Tom Farmer (farmhaus) asked us to post his reply: " 1) Increases in costs of coverage are passed on to COBRA beneficiaries plus 2% for administrative costs. However, most health plans fix rates for the plan year. If your rates were raised twice in a given plan year you should look for a new insurer. I know that's easier said than done and there are no bargains out there." Tom
Timlynn_Babitsky Black belt	posted 10-12-2000 10:00 AM Here's an excellent question from one of our members. We know that Tom is listening and his answer will post here soon. I have a question re: FMLA laws. If a person goes on FMLA the day before Thanksgiving, would that person receive holiday pay? According to the law, it goes according to the company policy and we do not have one that specifically addresses this issue. However, if a person were to be out sick for the day before the holiday, paid or unpaid, they would receive the pay for the holidays but if they had been on any type of leave that was unpaid for a period of time before the holiday, they would not get paid for the Holiday. Please let me know how we should handle this. [This message has been edited by Timlynn_Babitsky (edited 10-13-2000).]
Timlynn_Babitsky Black belt	posted 10-13-2000 10:52 AM Although this is not a COBRA question but a Family & Medical Leave Act question (FMLA) I do have some experience with this issue. Under FMLA, once an employee has been certified, the employer only has to pay for hours worked. However, if benefits accrue prior to FMLA leave they are still due to the employee. An example would be vacation days that accrue based on time worked eg. one day vacation earned for each 160 hours worked. As to the case in point, it appears that the employer has no clear-cut policy regarding payment for holidays and that needs to be corrected. The employer needs to establish a clear and non-discriminatory policy for holiday pay. For instance, if this employer required every employee to work the day before a holiday or take a paid benefit day (vacation, sick etc.) in order to be paid for that holiday then it would be okay to refuse to pay for a holiday when those conditions weren't met. In the case of FMLA, an employer is not required to pay for holidays or accrue other benefits when that person is on leave. (Health coverage must be maintained, however.) So, in this particular case I would not pay holiday pay to the person on FMLA leave unless that person was on intermittant leave. If the person was on intermittant leave holiday pay could be considered earned on the basis of hours actually worked if that was the company policy. The important thing here is to get those policies in place, communicate them in writing to all employees, and administer them in a non-discriminatory manner. I hope this helps. Tom Farmer [This message has been edited by Timlynn_Babitsky (edited 11-22-2000).]
jacquesmc White belt	posted 11-02-2000 02:36 PM quote: Originally posted by Timlynn_Babitsky: Another really good question came into my in-box: [b]How often can COBRA rates be raised. Our plan costs increased 2 times this year, are we able to pass that increase along to the COBRA beneficiaries or do we have to wait for the beginning of the new determination period. Who has the answer to this one?[/B] The law only states that what you pay is limited to what employer pays plus 2% administrative fee. There is no law that limits the insurance company's right to multiple rate increases during the year and the employer's ability to pass them on to COBRA recipients.
jacquesmc White belt	posted 11-02-2000 02:40 PM COBRA coverage and Medicare get a little weird. If you have COBRA coverage and later become eligible for Medicare (24 months after collecting SSDI benefits or turning age 65), then you lose the right to keep your COBRA coverage. However, as clarified under HIPAA, if you already have Medicare when you become eligible for COBRA continuation, then you are allowed to have them both. So it depends on which comes first.
Timlynn_Babitsky Black belt	posted 08-05-2001 07:34 PM Here's an e-mail question from a Sohodojo visitor: "MY HUSBAND AND I HAVE JUST GOT THE COBRA PAPERWORK FROM HIS OLD JOB DONE AND WE ARE NOW SEPARATED LIVING IN DIFFERENT COUNTIES OF FL. I JUST FOUND OUT THAT MY COUNTY DOES NOT HAVE PARTICIPATING PROVIDERS. THE INSURANCE COMPANY TOLD ME I COULD NOT USE OUT OF NETWORK OR OUT OF AREA DR's, HOSPITALS ETC. IS THIS TRUE? I'M PAYING FOR SOMETHING I CAN'T USE? I HAVE UHC EPO. I THOUGHT THE INSURANCE CO. HAD TO PROVIDE ME WITH SOME FORM OF INSURANCE? THEY TOLD ME I CHOSE TO MOVE NOT THEM." [This message has been edited by Timlynn_Babitsky (edited 08-05-2001).]
Timlynn_Babitsky Black belt	posted 08-05-2001 07:38 PM We're not surprised to see our COBRA Forum getting a few more questions these days. Here's a good one: "I was not given a exit interview at my job where I was fired (job elimination). They stated when I was leaving they would caring me on the policy until the end of the quarter but they have since retracted on that. I was wondering what the law states regarding an employer who does not offer COBRA, how long do they have to offer the plan, and what kind of action against them can be taken for not offering the plan? Please let me know if you can where I might find out this information?" [This message has been edited by Timlynn_Babitsky (edited 08-05-2001).]
jacquesmc White belt	posted 08-06-2001 12:35 PM quote: Originally posted by Timlynn_Babitsky: Another really good question came into my in-box: [b]How often can COBRA rates be raised. Our plan costs increased 2 times this year, are we able to pass that increase along to the COBRA beneficiaries or do we have to wait for the beginning of the new determination period. Who has the answer to this one?[/B] An employer is allowed to pass on to COBRA continuees all rate increases, so rates can be increased as many times as the employer's contract with the insurance company permits. However, the rate increase must apply across the board. They cannot give a rate increase to COBRA Continuees only. They must charge the same as they pay for all + the 2% fee.
jacquesmc White belt	posted 08-06-2001 12:38 PM Has the law changed any re: a person's COBRA is canceled when they become eligible for Medicare? The law has been clarified. If you are on COBRA and become eligible for Medicare, you lose COBRA. If, however, you are covered when Medicare when you become eligible for COBRA continuation, you may keep Medicare and continue on COBRA.
jacquesmc White belt	posted 08-06-2001 12:45 PM "I was not given a exit interview at my job where I was fired (job elimination). They stated when I was leaving they would caring me on the policy until the end of the quarter but they have since retracted on that. I was wondering what the law states regarding an employer who does not offer COBRA, how long do they have to offer the plan, and what kind of action against them can be taken for not offering the plan? Please let me know if you can where I might find out this information?" Check COBRAHealth.com for a summary of the law. The law is very specific. The employer MUST mail a notice of continuation rights to the employee/dependent's last known address within thirty of the person losing coverage. A 15 day extension is added for notifying the plan administrator who must send the notice. The penalty for not notifying in time are quite severe, and made even more so because the Dept. of Labor - Pension and Welfare Benefits Division which regulates this tends to do a complete audit of all COBRA practices when they take on an employer. If the employer sends notice late, and then tries to force you to make up all back premium in the 45 days, complain to your nearest regional office of the DOL - PWBA. They've actually been working to be more consumer responsive. Good luck.
jacquesmc White belt	posted 08-06-2001 04:29 PM "MY HUSBAND AND I HAVE JUST GOT THE COBRA PAPERWORK FROM HIS OLD JOB DONE AND WE ARE NOW SEPARATED LIVING IN DIFFERENT COUNTIES OF FL. I JUST FOUND OUT THAT MY COUNTY DOES NOT HAVE PARTICIPATING PROVIDERS. THE INSURANCE COMPANY TOLD ME I COULD NOT USE OUT OF NETWORK OR OUT OF AREA DR's, HOSPITALS ETC. IS THIS TRUE? I'M PAYING FOR SOMETHING I CAN'T USE? I HAVE UHC EPO. I THOUGHT THE INSURANCE CO. HAD TO PROVIDE ME WITH SOME FORM OF INSURANCE? THEY TOLD ME I CHOSE TO MOVE NOT THEM." There's a couple of things to add to what's already been said. First, if the employer offers a choice of plans, you must be permitted to change to what the employer would offer an active employee moving to where you moved. If there are no alternate plans that the employer (and any subsidiaries) carries, then you're at the mercy of the plan. If it's a PPO, you will have to use the out-of-network benefit which is probably lower. If, however, it is an HMO, especially a federally approved one, then you are not eligible to remain in the HMO if you live over 30 miles from one of their facilities (called moving outside their service area). In which case, you aren't eligible for COBRA continuation but that would trigger the federal right under HIPAA to move to an individual policy under the rules of the state to which you moved. Requirement for that is that you had to have health insurance for eighteen months, the last day of which was part of a group plan, and have used all the COBRA you are eligible for, which in your case would be none.

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