COBRA

[airdvr 210]

Big surprise when I tried to refill my prescriptions today.

I quit my Job on November 30th. Today is Dec. 3rd. I was told that my coverage cancelled on November 28th.

Sent this e-mail to the lady who handles benefits....

Kim,

Thanks for calling me back. I have a problem with what I’m being told.

According to the Dept of Labor’s website…

http://www.dol.gov/ebsa/faqs/faq-consumer-cobra.html

Qualifying Events for Employees:
Voluntary or involuntary termination of employment for reasons other than gross misconduct
Reduction in the number of hours of employment

I’ve always understood COBRA to be something I’m entitled to. Additionally, I don’t think cancelling my coverage is correct. As it stands right now I have no insurance coverage for myself and my kids and I know that can’t be correct on December 3rd when I notified you of my voluntary termination of employment on November 30th. Additionally, I don’t know of any insurance coverage that is paid in arrears. I had premiums deducted from my pay in November that should have paid my insurance through December, at which time I would I would have to decide if I wanted to pay COBRA premiums.

I’m hoping this is just a misunderstanding and my insurance coverage will be re-instated immediately. You mentioned that you had done it this way for years. I’m surprised no one has ever complained before me.


Pretty sure they are in the wrong here. Anyone an expert in these things?

Please don't dent the planet.

Destinations by Roxanne

[NWFlyer 2]

So... here's how COBRA works. Assuming you work for a company that is required to offer COBRA (from your link "The law generally covers health plans maintained by private-sector employers with 20 or more employees, employee organizations, or state or local governments."), you will then have to enroll in COBRA coverage. You have 60 days to do that, retroactive back to the day that you left the company (or the day your insurance ended - sometimes companies will let you go through the end of the month in which you left). This is the critical part from the link you posted.

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Q6: What process must individuals follow to elect COBRA continuation coverage?
Employers must notify plan administrators of a qualifying event within 30 days after an employee's death, termination, reduced hours of employment or entitlement to Medicare.
A qualified beneficiary must notify the plan administrator of a qualifying event within 60 days after divorce or legal separation or a child's ceasing to be covered as a dependent under plan rules.
Plan participants and beneficiaries generally must be sent an election notice not later than 14 days after the plan administrator receives notice that a qualifying event has occurred. The individual then has 60 days to decide whether to elect COBRA continuation coverage. The person has 45 days after electing coverage to pay the initial premium.

The "Qualifying event" in this case was you leaving the job.

Once you enroll, YOU are responsible for paying the full amount of the insurance coverage, plus a small admin fee.

Quote

Beneficiaries may be required to pay for COBRA coverage. The premium cannot exceed 102 percent of the cost to the plan for similarly situated individuals who have not incurred a qualifying event, including both the portion paid by employees and any portion paid by the employer before the qualifying event, plus 2 percent for administrative costs.

It says "may" but most companies do not pay for COBRA coverage (though sometimes they will pay it for X months as part of a severance package in the case of a layoff - my previous employer did that for me).

So it sounds to me like you're fine and they're within the letter of the law (and as a practical matter, it's only been a couple days - they will need to process the COBRA paperwork (the election notice mentioned above) and get it to you, then you fill it out and send your check and you're covered again, retro back to your termination date.

What does that mean if you need care between now and when that process is completed? You may need to pay out of pocket and submit claims later. It's a hassle, but it sounds to me like no one's done anything against the law yet.

Oh, and as for the "paid in arrears" part, your ex-employer and the insurance company will settle that up if they did pay in advance, so that's really not a relevant piece of information here.

(BTW I've worked in the industry for the better part of 20 years, so I know maybe a hair more than someone who stayed at a Holiday Inn Express last night).

"There is only one basic human right, the right to do as you damn well please. And with it comes the only basic human duty, the duty to take the consequences." -P.J. O'Rourke

[Amazon 7]

Welcome to fun with INSURANCE companies for their fun and their profit

Weren't you one of those who was laughing at the fun I was having with them

[airdvr 210]

Thanks for the quick response

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Oh, and as for the "paid in arrears" part, your ex-employer and the insurance company will settle that up if they did pay in advance, so that's really not a relevant piece of information here.

A question about that. Have you ever known an insurer to take premiums in arrears? Seems that if I paid for coverage I should receive it, regardless of my termination date. Also, just the fact that she told me I didn't qualify for COBRA because I quit tells me she might not be as familiar with the system as she needs to be.

Please don't dent the planet.

Destinations by Roxanne

[airdvr 210]

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Welcome to fun with INSURANCE companies for their fun and their profit

Weren't you one of those who was laughing at the fun I was having with them

I've never laughed at you

and for the record this isn't the insurer who's f**king with me.

Please don't dent the planet.

Destinations by Roxanne

[NWFlyer 2]

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Thanks for the quick response

Quote

Oh, and as for the "paid in arrears" part, your ex-employer and the insurance company will settle that up if they did pay in advance, so that's really not a relevant piece of information here.

A question about that. Have you ever known an insurer to take premiums in arrears? Seems that if I paid for coverage I should receive it, regardless of my termination date. Also, just the fact that she told me I didn't qualify for COBRA because I quit tells me she might not be as familiar with the system as she needs to be.

I'm not exactly sure about that - whether billing is typically a month ahead or for the previous month - I believe it's typically a month ahead.

I'm assuming when you ask about what you paid in - you're asking about your share of the coverage?

If you think about it, you probably started paying for insurance on your first day that you were eligible for coverage. So let's say you started work on May 1 (and were eligible for coverage then). Your first payment would be applied to June's coverage. The cost for your May coverage would be be billed in arrears because the insurance company didn't know about you when they sent out May bills) but your employer probably covered that in full, with you contributing towards your premiums on a go-forward basis. So I think it's likely that it works out even.

And yeah, she's wrong about the COBRA eligibility thing.

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Qualifying Events for Employees:
Voluntary or involuntary termination of employment for reasons other than gross misconduct

"There is only one basic human right, the right to do as you damn well please. And with it comes the only basic human duty, the duty to take the consequences." -P.J. O'Rourke

[DrewEckhardt 0]

As far as your employer dropping you immediately that's normal. Their contribution and your payroll deductions only covered November.

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Thanks for the quick response

Quote

Oh, and as for the "paid in arrears" part, your ex-employer and the insurance company will settle that up if they did pay in advance, so that's really not a relevant piece of information here.

A question about that. Have you ever known an insurer to take premiums in arrears?

Yes. That's how COBRA works. That's how you usually want it to work.

The full cost for family coverage (medical only) at my last few employers has been about $1500 a month.

If you get into another plan before the enrollment period (60 days following the later of a qualifying event and notification, but I wouldn't want to hedge my bets on proving when notification didn't occur) and creditable coverage gap allowance (63 days) for group plan pre-existing condition exclusion pass without anything too bad happening (paying $300 each for a couple office visits beats $3000 for insurance to cover them) you didn't opt for COBRA and didn't spend $3000.

If something bad happens in those sixty days or you don't get into a more affordable insurance plan (private insurance can be a lot less expensive when your chances of being old and having pre-existing conditions are 0% instead of whatever the group aggregate is or worse if you can get it when you're older and/or sicker) which covers any pre-existing conditions you cough up the $3000 to pay for coverage retroactively and get used to a $1500/month insurance bill.

It's actually worse than it sounds because as an employee you got to pay your share with pre-tax dollars. With a 28% Federal income tax rate, 9.55% state rate in California, and other taxes like the 1.2% California state disability insurance you might need to earn $2448 a month just to cover your insurance (medical expenses including insurance are only deductible when you're itemizing and to the extent they exceed 7.5% of your adjusted gross income).

[pincheck 0]

Quote

Welcome to fun with INSURANCE companies for their fun and their profit

Weren't you one of those who was laughing at the fun I was having with them

Makes me glad at times like this we have the national health service perhaps not the best in the world but at least it doesn't depend on what you earn or how much profit the insurance companies want to make .

Billy-Sonic Haggis Flickr-Fun

[mpohl 1]

Welcome to today's everyone for him/herself UNunited States of America. You wouldn't favor/ vote for Cain, Gingrich, or Romney, by any chance?

If so, you are just experiencing a dose of your Republican medicine!

Quote

Big surprise when I tried to refill my prescriptions today.

I quit my Job on November 30th. Today is Dec. 3rd. I was told that my coverage cancelled on November 28th.

Sent this e-mail to the lady who handles benefits....

Kim,

Thanks for calling me back. I have a problem with what I’m being told.

According to the Dept of Labor’s website…

http://www.dol.gov/ebsa/faqs/faq-consumer-cobra.html

Qualifying Events for Employees:
Voluntary or involuntary termination of employment for reasons other than gross misconduct
Reduction in the number of hours of employment

I’ve always understood COBRA to be something I’m entitled to. Additionally, I don’t think cancelling my coverage is correct. As it stands right now I have no insurance coverage for myself and my kids and I know that can’t be correct on December 3rd when I notified you of my voluntary termination of employment on November 30th. Additionally, I don’t know of any insurance coverage that is paid in arrears. I had premiums deducted from my pay in November that should have paid my insurance through December, at which time I would I would have to decide if I wanted to pay COBRA premiums.

I’m hoping this is just a misunderstanding and my insurance coverage will be re-instated immediately. You mentioned that you had done it this way for years. I’m surprised no one has ever complained before me.


Pretty sure they are in the wrong here. Anyone an expert in these things?

[dks13827 3]

I can tell you from experience that incompetence is gonna bite you..... they will 'forget' to send you the paper work for 6 weeks, then you have to pay for 6 weeks that you could not use, it goes on and on and on, the hassle. Go visit your employer and as for the manager of HR or benefits. Other wise you will lose a month or 2, but you will pay for it in the end. Go down there. And document every contact you make, and inform the insurance company of your ongoing issues. And good luck.

[NWFlyer 2]

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I can tell you from experience that incompetence is gonna bite you..... they will 'forget' to send you the paper work for 6 weeks, then you have to pay for 6 weeks that you could not use, it goes on and on and on, the hassle. Go visit your employer and as for the manager of HR or benefits. Other wise you will lose a month or 2, but you will pay for it in the end. Go down there. And document every contact you make, and inform the insurance company of your ongoing issues. And good luck.

Actually, no, if you're paying retro to the date that your coverage ended, you CAN use those six weeks, and you will be covered. As I said, you may have to pay out of pocket and get reimbursed once the paperwork is done, but you WILL be covered as long as you meet your end of the bargain and complete the paperwork/payment within 60 days.

I agree that one should be proactive and document things carefully (particularly given that the HR rep seemed to think he wouldn't be eligible), but it's also too early to trash the employer completely as it's only been two business days since he left.

Mistakes do get made, of course. I was on COBRA coverage for about 6 months in 2008 between jobs, and the insurance company made an administrative error in trying to switch me from the employees group to the COBRA group, then they blamed the error on my employer (saying it was they who had canceled my coverage, though I was up to date on my COBRA Payments). I immediately contacted my employer as well as continuing to follow up with the insurance company - within 2 days the insurance company admitted that it was its error, not my employer's and the mistake was corrected.

I've worked in the industry long enough to know that Hanlon's razor holds true "Never attribute to malice that which is adequately explained by stupidity." Not to say that insurance companies are inherently stupid, but that they are large, overly-complex organizations that are often using overly-complex, out-of-date systems* that are used and supported by fallible humans, and mistakes do get made. And while some may be evil, the ones I've been employed by (both not-for-profits) are generally organizations that try to do right by their customers, though they may not always succeed, it's not for lack of trying.

*Why do I know all this? Because the presence of those overly-complex, out-of-date systems and overly complex business processes keep me employed.

"There is only one basic human right, the right to do as you damn well please. And with it comes the only basic human duty, the duty to take the consequences." -P.J. O'Rourke