Employee Benefits-DOL Provides Tips To Individuals Whose COBRA Subsidy Is Expiring

The Department of Labor (the “DOL”) has added to its website a Fact Sheet which provides tips to individuals whose subsidy for COBRA premiums is expiring, so that they can maintain their health care coverage.

By way of background, the American Recovery and Reinvestment Act and subsequent legislation (the “ARRA”) has provided a COBRA premium reduction (sometimes called the “subsidy”) for eligible individuals who were involuntarily terminated from employment through May 31, 2010. Individuals who qualified on or before May 31, 2010 may continue to pay reduced premiums for up to 15 months, as long as they are not eligible for another group health plan or Medicare. Those individuals who qualified for the premium reduction were only required to pay 35 percent of the COBRA premium otherwise due to the plan. After 15 months of the premium reduction, an individual must pay the full amount to continue his or her COBRA continuation coverage. The Fact Sheet provides the following tips for individuals whose 15 months have expired:

1) Make sure you know when your 15 months of premium assistance ends and how much you need to pay to continue your coverage.
If you are unsure about the above, ask your plan. Plans are not required to remind you or bill you for the increased amount. Not making the full payment within the correct time period can result in the cancelation of your COBRA coverage.

2) Make sure you pay the full premium for coverage after the first 15 months.
COBRA coverage is terminated for non-payment. Individuals who exhaust their COBRA coverage are generally eligible to obtain coverage through state high risk pools and also qualify for special enrollment in a new employer’s plan or spouse’s plan. These rights are lost if an individual’s COBRA is terminated for non-payment.

3) Check for other coverage options.

–If you did not make the premium payment on time and your coverage was canceled, you may want to contact your plan and ask if they will reinstate your coverage. However, if your coverage was terminated for not making the payment within the grace period, the plan is not required to reinstate your coverage. If you believe your coverage was canceled inappropriately, you should contact an EBSA Benefits Advisor at 1.866.444-3272 for assistance.

–If you have lost coverage, and are not eligible to enroll in a new employer’s plan or a spouse’s plan, you may want to contact your state department of insurance to get information about obtaining an individual policy. You may be able to cover your children under your state’s Children’s Health Insurance Program- call 1-877 KIDS NOW (1.877.543.7669) or go to www.insurekidsnow.gov to find out about eligibility and enrollment.

–Additionally, the newly enacted Affordable Care Act provides that plans or issuers that make available coverage to dependent children must make such coverage available for children up to age 26. Because this provision has a varying applicability date, contact the plan to see if such coverage is available. The Affordable Care Act also established Pre-existing Condition Insurance Plans (PCIP) for those with pre-existing conditions. For information about how these plans work, go to www.healthcare.gov.

–If you have limited income and resources (assets), you may want to contact your state to determine if you are eligible for Medicaid or other programs that may assist you in obtaining other health coverage.