June 28, 2013

COBRA Insurance Supplement – Do You Qualify? How To Get It?

Many people, throughout the country, are now unemployed due to the massive layoffs that have taken place. When employed, many of them enjoyed the benefits of employer health care. In order to give some assistance to these employees, in 1986 the Consolidated Omnibus Budget Reconciliation Act (COBRA) was passed. Since that date, a COBRA insurance supplement, also called a subsidy, has been added.

Cobra Insurance Supplement

This Act allows employees to retain their insurance under certain circumstances. They remain a member of the group plan, which usually has lower premiums, however, previous to the supplement, they had to bear the full cost of the insurance. In other words, their employers portion as well as their own.

In 2009 Congress passed a Bill to provide a subsidy for people carrying this insurance in the amount of 65% of the premium. This reduced an insurance premium of $1,000 to around $300, making it an affordable amount to pay. They also added that this subsidy only covered those who were unemployed between September l, 2008 and May 31, 2010. Anyone who did not lose his or her job between those dates is not eligible for the subsidy. The supplement was originally to only apply for 9 months, however, this was extended to 15 months of the 18 allowed.

To qualify for COBRA, and the supplement, one must have been laid off, not fired or simply quit. The company one worked for must have been supplying group medical insurance and have more than 20 employees. If the company goes out of business or bankrupt there is no insurance. Also, a self-employed person or a person who is collecting Medicare, Medicaid, Disability or covered under another person’s plan is not eligible for this insurance.

Any employee who is terminated is required, by law, to receive a severance package. In that package has an application for COBRA insurance as well as an application for the supplement. There are also other documents explaining the employees rights, how to apply for unemployment insurance and other things.

If an employee was laid off, before the supplement came into effect, the employer must inform them, in writing, that this benefit is available. Anyone who has been paying the premium in full previous to that time may qualify for a refund of some of the money paid. An application must be made for a refund and can be obtained from the former employer or from the Department of Treasury.

Upon receiving the termination package, it is essential that the employee make out all the forms and immediately get them in the mail to the insurance provider. Every question must be answered carefully and the first premium must accompany the application for COBRA. This will assure that there is a continuation of the insurance with no interruptions.

In 2010 a bill was presented, in Congress, to extend the supplement beyond the 15 month limit. This bill did not pass however, it is expected that it will return to the floor after the November elections. There is also the question to be answered as to what will happen to COBRA when the National Health Bill goes into effect.

Find out more: http://insurance.mo.gov/consumer/faq/lhfaqs.htm

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