One of the first questions many people ask after learning that they will be losing their job is, “What does this mean for my health insurance?” A 30-year-old law known as COBRA provides what should be a straightforward answer, but some employers and insurance companies still fail to meet their legal obligations under the federal statute.
Before looking into what is supposed to happen and how a Columbus COBRA rights attorney can help when the proper procedures are not followed, it is worth noting the law does not represent the only option for keeping coverage when losing a job that offers health benefits. Executives and highly paid workers who negotiated employment contracts often have the opportunity to also negotiate a severance plan that includes continuing health insurance. Similarly, employees who learn that their company is offering early retirement buyouts or planning layoffs may be able to bargain for a combination of separation pay and short- or long-term insurance subsidies.
Yet another alternative to COBRA is taking out a conversion policy. Though less common than either regular COBRA arrangements or negotiated coverage, conversion plans offer all the same provisions as the insurance policy a worker enjoyed while on his or her company’s group plan but at individual plan rates for premiums and deductibles — which means higher rates paid completely by the policyholder. A COBRA plan maintains the group plan rates, but the out-of-pocket costs will still be higher because the employer is no longer subsidizing coverage.
An experienced COBRA benefit and employment lawyer in Columbus will be able to advise and represent a soon-to-be unemployed worker in insurance negotiations with an employer or insurer.
The acronym stands for the 1985 Consolidated Omnibus Budget Reconciliation Act. Part of that federal spending law requires employers that offer health insurance to workers to allow individuals who leave voluntarily or through no fault of their own to keep their coverage for as long as 18 months (though some plans may have shorter COBRA periods). A person can decline to take advantage of the offer.
When someone opts into a COBRA plan, he or she pays 100 percent of the premiums and deductibles. COBRA coverage satisfies the requirement for taxpayers older than 26 to have their own health insurance under the Affordable Care Act. Information on the Healthcare.gov website walks visitors through the relationship between COBRA and the program popularly known as Obamacare.
As noted, no one has to sign up for COBRA coverage. However, every employer that offers health insurance to workers must inform a separating employee of his or her COBRA rights. The information must be provided in writing, and the individual who is retiring or being laid off must acknowledge that he or she received it, usually by signing a form.
An employer must also notify the appropriate health plan that the person who had been covered through the company or agency will no longer be on the company plan after a certain date. If the person in question elects COBRA coverage, the health plan must then contact him or her within a month to supply evidence of continuing coverage and set up premium payment arrangements.
Not receiving information about COBRA, being denied an opportunity to elect a COBRA plan, or being charged premiums and deductibles higher than those for participants in the company’s group plan can provide grounds for filing a lawsuit over illegal treatment. Violations of COBRA rights can make an employer and/or an insurance company responsible for paying compensation and monetary damages for both too-high insurance costs and health problems experienced while uninsured.