Rich and Linda Rosen are panicked after receiving notice that their COBRA health coverage was unexpectedly terminated two weeks ago. No one has told them what to do next.
The health insurer’s letter nearly put Rich Rosen in the hospital.
For a year now, Rich, 59, and wife Linda, 56, have scraped together more than $1,000 a month to continue group health insurance after his wife was laid off. Not an easy thing when only one person is working, and not steadily.
But the Bensalem couple intended to stick it out until Linda found a job with benefits or the 18-month limit under COBRA expired.
That is until this week when the Rosens received a notice from Aetna health insurance that their group health insurance coverage ended March 31.
The reason is that Linda’s former employer, Stockburger Chrysler Plymouth in Newtown Township, went out of business in March and stopped providing employee health insurance.
“I’m on five medications, what do I do?” Rosen said. “I get thrown to the wolves here. I thought I was on COBRA for 18 months.”
But under the 1985 federal law, a COBRA beneficiary is eligible for continued coverage only as long as his or her former employer doesn’t go out of business and provides group-health coverage for 20 or more employees. In other words: no employer health benefits, no COBRA.
Under COBRA, eligible workers can continue group health benefits after they lose or change jobs, but they must pay the full premium cost, plus a 2 percent administration fee. Under the Obama administration’s federal stimulus package, most workers who lost or will lose their jobs between Sept. 1 and Dec. 31 can qualify for a 65 percent subsidy on COBRA monthly premiums.
Employers are supposed to provide notice if they are terminating an individual’s COBRA coverage early, but there is no specific timeline. The law states only that notice must be given “as soon as practicable” after an employer determines that coverage will end early and a reason must be specified.
The letter he received last week was dated April 3, Rosen said.
How many American workers had COBRA coverage terminated early since the economic recession began in December 2007 is unclear. The U.S. Department of Labor, the regulatory agency for COBRA, doesn’t collect enrollment information, spokeswoman Gloria Della said.
An estimated 4.7 million Americans were enrolled in COBRA in 2006, the most recent year statistics are available through the federal Employment Benefits Security Administration.
Last week the Pennsylvania Insurance Commission received its first two calls involving COBRA beneficiaries whose employers went out of business, spokeswoman Melissa Fox said.
When COBRA coverage expires, beneficiaries have two options to continue coverage under the Health Insurance Portability and Accountability Act besides the individual plan avenue, Fox said.
First, they can see if their group health plan offers a HIPAA conversion policy under state law; if they are not eligible for that policy, they can seek a HIPPA Conversion/Alternative Mechanism policy, though if there is a lapse in coverage, these policies typically do not honor outstanding bills.
But few people are told about the HIPAA conversion policy options, health care advocates say, placing them at risk for going uninsured for 63 days or longer when prior health coverage is no longer recognized.
Without the prior health coverage protections, insurers can reject people for individual insurance plans for pre-existing conditions or impose temporary coverage exclusions, generally for a year, but possibly 18 months, under federal law.
The available HIPPA options are of little comfort for Rich Rosen. He had no clue he and his wife had been uninsured for two weeks, though Aetna cashed the $1,100 check for his April COBRA payment.
“They said they were sending my money back,” he added.
What makes him even angrier is that he says he didn’t receive notice that their COBRA coverage was being canceled early, which would have given him time to find other coverage.
With no coverage, he wonders how he’ll afford routine doctor visits, which were once $10 copays but now could cost $85. Only two of his five medications are available in generics and one heart pill costs more than $300 a month. Now he is scrambling for answers. Last week he contacted a local veteran’s group that is looking into getting his medications covered.
“How can it be allowed? How can the government let this happen? I don’t understand it. I really don’t,” Rosen said. “It’s so wrong.”
Help, my COBRA coverage is ending, what can I do?
Your first option:
If the group health plan was fully insured and issued in Pennsylvania health insurance, contact the insurance company about purchasing an individual HIPAA conversion policy under Pennsylvania conversion rights law. Only under the conversion option can any outstanding medical bills be submitted and considered for payment.
If you are not eligible for an individual conversion policy, your second option is:
Contact the Blue Cross Blue Shield Pennsylvania Health Plan that writes in the county where the consumer resides and inquire about HIPAA Conversion/Alternative Mechanism policies. In Bucks and Montgomery counties. These policies also have no pre-existing condition exclusions.