Thursday, March 26, 2009

Health Options for Laid Off Employees

Having to deal with extra expenses when you are laid off from work is suicide. As costs for sickness are extra expense, does it mean the end for the unemployed worker?

Acknowledging the increasing number of laid-off employees, the stimulus package included a provision concerning medical costs for unemployed workers.
The economic stimulus otherwise known as the American Recovery and Reinvestment Act have the following helpful provisions:

• Employees who were laid from September 1, 2008 and who would be laid off until December 31, 2009 may qualify for a 65% subsidy to pay COBRA.

Those who were involuntary terminated between September 1 and February 16 who did not elect COBRA or are no longer enrolled with it may still avail.

Those who are eligible for the extended COBRA shall be notified by April 18 to inform them of the opportunity. They are given 60 days to elect COBRA.

• Previously, a laid off employee continues health insurance coverage from their former employee for 18 months which is a bit expensive.

Now, only 35% of the COBRA premiums shall be paid for 9 months of said 18 months. With the change, the cost of maintaining an average policy would be $377 per month for a family and $140 for an individual. This would dramatically rise to $1,078 per month for family coverage and $400 per month for individual coverage once the subsidy expires. Consequently, a 300% increase in COBRA enrollees is expected.

Aside from COBRA, laid off employees are given other options. These options include:

1. joining your spouse whose job offers health insurance in her/his plan;

2. checking if your children qualify for any government programs;

3. asking if you are qualified for Medicaid;

4. getting individual plan on private market that covers prescription drugs, out-of-network care or treatment for chronic conditions;

5. considering your out-of-pocket costs and co-payments.