COBRA
for the Unemployed--
You have more choices than you think!
Don
Schmitz /Human Resource Staffing
Among
the immediate challenges facing the unemployed is the issue
of health care for themselves and their families.
Under
COBRA (the Consolidated Omnibus Budget Reconciliation Act)
law, newly laid off employees are given the option to extend
employer health coverage at their own expense for a period
of up to 18 months.
In
addition to COBRA, The new American
Recovery and Reinvestment Act , (ARRA) became law
on February 17th, 2009. This new benefit will provide some
temporary relief for many unemployed, but what happens after
December 31st?
Human
Resource Professionals can provide real and meaningful assistance
with two recurring issues for displaced workers.
First,
many don't know how much it really costs their employer to
provide medical coverage as a job benefit. It can be an expensive
shock to find they are now footing the whole bill for health
care costs without employer help. According to a study recently
released by Families USA, COBRA coverage in Minnesota averages
about $375 per-month for an individual and consumes about
25 percent of monthly unemployment benefits for a single person.
For family coverage, the average cost is nearly 70 percent
of monthly unemployment benefits, or about $1,070 per-month.
Second,
many of the unemployed have never had to shop for personal
health coverage themselves and don't even know there are alternatives
to COBRA.
Somewhere
in between the high costs of COBRA coverage through their
employer and going uninsured altogether, there are much less
expensive options for individuals and families. Many Minnesota
health insurance companies, including Medica, have health
insurance plans for individuals and families to choose from
that are less costly than COBRA with subsidized assistance!
This is good news!
As
an example of the price difference available in the individual
health insurance market, Medica's average premium for a single
individual is $150 per month and for a family it is $380 per
month. These health plans can save people anywhere from 50%-75%
off the cost of their monthly COBRA premiums. Some monthly
premiums start as low as $57 per month and have a wide range
of co-pays and deductibles. The dollars saved are available
for other bills.
Since
COBRA is meant to protect those who are uninsurable from becoming
uninsured, there are individual situations when COBRA is still
the best choice for coverage. For those with a chronic health
condition, the best option may be to keep that individual
on COBRA. Then consider choosing a less expensive individual
health plan for everyone else in the family.
There
are other coverage options, too. These include health coverage
programs offered through the state and federal government,
including the Minnesota Comprehensive Health Association (MCHA)
- a high-risk pool for people who cannot qualify for health
care coverage elsewhere.
Each
person unemployed has their own personal experiences with
unemployment. We understand that this is a difficult time
for a growing number of our neighbors and friends who suddenly
find themselves without a job and needing to extend financial
resources as far as possible. You do have choices.
