Will health insurance stay after the job goes?

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imageContributing blogger John Long is a professional career coach and consultant in Atlanta who founded Two Roads Resources. He blogs at Atlanta Career Coach.

Q: My employer called it “downsizing” and “workforce reduction due to budgetary constraints.” They can package and label the news however the want. But the reality is that they eliminated my job, they’ve affected my life dramatically in a not-so-good way and now I’m unemployed.

I have a growing list of concerns as I work through what just happened. But one issue that truly scares me is the prospect of losing health insurance coverage. This is critical because my partner and I took advantage of domestic partnership benefits and we are both enrolled in my previous employer’s group plan a few years ago. What steps should I take?

A: There are several factors to consider, though I’m not a lawyer, human resources consultant or benefits specialist, so I’ll tread lightly and then offer additional resources. I understand your anger, but they do at least deserve some commendation for being progressive enough to offer domestic partner benefits. So many employers don’t.

Protecting your health insurance coverage is extremely important, especially in light of escalating health care costs. Research will help you make an informed decision. The best place to start is to meet with a member of human resources with your previous employer to discuss COBRA, the federal law that regulates the continuation of benefits.

Many people who are laid off immediately dismiss the prospect of paying for COBRA, assuming it is too expensive. But there is some good news – the Obama administration’s American Recovery & Reinvestment Act (ARRA) now provides employers with substantial subsidies for COBRA premiums, which will be passed along to subscribers.

A few points to consider concerning COBRA:

In general, continuation of coverage runs for 18 months after the date of your lay off and up to 36 months for special circumstances. In Georgia, employers with less than 20 full time employees are required to provide only three months of coverage.

Spouses can be covered by a COBRA plan. But domestic partners currently covered under a group plan are not guaranteed COBRA continuation. COBRA, since it’s federal legislation aligned with the Defense of Marriage Act, does not recognize domestic partnership or marriage between same-sex couples. But some states and municipalities mandate domestic partnership benefits.

While not required, progressive employers in Georgia now offering domestic partnership benefits will often voluntarily elect to extend COBRA-equivalent coverage to domestic partners. Check with your previous employer directly.

COBRA subsidies are now available to employers, as a result of ARRA guidelines. Employees who are involuntarily terminated between Sept. 1, 2008 and Dec. 31, 2009 are eligible for this premium credit for up to nine months. The employer receives a 65 percent tax credit on the cost of maintaining COBRA coverage on a qualifying ex-employee and passes this savings on to the COBRA enrollee.

A few pros to COBRA: Coverage, offered as part of a group health insurance plan, is often less expensive than individual coverage providing the same level of benefits. And COBRA is a continuation of coverage, whereas individual coverage can fall under waiting periods or a carve out/denial of coverage for pre-existing conditions.

It’s best to review COBRA options thoroughly with an HR rep at your previous employer. Then meet with a qualified insurance broker to weigh your specific options concerning COBRA continuation and an individual health insurance policy. Also, determine if domestic partnership coverage is available through your partner’s employer.

A few links to start your homework:

COBRA Tips by OnQue Technologies, Inc.
FAQs for Employees about COBRA Continuation
Workforce Management: IRS Releases Guidance on COBRA Subsidies

Have a question you’d like John to answer here? {encode=”[email protected]” title=”Email us.”} Subject: Career Coach.

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