Jim Gallagher

Jim Gallagher

This was the title on business writer Jim Gallagher‘s column in the Sunday, March 15, 2009, St. Louis Post-Dispatch (Business, p E3).

If you are “between gigs,” a term I prefer to “out of work,” I thought the info in this column could be helpful to you. I qualify “could be helpful,” because the column deals with a subsidy to help pay your COBRA premium to continue your employer’s health insurance that has a lot of qualifiers to it.

cobra_new1Still, if you fall into the category of workers who would be helped by this subsidy on your COBRA premium, then good for you. Granted this is not a fun and exciting topic, but worth your time to read this to see if you can save about 1/3 off the cost of continuing health insurance for yourself and/or your family.

Here’s a > LINK < to the column, and because the information may be handy now, or later, I’m going to copy/paste the article below, in case the Post-Dispatch archives it, or otherwise takes it offline.

[copy/paste]

If you lose your job in America, chances are you’ll lose your health insurance, too. So, let’s look at some ways you can hang on to your coverage if your job disappears.

First, some very good news. It’s just become a lot cheaper to stay covered. Congress agreed last month to pick up 65 percent of the bill for nine months for employees who hold on to their employer’s coverage under COBRA.

Now, the bad stuff: Not everyone out of work is eligible. The subsidy goes only to employees who were laid off on September 1, 2008, and later. And to get COBRA, you have to have worked for a company that offered health coverage.

Even with the government help, figure on paying somewhere around $115 a month for an individual plan and $325 a month for family coverage. Those rough estimates are based on a 2006 average cost of employer-provided health coverage in Missouri, calculated by the Kaiser Family Foundation.

Congress passed the COBRA subsidy only last month, and the administrative rules are still being written. So, expect employers to be confused about it for a few more weeks.

Let’s look at the nitty-gritty. COBRA allows you to keep coverage for yourself and family under your employer’s health plan for 18 months after your termination. Until now, you had to pay the full cost, plus two percent. That averages about $12,000 a year for family coverage, and most jobless people can’t afford it.

To get the new subsidy, you have to have been laid off, not quit. People fired for “gross misconduct” also don’t qualify. With the subsidy, you’ll have to pay only 35 percent the full cost of coverage.

COBRA applies only to employers with 20 or more employees. If you worked for a smaller company that provided health coverage, you may still continue it under state laws, called “mini-COBRAs.”

In Missouri and Illinois, you can stay on the employer’s plan only for nine months under mini-cobra. The government’s 65-percent subsidy goes to small-employers’ plans as well as big ones.

You have 60 days after losing your coverage to decide if you want COBRA. If you fall ill while you’re thinking it over, your medical bills will still be covered as long as you sign up by the deadline and pay the back premiums.

If you’ve already passed up COBRA coverage, or dropped it, Congress is giving you a second chance. You now have another 60 days to sign up. The countdown starts after your former employer notifies you of the new change. This second chance applies only to people laid off in September or later.

If you’ve been paying for your own COBRA coverage until now, don’t expect much of a rebate from Uncle Sam. The government will help with premiums for coverage only from Feb. 17 on.

So, what do you do if you can’t afford COBRA, or can’t get it? If you’re young and healthy, you can probably land a high-deductible plan at a reasonable price. I recently used Ehealthinsurance.com to shop for coverage for my 24-year-old daughter, who is moving back to America after working overseas. I found several reasonable quotes, and settled on a policy with a $2,000 deductible for $134 per month.

Things are meaner if you’re sick or old. “If you are 50 or over, or if you have even a minor illness, you face the prospect of having to pay a lot of money, or not being able to get coverage at all,” says Illinois Insurance Commissioner Michael McRaith.

Children often qualify for free or low-cost state Medicaid coverage even though their parents aren’t poor. If your only income is unemployment insurance, you may qualify as poor even if you don’t think of yourself that way.

Recently, a newsroom colleague and her husband lost their jobs and their health coverage on the same day. They are firmly middle class. She was surprised to find her teenage son eligible for free coverage under Illinois’ All Kids program. A family of four gets coverage for children free if monthly income is under $2,650. The same family earning $3,500 a month would pay only $25 monthly to insure two children.

In Missouri, the Social Services Department looks at your income now, rather than when you were working. Uninsured children with net family incomes below 150 percent of poverty are eligible for coverage under MO HealthNet for Kids. That’s $2,650 per month in income for a family of four. Children under age 1 may qualify even at higher income levels.

Social Services spokeswoman Arleasha Mays urges parents to see if they qualify for coverage as well. They might be surprised, she says.

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