eHealthInsurance releases updated list of FAQs in response to recent extension of COBRA subsidy

Dec 31 2009

eHealthInsurance.com (NASDAQ: EHTH) the leading online source of health insurance for individuals, families, and small businesses, today released an updated list of frequently asked questions (FAQs) in response to the recent extension of the federal COBRA subsidy, along with some additional resources and tools.

The Department of Defense Appropriations Act of 2010, signed into law on December 21, 2009, includes a two-point extension of the original COBRA subsidy:

• The duration of the subsidy has been extended from nine (9) months to fifteen (15) months.
• The eligibility period has been extended to include those who become eligible for COBRA due to a lay off on or before February 28, 2010.
• To calculate the time you have remaining on the COBRA subsidy, use eHealthInsurance's COBRA Subsidy Calendar Widget in eHealthInsurance's media center or at Widgetbox.com (http://www.widgetbox.com/widget/cobra-subsidy-calendar-ehi)

However, this extension was passed after the first subsidy had already ended for thousands of its first recipients. Many of those whose subsidies ended in November 2009 may have dropped their COBRA coverage when their premiums increased 65 percent. Now that the subsidy has been renewed, many consumers have questions about the new subsidy.

eHealthInsurance has released the following FAQs and list of resources, which includes COBRA Subsidy Calendar and Health Insurance Quiz widgets:

FAQs Regarding the Extended COBRA Subsidy:

1. Question: What's the difference between the original subsidy and the new subsidy?

Answer: The amount of the COBRA subsidy has not changed but the duration of the subsidy was extended from nine (9) months to fifteen (15) months and the period of eligibility for the subsidy has been extended through the end of February, 2010.

The Department of Defense Appropriations Act of 2010, is the new legislation that was signed into law on December 21, 2009. It increases the length of the COBRA subsidy from nine months to fifteen months. It also makes the subsidy available to anyone who becomes eligible for COBRA through February 28, 2010, provided they meet the other criteria for subsidy eligibility.

The original COBRA subsidy was included in the American Recovery and Reinvestment Act of 2009 (ARRA) as part of the stimulus bill passed in February. The ARRA made a nine-month, 65-percent subsidy for COBRA available to anyone who lost their job on or before December 31, 2009, provided they met the government's criteria for subsidy eligibility.

2. Question: How much longer will my COBRA subsidy last?

Answer: The new law extends the COBRA subsidy from nine months to fifteen months.

If you're currently receiving the subsidy, you can continue receiving it for an additional six months beyond the date on which it was originally scheduled to expire. However, it is important to note that COBRA coverage lasts a total of 18 months, which means COBRA is not a permanent solution.

3. Question: Will the subsidy be extended again in February or will the new health reform legislation take its place?

Answer: There is no way to know, at this point, if the subsidy will be extended again in February.

The health reform legislation passed by the Senate earlier in December calls for the major changes in the health insurance marketplace to occur in 2014. That legislation must also still be approved by the House of Representatives and signed by the President. The legislation does not propose any extension of the subsidy to 2014.

4. Question: I'm scheduled to be laid off early in 2010. Am I going to be eligible for the COBRA subsidy?

Answer: The new law extends eligibility for the COBRA subsidy for two additional months. Therefore, if you become eligible for COBRA on or before February 28, 2010, you can receive the subsidy for up to fifteen months, provided you meet the other eligibility requirements.

5. Question: I'm losing my job on January 1, 2010 but my severance package covers my health insurance through March 2010. Since I became unemployed in January, can I still receive the extended subsidy even though I won't become eligible for COBRA until April?

Answer: Technically speaking the answer is no. The legislation is clear that you must become eligible for COBRA, and the subsidy, on or before February 28, 2010. Your former employer's Human Resources department or benefits administrator may have a solution to this problem, so it's important that you contact them right away to discuss this issue.

6. Question: When my original COBRA subsidy ran out, I dropped COBRA coverage because I couldn't afford it anymore. Can I sign up again and receive the extended subsidy?

Answer: Yes. The legislation allows for a 60-day re-enrollment period. If you had to drop your COBRA coverage when your original subsidy expired at the end of November, your COBRA coverage and the subsidy can be retroactively reinstated.

It's likely that the Labor Department will require your former employer's Human Resources department or benefits administrator to make you aware of the re-enrollment period. But, if you want to be certain that your concerns are addressed contact your former employer's Human Resources department or benefits administrator for more information.

7. Question: When my original COBRA subsidy expired, I purchased a private health insurance plan on my own. Should I drop that coverage now and go back to COBRA?

Answer: You are free to drop your privately-purchased health insurance plan and re-enroll in COBRA. Contact your former employer's Human Resources department or benefits administrator for more information on how to re-enroll.

However, you should consider your options carefully, especially if your current health insurance plan meets your needs and budget. Remember, the subsidy is only available for a total of 15 months, and for most people COBRA eligibility ends after 18 months. If you suffer an illness that would be classified as a pre-existing condition while you're on COBRA you may not qualify for another privately purchased individual or family plan.