The Homa Files

OK, everybody seems to agree that an employee should be able to take his / her healthcare insurance with them if they change jobs or lose their jobs.  It’s called “portability”.  That way, no worry about discontinuous coverage or those pesky pre-existing conditions.

Not so fast.

Yeah, on the surface, portability provides coverage continuity.  But, it may be more apparent than real.

Getting the insurance companies to keep people in the group pools is one thing.  Paying the premiums is another – especially since the former employer won’t be paying the bulk of the premiums.

For a dose of reality, consider COBRA.

Companies (really, their insurance companies) are required by the Consolidated Omnibus Budget Reconciliation Act 0f 1986 (COBRA) to offer departing employees a chance to keep medical insurance if the laid-off workers pay their own premiums.

But, only 1 in 10 departing employees take the COBRA coverage.

Why?

The company stops paying towards the insurance, the individual has to pay the full amount – plus, usually a small administrative adder.

The resulting premiums are high … very high … beyond the reach of most departing employees.

Uh-oh.

Business Week, Why Being Laid Off Is Tougher These Days, July 30, 2009
http://www.businessweek.com/magazine/content/09_32/b4142061715525.htm

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COBRA details:
http://www.dol.gov/ebsa/pdf/cobraemployee.pdf

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This entry was posted on August 26, 2009 at 7:45 am and is filed under Health Care / Medical Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.