ShareThisThe options can seem daunting and way too expensive; the acronyms, confusing. ARRA? COBRA? And for heaven's sake, Cal-COBRA?
Unless layoffs become personal, it's easy to skim past the scary prospect of what happens to your health benefits when you've lost your job.
"More than getting laid off, health care creates the most panic," said Maureen White, a Sacramento, Calif., management consultant who recently found herself having to learn and navigate the health-benefits system. "The No. 1 thing people worry about is health care."
With a record number of layoffs during the first five months of the year -- and an unemployment rate that's now at 11.5 percent -- many Californians are deep in worry, trying to figure out how to keep themselves and their families covered.
Experts and officials alike want to help -- and they want to trumpet the recent arrival of federal help with handling the hefty price tag of post-employment health coverage.
"People are in a sea of confusion when they lose their jobs," said Cindy Ehnes, director of the California Department of Managed Health Care. "It's incredibly important for them to know about the provisions in the federal stimulus package that subsidize employees' burden of continuing coverage."
A little history: Sky-high premiums for health benefits under COBRA -- the Consolidated Omnibus Budget Reconciliation Act, which lets former employees extend their company's health benefits for up to 18 months -- have long tended to strike fear in people's hearts. COBRA costs the typical family more than $1,060 a month, according to health advocacy organizations.
In 2007, the Commonwealth Fund found that only 9 percent of terminated workers used COBRA. Simply put, a whole lot of families go uninsured because COBRA costs too much.
To provide some relief, ARRA -- the American Recovery and Reinvestment Act, which went into effect in late February as part of the federal stimulus plan -- pays for 65 percent of COBRA premiums for people who've lost their jobs from Sept. 1, 2008, through the end of this year. The subsidy will help pay for nine months of COBRA coverage for eligible recipients.
"It's not a perfect solution," said Ehnes. "But continuing that coverage will hopefully give someone time to gain employment with benefits once the economy turns around."
Even so, she worries that rather than rethinking COBRA and taking advantage of ARRA, terminated employees will miss their deadline to apply for the discounted coverage within 60 days of their unemployment date.
Jennifer Schryer, 35, was laid off from her Internet marketing job in March. She managed to navigate the basics of COBRA and Cal-COBRA, which covers terminated employees from smaller companies and extends federal COBRA payments another 18 months. And she now pays $250 every two months to continue her health coverage.
"I've been to the doctor and the dentist, and I was covered just like before," said Schryer, who is single and lives in Sacramento.
In contrast, White wasn't covered by ARRA after she was laid off from her vice-president post with a Sacramento nonprofit in late 2007. Instead, she paid a monthly COBRA premium of $480.
"When I got laid off, I could have negotiated health benefits for three months," said White, who is also single. "I didn't do it. I had significant savings, and I didn't think I'd be out of work for a year and a half."
Renee Engle says she initially didn't know about ARRA, so she opted for a limited private insurance plan after she was laid off at the end of March.
The former University of California, Davis, Center for Neuroscience geneticist shopped around and found a high-deductible plan that would allow her to pay only $51 a month for the most basic emergency coverage -- far less than the $431 COBRA premium she would have paid.
(E-mail Anita Creamer at acreamer(at)sacbee.com.)
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
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