Comments on: Do COBRA subsidies lead to more coverage — and higher premiums? http://www.hrmorning.com/do-cobra-subsidies-lead-to-more-coverage-and-higher-premiums/ Your daily dose of HR Thu, 18 Mar 2010 13:43:13 -0400 http://wordpress.org/?v=abc hourly 1 By: Shelley http://www.hrmorning.com/do-cobra-subsidies-lead-to-more-coverage-and-higher-premiums/comment-page-3/#comment-23440 Shelley Fri, 28 Aug 2009 13:37:53 +0000 http://www.hrmorning.com/?p=4168#comment-23440 Roberta - I think we all understand the cost involved and aren't blaming the people that are legitimately laid off and utilizing the COBRA subsidy. If you have not seen a significant increase in premiums due to major things such as organ transplants, cancer and heart surgeries then you are fortunate but probably in a rarity. My current company is self-funded but my previous employer was not and we saw our premiums increase every year and could directly relate it to the rise in claims based on the reports they provided to us (and knowing what some of our employees were enduring). My brother has been laid off for over 1 year and 8 months and if he did not have another source of insurance, then our family would have struggled to make sure that him and his kids had insurance coverage so I really do understand and sympathize with those in this position. I also understand that the premiums are not only increasing from the COBRA enrollees but from other external causes and current employees using the insurance. I think the frustrating thing for those of us that see both sides is that the government didn't. They looked at this great idea for unemployed workers to get them insurance (which I agree it is nice for them) and how it effected their budgets. They just did not look at the big picture of the effect it would have on employers (which is very important too as the employers are still struggling in this economy to stay afloat and keep more people employed) - scrambling to be in compliance when DOL did not even have their letters ready for another month, educating the insurance companies to add them back on even if it was beyond the 60 days they have in their contracts, providing education or a source of complete information for COBRA administrators to read in clear language what their responsibilities are and how the impact of additional COBRA enrollees on a plan would impact the employer's insurance rates. Roberta – I think we all understand the cost involved and aren’t blaming the people that are legitimately laid off and utilizing the COBRA subsidy. If you have not seen a significant increase in premiums due to major things such as organ transplants, cancer and heart surgeries then you are fortunate but probably in a rarity. My current company is self-funded but my previous employer was not and we saw our premiums increase every year and could directly relate it to the rise in claims based on the reports they provided to us (and knowing what some of our employees were enduring). My brother has been laid off for over 1 year and 8 months and if he did not have another source of insurance, then our family would have struggled to make sure that him and his kids had insurance coverage so I really do understand and sympathize with those in this position. I also understand that the premiums are not only increasing from the COBRA enrollees but from other external causes and current employees using the insurance. I think the frustrating thing for those of us that see both sides is that the government didn’t. They looked at this great idea for unemployed workers to get them insurance (which I agree it is nice for them) and how it effected their budgets. They just did not look at the big picture of the effect it would have on employers (which is very important too as the employers are still struggling in this economy to stay afloat and keep more people employed) – scrambling to be in compliance when DOL did not even have their letters ready for another month, educating the insurance companies to add them back on even if it was beyond the 60 days they have in their contracts, providing education or a source of complete information for COBRA administrators to read in clear language what their responsibilities are and how the impact of additional COBRA enrollees on a plan would impact the employer’s insurance rates.

]]> By: Roberta http://www.hrmorning.com/do-cobra-subsidies-lead-to-more-coverage-and-higher-premiums/comment-page-3/#comment-23320 Roberta Wed, 26 Aug 2009 23:11:40 +0000 http://www.hrmorning.com/?p=4168#comment-23320 I think it is possible that COBRA participants are up because the number of people laid off is up. The subsidy makes it possible for these people to retain much needed coverage. Some of the comments appear harsh; begrudging someone medical coverage when they are trying to exist on unemployment insurance seems cold. The company is not absorbing the cost of the subsidy; they are reimbursed so the costs involved would be premiums unless the company is self insured. Prior to the COBRA subsidy costly medical procedures such as organ transplant, cancer and heart surgeries did not affect our overall premiums by that much so I find it hard to believe premiums will substantially increase over the current use of COBRA. A continuation of the subsidy would not be the worst thing that could happen. These were loyal hard working employees for the most part who were caught up in a bad economy, isn't that punishment enough? I think it is possible that COBRA participants are up because the number of people laid off is up. The subsidy makes it possible for these people to retain much needed coverage. Some of the comments appear harsh; begrudging someone medical coverage when they are trying to exist on unemployment insurance seems cold. The company is not absorbing the cost of the subsidy; they are reimbursed so the costs involved would be premiums unless the company is self insured. Prior to the COBRA subsidy costly medical procedures such as organ transplant, cancer and heart surgeries did not affect our overall premiums by that much so I find it hard to believe premiums will substantially increase over the current use of COBRA. A continuation of the subsidy would not be the worst thing that could happen. These were loyal hard working employees for the most part who were caught up in a bad economy, isn’t that punishment enough?

]]> By: Stacy http://www.hrmorning.com/do-cobra-subsidies-lead-to-more-coverage-and-higher-premiums/comment-page-3/#comment-23294 Stacy Wed, 26 Aug 2009 19:37:32 +0000 http://www.hrmorning.com/?p=4168#comment-23294 So true Judy, that would be sticky. I also glad to see such good information passed around about COBRA period. I have learned a lot from this thread. In reading some of the posts I empathize and sympathize with those of you who have to go this alone. My TPA has very reasonable fees and my Sr. Management didn't need much convincing because they felf it's a small price to pay to keep your company out of hot water. So true Judy, that would be sticky. I also glad to see such good information passed around about COBRA period. I have learned a lot from this thread. In reading some of the posts I empathize and sympathize with those of you who have to go this alone. My TPA has very reasonable fees and my Sr. Management didn’t need much convincing because they felf it’s a small price to pay to keep your company out of hot water.

]]> By: Stacy http://www.hrmorning.com/do-cobra-subsidies-lead-to-more-coverage-and-higher-premiums/comment-page-3/#comment-23292 Stacy Wed, 26 Aug 2009 19:28:44 +0000 http://www.hrmorning.com/?p=4168#comment-23292 SHELLY: They do every single thing. All I need to do is enter termination demographics into the website (which is better than faxing because I hated that) and they do the rest. One good thing I found out is that they are VERY strict on the timeline they give former employees to have their payments collected. If you are 1 day late, they cut your benefits off right then and there. Could that be a problem? Once in a blue moon but it's the fault of the former employee and it takes no time for me to fix. Plus, I understand struggling to pay so it's no biggie. We have given them the authority to add and delete coverage from our healthcare provider, that way, nothing falls between the cracks. With our former TPA, the former employee would opt for COBRA, have to send the paperwork back to them via US mail (when they got around to it), then the TPA would notify me by US Mail and it screwed up my billing because by the time all this was done, the employee would have another job and cancel. That drove me nuts!!! The only time I hear from United Healthcare is if they can't reach a person because they can't contact them at the address or phone number I had they call me to see if I have a cell phone number. Not sure what they do if they can't contact but I think the send the information hoping it will be forwarded and keep the return to sender info in the file. I usually keep track what is happening with the former employee by going into the website to follow up. It couldnt' be easier. Our fees are reasonable but at first, I had a problem with the minimum $35.00 administrative charge if you only have 1 or 3 people on the plan at $9.50 each but, it's not a lot of money to haggle over for the convenience. SHELLY: They do every single thing. All I need to do is enter termination demographics into the website (which is better than faxing because I hated that) and they do the rest. One good thing I found out is that they are VERY strict on the timeline they give former employees to have their payments collected. If you are 1 day late, they cut your benefits off right then and there. Could that be a problem? Once in a blue moon but it’s the fault of the former employee and it takes no time for me to fix. Plus, I understand struggling to pay so it’s no biggie. We have given them the authority to add and delete coverage from our healthcare provider, that way, nothing falls between the cracks. With our former TPA, the former employee would opt for COBRA, have to send the paperwork back to them via US mail (when they got around to it), then the TPA would notify me by US Mail and it screwed up my billing because by the time all this was done, the employee would have another job and cancel. That drove me nuts!!! The only time I hear from United Healthcare is if they can’t reach a person because they can’t contact them at the address or phone number I had they call me to see if I have a cell phone number. Not sure what they do if they can’t contact but I think the send the information hoping it will be forwarded and keep the return to sender info in the file. I usually keep track what is happening with the former employee by going into the website to follow up. It couldnt’ be easier. Our fees are reasonable but at first, I had a problem with the minimum $35.00 administrative charge if you only have 1 or 3 people on the plan at $9.50 each but, it’s not a lot of money to haggle over for the convenience.

]]> By: Shelley http://www.hrmorning.com/do-cobra-subsidies-lead-to-more-coverage-and-higher-premiums/comment-page-3/#comment-23289 Shelley Wed, 26 Aug 2009 18:58:14 +0000 http://www.hrmorning.com/?p=4168#comment-23289 I don't think we are expected to police this issue. They have to answer the question as to if they have access to "other group insurance" (which could be VA, retirement, etc.). There is no stipulation that I have found that it has to be comparable coverage. The questions are very general when asking if they have access to other group insurance. The administration probably does not have a system in place to police this though. My response to people is to keep in mind that when you are answering these questions, if you answer falsely, you could be subject to penalties and required to pay 110%. I don’t think we are expected to police this issue. They have to answer the question as to if they have access to “other group insurance” (which could be VA, retirement, etc.). There is no stipulation that I have found that it has to be comparable coverage. The questions are very general when asking if they have access to other group insurance. The administration probably does not have a system in place to police this though. My response to people is to keep in mind that when you are answering these questions, if you answer falsely, you could be subject to penalties and required to pay 110%.

]]> By: Kathy http://www.hrmorning.com/do-cobra-subsidies-lead-to-more-coverage-and-higher-premiums/comment-page-3/#comment-23287 Kathy Wed, 26 Aug 2009 18:50:41 +0000 http://www.hrmorning.com/?p=4168#comment-23287 Are we expected to police this issue with regard to other available insurance? If a terminated employee claims he doesn't have access to spousal insurance or it's insufficient to cover his specific medical issues, how do we verify this? I'd be more afraid of denying the subsidy since no one knows how these issues are going to be dealt with by a court if an employee complains. Are we expected to police this issue with regard to other available insurance? If a terminated employee claims he doesn’t have access to spousal insurance or it’s insufficient to cover his specific medical issues, how do we verify this? I’d be more afraid of denying the subsidy since no one knows how these issues are going to be dealt with by a court if an employee complains.

]]> By: Patricia http://www.hrmorning.com/do-cobra-subsidies-lead-to-more-coverage-and-higher-premiums/comment-page-2/#comment-23285 Patricia Wed, 26 Aug 2009 18:42:42 +0000 http://www.hrmorning.com/?p=4168#comment-23285 Shelley, The groups we have used and those that were mentioned in this thread will do it all. When we have had COBRA paired with the insurance carrier, they also reinstate the employee's coverage when they receive and post the employee's payment and terminate the employee's coverage when they don't pay and their grace period has expired. They also provide reporting. We use a different carrier for vision and they work with the outside carrier for the vision benefits. When processing a termination, we just need to notify them that the person had vision coverage with this other provider. Patricia Shelley,

The groups we have used and those that were mentioned in this thread will do it all. When we have had COBRA paired with the insurance carrier, they also reinstate the employee’s coverage when they receive and post the employee’s payment and terminate the employee’s coverage when they don’t pay and their grace period has expired. They also provide reporting. We use a different carrier for vision and they work with the outside carrier for the vision benefits. When processing a termination, we just need to notify them that the person had vision coverage with this other provider.
Patricia

]]> By: Judy Buckley http://www.hrmorning.com/do-cobra-subsidies-lead-to-more-coverage-and-higher-premiums/comment-page-2/#comment-23284 Judy Buckley Wed, 26 Aug 2009 18:27:14 +0000 http://www.hrmorning.com/?p=4168#comment-23284 Stacy: You can't really force a person eligible for spousal insurance to take it. But, the COBRA subsidy is only available to those involuntarily laid off and who are not eligible for coverage on a spouse's plan. So, their choices are to take the spouse's coverage (likely with the higher premium) or take the COBRA without the subsidy, or go without insurance. I agree with many of the things Patricia, Kevin and Stacy have said and thankful to see balanced, reasonable positions and not partisan rants. Also, haven't had time to read all the posts, but am glad to see actual helpful info being passed along re third party administrators. When we started with Conexis, we had exactly one person on COBRA, but now, with a 20% staff reduction in force layoff, I am so glad I only have to notify Conexis and they keep up with the notices. I'm anticipating at least some of those laid off will take the COBRA with the subsidy. We usually do not get much COBRA participation. Stacy: You can’t really force a person eligible for spousal insurance to take it. But, the COBRA subsidy is only available to those involuntarily laid off and who are not eligible for coverage on a spouse’s plan. So, their choices are to take the spouse’s coverage (likely with the higher premium) or take the COBRA without the subsidy, or go without insurance. I agree with many of the things Patricia, Kevin and Stacy have said and thankful to see balanced, reasonable positions and not partisan rants. Also, haven’t had time to read all the posts, but am glad to see actual helpful info being passed along re third party administrators. When we started with Conexis, we had exactly one person on COBRA, but now, with a 20% staff reduction in force layoff, I am so glad I only have to notify Conexis and they keep up with the notices. I’m anticipating at least some of those laid off will take the COBRA with the subsidy. We usually do not get much COBRA participation.

]]> By: Shelley http://www.hrmorning.com/do-cobra-subsidies-lead-to-more-coverage-and-higher-premiums/comment-page-2/#comment-23283 Shelley Wed, 26 Aug 2009 18:17:46 +0000 http://www.hrmorning.com/?p=4168#comment-23283 Stacy- So do they just send your notices or do they collect payments, track everything, etc. too? Stacy-
So do they just send your notices or do they collect payments, track everything, etc. too?

]]> By: Patricia http://www.hrmorning.com/do-cobra-subsidies-lead-to-more-coverage-and-higher-premiums/comment-page-2/#comment-23281 Patricia Wed, 26 Aug 2009 17:48:07 +0000 http://www.hrmorning.com/?p=4168#comment-23281 We are also self-insured and have locations in 20 states and 1000 employees. We have an ASO arrangement with one carrier and we will probably change carriers for the 2010 plan year. We have an indemnity plan in place for the handful of people that do not have adequate network access with this carrier but it is only necessary for 30 employees. Dental, COBRA and FSA are all in the same plan with our current carrier. We used to include EAP and life/disability with the same carrier when we were with Aetna. We negotiated a really good rate by offering to give Aetna all our ancillary lines in addition to all our medical. Now we use a different life/disability and EAP vendor but I will gladly dangle that carrot in the future to any health insurance carrier if we can get better rates by combining all of our benefits under one carrier. We looked at the TPA route and it was far too confusing for everyone and we wanted one carrier across the country. You pay a few bucks more for an ASO arrangement but the big carriers can negotiate some darned good discounts. It can save you tons in administration time and effort. Everything can be centralized. One benefit enrollment kit works for the entire company. Reporting is easier and cleaner as well. The former owners used a TPA and they were horrible. We had to do a full year of runout on the old plan because 8-9 months after leaving them, they were still processing hundreds of thousands in claims each month from the prior year. When we moved from Aetna for the 2007 plan year, Aetna had 95%+ of the claims wrapped up in 3 months. It made a huge difference. (I still love Aetna.) We also have the most amazing Broker/Consultant group. Our execs LOVE them. In addition to RFPs for our renewal, plan design and claims reviews, we work together all year to strategize and manage the plans and come up with cost saving measures. We took our enrollment online and we do monthly benefit orientation webinars together for the field employees since we are so geographically separated. They put together all our open enrollment kits and they help me send them out to the 150+ locations. Plus we negotiated a flat fee monthly consulting payment instead a % commission on the benefit plans so we can control our costs with them and keep the plan costs down. It has been a good arrangement with for us. It has made my life easier and the execs are happy so something seems to be working. Patricia We are also self-insured and have locations in 20 states and 1000 employees. We have an ASO arrangement with one carrier and we will probably change carriers for the 2010 plan year. We have an indemnity plan in place for the handful of people that do not have adequate network access with this carrier but it is only necessary for 30 employees. Dental, COBRA and FSA are all in the same plan with our current carrier. We used to include EAP and life/disability with the same carrier when we were with Aetna. We negotiated a really good rate by offering to give Aetna all our ancillary lines in addition to all our medical. Now we use a different life/disability and EAP vendor but I will gladly dangle that carrot in the future to any health insurance carrier if we can get better rates by combining all of our benefits under one carrier.

We looked at the TPA route and it was far too confusing for everyone and we wanted one carrier across the country. You pay a few bucks more for an ASO arrangement but the big carriers can negotiate some darned good discounts. It can save you tons in administration time and effort. Everything can be centralized. One benefit enrollment kit works for the entire company. Reporting is easier and cleaner as well.

The former owners used a TPA and they were horrible. We had to do a full year of runout on the old plan because 8-9 months after leaving them, they were still processing hundreds of thousands in claims each month from the prior year. When we moved from Aetna for the 2007 plan year, Aetna had 95%+ of the claims wrapped up in 3 months. It made a huge difference. (I still love Aetna.)

We also have the most amazing Broker/Consultant group. Our execs LOVE them. In addition to RFPs for our renewal, plan design and claims reviews, we work together all year to strategize and manage the plans and come up with cost saving measures. We took our enrollment online and we do monthly benefit orientation webinars together for the field employees since we are so geographically separated. They put together all our open enrollment kits and they help me send them out to the 150+ locations. Plus we negotiated a flat fee monthly consulting payment instead a % commission on the benefit plans so we can control our costs with them and keep the plan costs down.

It has been a good arrangement with for us. It has made my life easier and the execs are happy so something seems to be working.

Patricia

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