Economy Project: Health Insurance Discount For Unemployed
By Alexis Yancey, KERA News
Dallas, TX –
If you lose a job with health insurance, the government requires employers to offer you the chance to keep those benefits for 18 months. It's called COBRA. But COBRA premiums can be expensive so the Obama Economic Recovery Plan created a more affordable COBRA benefit for laid off employees. In our Monday KERA economy segment, Alexis Yancey reports on how it may help struggling families.
When Rusty Nail lost his IT sales consulting job last January, his wife Belinda, a part time book keeper, became the family's breadwinner.
"We've pretty much cut back to the necessities and cut out all the luxuries," she says. "We don't go out to eat, we don't hardly go to the movie anymore."
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"Medical benefits are really expensive and so we always have to take a look at what they cost vs. getting private insurance or using COBRA," he says. "So what we chose to do this time was to take COBRA."
COBRA allows those who've lost jobs to continue their medical benefits but they usually have to pay 100 percent of the premium. COBRA benefits are only available to individuals who worked for a company with more than 50 employees. Many unemployed workers can't afford it. But thanks to the Federal Recovery Act, laid off employees now just pay just a portion of that cost. Debbie Kratky of Workforce Solutions for Tarrant County explains how the COBRA premium benefit works.
"If you, lost your job and you want to continue your health insurance, the government will pay the employer, through tax credits, 65 percent of that premium you would have to pay," Kratky says. "That's huge. It can make the difference between a person being able to afford it or not."
"It ended up costing us just $266 a month which in my opinion is affordable compared to the $700 and something it was going to cost us," says Belinda Nail. "It's saves us over $500 a month and that's a lot of money."
The benefit started last February and lasts up to nine months. Right now it applies to employees laid off through December 31st of this year. Your former employer should send you the discount premium rate and application. And, you must request COBRA coverage within 60 days of losing your job. If you didn't get notified, contact your former human resources manager.
Debbie Kratky says families with children experiencing lower income might qualify to save even more by using the COBRA benefit just for parents. Other options can cover children.
"If you've got children and you're under the income limit for a program like CHIP, the Children's Health Insurance Program or Medicaid, you can take those children and get them certified on Medicaid or CHIP," she says."Now you just have the adults in the household that you have to cover under COBRA."
Belinda and Rusty don't have children, but Belinda plays tennis and Rusty lost 50 pounds and has kept it off, cycling thousands of miles a year.
Their active lifestyle makes health insurance a must.
"All it takes for me is just once to fall of my bicycle or get hit and it could be thousands of dollars," says Rusty.
This is Belinda and Rusty's ninth and last month for the COBRA discount. But lawmakers just proposed to continue the benefit for laid off workers through June 2010 and increase the premium discount from 9 to 15 months. An extension would help Belinda and Rusty because he still hasn't found a job.
"We're looking at paying almost $900 a month without the assistance," says Belinda. "With the assistance we're looking at probably $300 a month."
"A lot of people will benefit," she says. "I think it puts the money in the hands of the people that need it. Programs like cash for clunkers, that doesn't put any money in our hands. We're out of work and we need money to pay those bills so this exactly goes into our pocket."
Congress is expected to vote on extending benefits before the holiday recess. Go to KERA.org/economy for more on COBRA benefits.