MOUNTAIN VIEW, CA, Nov 10, 2009 (MARKETWIRE via COMTEX) -- eHealthInsurance (NASDAQ: EHTH) (http://www.ehealthinsurance.com),
the leading online source of health insurance for individuals,
families, and small businesses, has released an updated set of
frequently asked questions (FAQs) for individuals and families whose
access to the COBRA subsidy is scheduled to end after November 30,
2009.
The American Recovery and Reinvestment Act of 2009 (ARRA), which
President Obama signed into law on February 17, 2009, included a 65
percent COBRA subsidy designed to help cover the cost of COBRA
insurance premiums for up to 9 months. The COBRA subsidy has helped
millions of Americans afford COBRA coverage. The number of
qualifying persons electing COBRA has doubled since the subsidy was
introduced(1).
The first recipients of the nine-month subsidy, which include anyone
who began receiving premium subsidies when they first became available
in March 1 of 2009, will lose their federally-sponsored subsidies
covering 65 percent of the cost of COBRA insurance premiums on
December 1, 2009. As a result, they may have to pay nearly three
times more out of their own pockets to continue their health
insurance under COBRA.
While Congress is considering extending the COBRA subsidy benefits,
eHealthInsurance has released the following FAQs to address both
individuals and families who have been receiving the federal COBRA
subsidy as well as other persons recently laid off and looking for
affordable health insurance options:
FAQs Regarding the COBRA Subsidy Expiration:
1. Question: Will the federal COBRA subsidy be extended?
Answer: Congress is considering legislation to extend the COBRA
subsidy. However, it is important to note that since COBRA currently
only lasts 18 months, COBRA is not a long-term solution.
In the meantime, consumers should explore all of their options,
including private health insurance. Searching, applying and
qualifying for private health insurance alternatives to COBRA can
take time, so consumers whose subsidies may end in the next three
months should begin looking now.
2. Question: My COBRA subsidy is scheduled to run out but I still
don't have employer-sponsored health insurance -- what should I do?
Answer: If you are married and your spouse now has employer-based
coverage, you should compare the cost of coverage under that policy
with the cost of a private plan to determine which solution is best
for you. Otherwise, anyone who is relatively healthy and worried that
they won't be able to afford non-subsidized COBRA premiums should
research their options in the private health insurance market. You
may find that premiums are comparable to what you are paying with
subsidized COBRA. The Kaiser Family Foundation estimates the average
cost of a subsidized COBRA policy would be $398 per month for a
family and $144 for an individual(2). By comparison, a 2009 survey
of 316,000 eHealthInsurance customers in this market showed that half
of all family health insurance policy holders paid less than $329 per
month and half of all individual health insurance policy holders paid
less than $132 in monthly premiums(3).
3. Is there any risk in applying for private health insurance while
I'm still on COBRA?
Answer: Your continued eligibility for COBRA is not affected by
applying for a private health insurance plan. Once approved for
private coverage, you can simply stop paying your COBRA premiums, and
your COBRA coverage will expire. However, if you are denied coverage
through a private health insurance plan (due to a pre-existing
medical condition, for instance), you can still keep your COBRA
coverage until your full 18 months of COBRA runs out.
Keep in mind that when applying for private health insurance some
carriers may charge you an application fee, usually no more than $30,
that may not be refundable. When searching for plans on
eHealthInsurance.com, you will be able to quickly identify which
plans have or don't have application fees.
4. Question: What if my subsidy funds are running out and I have a
pre-existing medical condition?
Answer: If you have a pre-existing medical condition, you should
talk to a licensed health insurance agent. Your best option may be
to continue COBRA coverage, but an agent can let you know if there are
affordable alternatives available.
If you absolutely cannot afford unsubsidized COBRA coverage, check
out other government-sponsored options available in your state. The
Foundation for Health Coverage Education (FHCE) has an excellent web
site and their U.S. Uninsured Help Line can connect you with
publicly-funded programs in your state. Their web site is
www.coverageforall.org and their toll-free number is 800-234-1317.
5. Question: What if I apply for a private health insurance plan and
then find out that the COBRA subsidy will be extended after all?
Answer: Individual and Family insurance coverage is paid for on a
month-to-month basis and you may cancel it at any time. Your options,
should the subsidy's nine month limit be extended, will depend to
some degree on what Congress stipulates in the new legislation.
If your subsidized COBRA coverage was set to expire December 1, 2009,
and you apply and are approved for a private health insurance plan
with coverage beginning on that same date, you may be able to preserve
both options and have some flexibility in your decision. Once you
have been approved for a private health plan, you can make a decision
to either stay on COBRA -- at full premium or with subsidy funds if
the subsidy is extended -- or opt out of COBRA and go on to a private
policy. Again, keep in mind that when applying for private health
insurance some carriers may charge you an application fee, usually no
more than $30, that may not be refundable.
If the subsidy limit is not extended, for example, you could cease
paying COBRA premiums on December 1, 2009 and begin coverage under
your private market plan. Alternately, if the COBRA subsidy is
extended, you may cancel your private health insurance plan and
continue paying your COBRA premiums.
Make sure that you have been approved for and issued a private health
plan before cancelling COBRA.
6. Question: If I drop COBRA, can I re-enroll in COBRA at a later
date?
Answer: With regards to the COBRA subsidy, it is unclear if any new
legislation will allow for people to return to their COBRA coverage
after cancelling it. Generally with COBRA coverage, you can only opt
out and opt back in to COBRA within the first 60 days of your
eligibility. If you cancel your COBRA coverage after that initial
eligibility period, you cannot re-apply for COBRA coverage through
the same group plan(4).
Always check with your COBRA administrator or a licensed health
insurance agent before making any final decisions, just so you can be
aware of any changes in COBRA benefits.
7. Question: What if I just started receiving the COBRA subsidy a
month ago -- are my funds going to dry up after November too?
Answer: No. If you qualified for the COBRA subsidy in the first
place, the law currently provides that you will continue to receive
assistance with your monthly premiums for a total of nine months from
the date you started receiving the subsidy.
8. Question: Isn't this all going to change when health insurance
reform legislation is passed?
Answer: If enacted, the proposed health reform legislation will not
be implemented overnight. In fact, many of the health insurance
reforms in the draft legislation are not expected to take effect
until 2013.
Although the proposed health reform legislation seeks ways to lower
the overall cost of health care in our country, this does not
necessarily mean that health insurance will cost less for everyone.
In the event that a more affordable public, non-profit, or private
option becomes available in the future, you may cancel any plan by
contacting the carrier directly and then buy the less expensive
option.
General FAQs Regarding the Federal COBRA Subsidy:
NOTE: All responses below reflect COBRA subsidy benefits as outlined
in The American Recovery and Reinvestment Act of 2009 (ARRA), signed
into law on February 17, 2009, and do not reflect any proposed
legislation on the extension and expansion of the COBRA subsidy.
9. Question: How do I receive the subsidy for COBRA?
Answer: The first thing you need to do is be sure you qualify (see
eHealth's COBRA Learning Center FAQ). The subsidy for COBRA will be
administered through your former employer or benefits administrator.
Make sure your employer has your most recent contact information.
If you qualify for your spouse's plan, another group healthcare plan
or Medicare, you're not eligible for the subsidy. If you fail to
notify your COBRA plan administrator about this eligibility for other
plans, you may face tax penalties.
10. Question: If I don't qualify for the subsidy what can I do?
Answer: Private Individual and Family health insurance is a good
option. Persons in relatively good health often find plans less
expensive than COBRA -- even with a 65% subsidy -- in the private
health insurance market. If you have a pre-existing medical
condition that could make it difficult to obtain coverage on your
own, there may also be government-sponsored public options available
to you. See the answer to question #1 above for more information and
resources.
11. Question: If I was fired rather than officially laid off, does
that make a difference?
Answer: COBRA and the COBRA subsidy are available to employees whose
employment was involuntarily terminated (for reasons other than gross
misconduct) and who are not eligible for health insurance coverage
through other group health coverage, such as their spouse's plan or
Medicare. Depending on the circumstances of your departure from the
company, you may qualify for COBRA and the subsidy.
12. Question: When does the clock start for my 9-months of subsidized
COBRA?
Answer: If you are laid off on or before December 31, 2009, your
subsidized COBRA coverage begins as soon as the subsidy funds are
first applied to your monthly COBRA premiums. If you lose your job
after December 31, 2009, you will not be eligible for the subsidy
unless congress opts to extend the eligibility deadline.
13. Question: I worked for a non-profit organization and lost my job.
Am I still eligible? If my former employer doesn't pay taxes, how will
they get reimbursed for my COBRA premiums?
Answer: Assuming you meet the other qualifications, you will get the
subsidy, even if you were working for a non-profit. The subsidy for
COBRA is being financed by employers who are, in-turn, receiving a
pay-roll tax credit for the expense. Any company with employees on a
pay-roll pays these taxes -- including non-profits. And employers
that pay the 65% subsidy for COBRA premiums will get to deduct the
cost of these subsidies from their pay-roll tax contributions.
14. Questions: My hours were cut back from full-time to part-time and
I lost my group coverage. Do I qualify for the subsidy?
Answer: No. You may be eligible for COBRA, but not for the COBRA
subsidy because you have not been terminated involuntarily.
Footnotes:
(1) SOURCE (link): Hewitt and Associates, August 18, 2009, "Hewitt
Analysis Shows Average COBRA Enrollments Doubled Since Subsidy Became
Available in February 2009"
(2) SOURCE (link): Henry J. Kaiser
Family Foundation, The COBRA Subsidy and Health Insurance for the
Unemployed, October, 2009, page 3.
(3) SOURCE (link): eHealth,
Inc.'s 2009 report: The Cost of Individual and Family Health
Insurance Plans 2009 Update.
(4) SOURCE (link): U.S. Department of
Labor, FAQs for employees About COBRA Continuation Health Coverage
For more information about the COBRA subsidy and a broader list of
general COBRA FAQs, please see:
-- eHealth's March 25, 2009 Press Release:
http://news.ehealthinsurance.com/pr/ehi/rel484940.aspx
-- eHealth's COBRA Learning Center: www.cobralearning.com
About eHealth
eHealth, Inc. (NASDAQ: EHTH) is the parent company
of eHealthInsurance, the nation's leading online source of health
insurance for individuals, families and small businesses. Through the
company's website, http://www.eHealthInsurance.com, consumers can get
quotes from leading health insurance carriers, compare plans side by
side, and apply for and purchase health insurance. eHealthInsurance
offers thousands of health plans underwritten by more than 180 of the
nation's leading health insurance companies. eHealthInsurance is
licensed to sell health insurance in all 50 states and the District
of Columbia, making it a functioning national health insurance
exchange. Through its eCommerce On-Demand solution (eOD),
www.ehealth.com/eOD, eHealth is also a leading provider of on-demand
e-commerce software services. eHealth's eOD platform provides a suite
of hosted solutions that enable health plan providers and resellers to
market and distribute products online. eHealth's eCommerce On-Demand
solution is currently available to health plan providers in all 50
states and the District of Columbia. eHealthInsurance and eHealth are
registered trademarks of eHealthInsurance Services, Inc.
For more information about individual and family health insurance
plans as an alternative to COBRA, please contact:
-- A licensed eHealthInsurance agent at 1-800-977-8860
-- Or go
online to www.COBRALearning.com
For information about public programs please contact:
-- The
Foundation for Health Coverage Education (FHCE) at 800-234-1317
--
Or go to their web site is www.coverageforall.org
For media inquiries, please contact:
Nate Purpura
eHealth, Inc.
(805) 215-3336
nate.purpura@ehealth.com
Sande Drew
eHealth, Inc.
(916) 207-7674
sande.drew@ehealth.com
SOURCE: eHealth, Inc.
mailto:nate.purpura@ehealth.com
mailto:sande.drew@ehealth.com
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