10 Updates

The Latest Problem With Obamacare Could Cost You

Apr 21 2014, 3:37pm CDT | by

There’s a new problem with Obamacare that affects anyone fired after March 31. Laid off workers who opt for temporary coverage under the Consolidated Omnibus Budget Reconciliation Act , known as...

Filed under: news

 
 
 

13 weeks ago

The Latest Problem With Obamacare Could Cost You

Apr 21 2014, 3:37pm CDT | by

There’s a new problem with Obamacare that affects anyone fired after March 31. Laid off workers who opt for temporary coverage under the Consolidated Omnibus Budget Reconciliation Act , known as COBRA, while they evaluate options under the Affordable Care Act, can’t switch to Obamacare until the next open enrollment period in November.

This creates a Catch-22, which can be especially devastating to those who have lost their jobs, says Donna M. Ballman, a Ft. Lauderdale, FL employment lawyer and author of the book, Stand Up For Yourself Without Getting Fired: Resolve Workplace Crises Before You Quit, Get Axed or Sue the Bastards . “It’s a huge issue for all those who lose their job outside of an open enrollment period.” And it hits them at a time when they are most vulnerable.

By way of background, under COBRA, if you leave the company or are fired you are entitled to continue your health insurance plan through your employer, and pay your own way. Even if your insurance was cut off when you were fired, the employer must notify the plan administrator within 30 days that you were terminated, and then the administrator has another 14 days to send you the notice on how to elect COBRA coverage. The downside is you must pay 100% of the premium, which will be very expensive, and COBRA coverage normally only lasts for 18 months. (See Ballman’s guest post, “What To Do For Health Insurance When You Lose Your Job .”)

Until recently, Ballman says, she would advise laid-off workers to elect COBRA temporarily, research the much less expensive coverage through the insurance exchanges marketplace offered under the Affordable Care Act, and then switch.

That all changed when the open enrollment period for Obamacare ended on March 31 . Now if workers choose COBRA coverage, even for a month, they are trapped within its much more expensive coverage until the next open enrollment period, Ballman wrote in a recent post on Aol Jobs . That adds one more thing to cope with at a time when people are emotionally devastated from getting fired. Nor is it a decision that laid off workers can get help with when they call the Affordable Care Act hotline, since those manning the phones are only trained to tell them about Obamacare.

Note that in a limited number of situations, involving what the Affordable Care Act calls a qualifying life event , you can sign up for Obamacare outside one of the enrollment periods. For example, after losing your job you are allowed to enroll within 60 days whether or not your job loss coincides with an open enrollment period. Once your COBRA coverage expires (usually after 18 months) you can also enroll in Obamacare without waiting for the next open enrollment period.

Here’s how the Obamacare gap wrecks havoc in some other common situations.

Your employer cuts off your health insurance the day you are fired. First step: make sure they’re not cheating you out of coverage you’ve already paid for by having insurance premiums deducted from your paycheck. Then consider your options for future coverage.

Most people don’t have the presence of mind to get on the Affordable Care Act or choose COBRA right away, Ballman says. They wait a month or more to get the COBRA notice and then make the decision.

What happens if you have medical costs during the gap period? A client of Ballman’s lost her job and her health insurance the day before her four children had appointments for a checkup at the pediatrician. (Talk about bad timing!) At the doctor’s office, an administrative assistant told this poor mother that her health insurance was declined. If she elects and pays for COBRA, those expenses will be covered retroactively. But if the family chooses Obamacare, they aren’t. What’s more, it takes at least three or four days after you apply for Obamacare for it to cover you, Ballman says. So even if you applied for it right away, there would be a gap, and even a healthy person could have an emergency during that time.

You have a chronic or pending health problem. This creates a Catch-22 if you lose your coverage the day you lose your job. You will need to elect COBRA to cover expenses retroactively. And once you do that you can’t switch until the next open enrollment. “So either you have a gap in coverage or you’re trapped in COBRA,” Ballman says.

Your severance package includes payment of COBRA premiums. Often severance agreements provide that the company will pay a month or two of its share of the health insurance premiums, as if the employee was still working there, and apply them to the 100% COBRA payment for which the employee would otherwise be responsible. In the past this would be considered a favorable term. “But now if you accept that payment, you elect COBRA,” Ballman says. And that means you’re stuck with it. So a better strategy is to ask the employer to give the employee the cash equivalent of the COBRA premium, so the laid off worker can elect Obamacare and use the money to pay that premium instead.

Still, this strategy doesn’t work for everyone. For example, one of Ballman’s clients who recently lost her job is getting ready to have surgery in early May. She can’t afford COBRA coverage, but because of all the moving parts – whether the doctor and the procedure will be covered, for example – she needs to elect COBRA temporarily. The company that just laid her off has offered to pay for one month of premiums under COBRA. After that, the client will no longer be able to afford the premiums. She will most likely go uninsured for six months until the next open enrollment period, and pay the tax penalty for not being insured, Ballman says.

Ballman finds herself explaining this problem not just to clients and to colleagues who represent workers, but also to company lawyers who help put together severance packages.

The gap was unintended – something no one thought about – Ballman says. “Whether or not you agree with the Affordable Care Act, everyone can agree that this little glitch needs to be fixed,” she notes. “You should be able to elect COBRA, get your ducks in a row, then switch to Obamacare.”

She thinks President Obama could correct the problem administratively – through an Executive Order – “if enough people raise hell about it.” She’s leading the charge with a White House petition , which must get 100,000 signatures by May 4 to get to the President.

At the time of posting, the White House had not replied to FORBES’ request for comment./>/>

Archive of Articles By Deborah L. Jacobs

Deborah L. Jacobs , a lawyer and journalist, is the author of Estate Planning Smarts: A Practical, User-Friendly, Action-Oriented Guide, now available in the third edition.

Stop Screwing Up Your Job Search In These Ten Ways

 
Update
10

6 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

Cambodia's Famous Battambang Circus
KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat was to ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

6 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

Splendour In the Grass 2014 - Byron Bay
KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was bro ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

6 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

Federal Aviation Administration Bans All US Flights To Israel
KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

6 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hisham ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

INDIA-CHINA-DIPLOMACY-TRADE
PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern states last ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

Government Weekly Cabinet Meeting
KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 mil ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mustapa Mohamed s ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

Iskandar Johor Open - Previews
JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

EurAsia Cup presented by DRB-HICOM - Day One
PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Sc ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara Skyway (K ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

2014 Luxury Watches Have Final US Preview Before Their Release
2014 Luxury Watches Have Final US Preview Before Their Release
2014 Watch Releases From Swatch Group Brands The Breguet Madison Avenue boutique was busy June 26 with press and VIP clientele as the luxury watch brand used this date to celebrate “Tourbillon Day.” The event included...
 
 
China to produce its own 'Avatar'
Beijing, July 28 (IANS) China is preparing to produce its own 3D fantasy movie, based on romantic folklore, to make it an epic on par with the US blockbuster science-fiction movie "Avatar".
 
 
Sushma meets UML leaders, ends Nepal visit
Kathmandu, July 27 (IANS) External Affairs Minister Sushma Swaraj Sunday averted a diplomatic disaster by meeting leaders of the ruling CPN-UML just before returning to India after a three-day visit which she said was "productive" and "successful".
 
 
Nepal parliament panel okays energy deal with India
Kathmandu, July 27 (IANS) A parliamentary panel in Nepal Sunday asked the government to sign as soon as possible a "Power Trade Agreement" (PTA) with India under which New Delhi has proposed 100 percent Indian investment or joint ventures with Indian entities in the Himalayan country's power sector.
 
 
 

Latest from the Network

Twin blasts in Nigeria kill five
Abuja, July 28 (IANS) At least five people were killed in two bomb blasts in Nigeria's Kano city, a mainly Christian area, Sunday afternoon, police said. The first blast occurred under a bridge in the Sabon Gari...
Read more on Politics Balla
 
Australia gives $5 mn for Gaza relief
Sydney, July 28 (IANS) The Australian government is providing five million Australian dollars (4.7 million US dollars) in urgent humanitarian assistance to Gaza, Foreign Minister Julie Bishop announced Monday. The...
Read more on Politics Balla
 
France wants expatriates to leave Libya
Paris, July 28 (IANS) French government Sunday called on all its nationals to quit Libya, "given the deteriorating security situation" prevailing in the African country. "All our nationals are invited to get in touch...
Read more on Politics Balla
 
Israel denies responsibility for UN school attack deaths
Jerusalem, July 28 (IANS) The Israeli army Sunday denied responsibility for the deaths of 16 Palestinians during Thursday's attack on a UN school in northern Gaza. "The inquiry as well as documented footage conclude...
Read more on Politics Balla
 
India lose badminton semi-final to England 3-0
Glasgow, July 28 (IANS) India lost to England 3-0 in the semi-finals of the badminton competition at the Commonwealth Games here late Sunday night. India's men's and mixed doubles teams fought well over three games,...
Read more on Sport Balla
 
Danielle O'Hara's husband accused of cheating
London, July 28 (IANS) Model Danielle O'Hara's footballer husband Jamie accused of cheating on her with a nightclub blonde. The news has surfaced just days after she unveiled a tattoo dedicated to her husband. Mirror....
Read more on Celebrity Balla
 
CWG: India knocked out by England in badminton
Glasgow, July 28 (IANS) India were knocked out of badminton semi-finals 0-3 by England, who will now play for gold against Malaysia, who struggled their way past Singapore 3-2 at the Commonwealth Games here. England...
Read more on Sport Balla
 
Real Madrid coach rules out another striker
Madrid, July 28 (IANS) Real Madrid coach Carlo Ancelotti has for the moment ruled out adding another striker to his star-packed squad. Speaking after his side's 1-1 draw against Inter Milan in California, which ended...
Read more on Sport Balla
 
Ricciardo wins F1 Hungarian Grand Prix
Budapest, July 28 (IANS) Red Bull driver Daniel Ricciardo of Australia, in his rookie year on the F-1 circuit, won the Hungarian Grand Prix Sunday. He managed to slide by Ferrari's Fernando Alonso (Spain) who finished...
Read more on Sport Balla
 
UN chief appeals Israelis, Palestinians to extend truce
United Nations, July 28 (IANS) UN Secretary-General Ban Ki- moon Sunday urged "in the strongest terms" both the Israelis and Palestinians to extend, for an additional 24 hours, the humanitarian ceasefire that was in...
Read more on Politics Balla