Uncertainty is the word of the day.  Employers were uncertain if the Cobra subsidy would be extended, and employees were wondering also.  Employers are relieved they no longer have to administer this subsidy, and employees are dealing with reality that they are on their own to solve their problems.  At Replace Cobra  , we provide solutions to those facing large Cobra premiums.   One item that most people do not realize, is that Cobra can be owned individually, and is no longer tied to the past employee.   For those people that have health issues, keeping Cobra for that solo person, and placing the family on a private insurance plan will save the average family $500/mo compared to Cobra premium.   Most states have a robust private market.  Contact a local agent to get educated on solutions in the market.

Read more:  Benefits Pro – Life without the Cobra Subsidy

As of Sept. 1, Americans who were laid off between September 2008 and May 2010 are no longer eligible for the COBRA subsidy, which was passed under the American Recovery and Reinvestment Act.

The COBRA subsidy covered 65 percent of COBRA premiums for 15 months of the program’s 18-month eligibility, meaning unemployed participants are now responsbile for all costs during the last three months.

But some employers were surprised to learn the subsidy was coming to an end so soon. Given all of the political posturing and the poor economic environment, those employers could have been under the impression that the subsidy was available for the full 18 months.

“The government had extended the subsidy and actually made some of them retroactive if they hadn’t acted in time, so that may have caused a perception that because of the high unemployment and the continued economic uncertainty that Congress would have extended the subsidies again,” says Steve Wojcik, vice president of public policy for National Business Group on Health.

The effects for unemployed workers

Now that the unemployed participants are footing the entire COBRA bill, many are wondering if they can afford to keep their coverage. Unemployment already provides a tough situation for millions of Americans, but adding those additional premium costs just makes the situation that much harder.

“I’m sure it’s going to be a tough situation,” Wojcik says. “The long-term unemployed are growing in numbers, and if they still have COBRA eligibility as their subsidies run out, they have to make that tough decision about whether they want to pay the full amount now, minus the subsidies, or give up their coverage, be uninsured and risk having some kind of big health claims without any insurance.”

It seems to me that the well intended Cobra Subsidy was just another federal game of picking winners and losers.   The Cobra Subsidy was available for much of the recession to those that lost their jobs.  But where you worked, the size of the company, and how benefits were purchased determined if you were eligible.  The winners:  employees of larger companies.  The Losers:  Everyone else including the self employed, those companies with under 20 employees with no Cobra available at all, employees of companies that went bankrupt, and those who bought private insurance with an employer stipend.  Finally, this unfair game has ended.

Starting Sept 1st, 2011; thousands of Americans will begin to lose their subsidy to assist in paying 65% of their Cobra health insurance costs.  As an agent, I never found a situation where a client should have turned down the subsidy.  $350/mo for a family of four on a cadillace plan was impossible to beat on the open private health insurance market.  Now that the cobra subsidy has expired, many are on their own to get coverage and keep the costs low.  Most states have a robust marketplace, and with the assistance of an agent, you have  a better chance to avoid mistakes, give insight into underwriting differences, rate ups, exclusion riders, and of course….price and benefits comparison.  One way to get in touch with an agent in your state is by visiting ReplaceCobra.com

Read entire article here:  McClatchy – Federal Subsidy for Cobra health covearge to expire

or here at Kaiser Health News

Since late last summer, thousands across america have begun to lose their Cobra subsidy which was provided to them for 15 months through various government passed legislation over the past couple years.  Most individuals and families have never shopped for their own health insurance policy in their entire lives because they always got it through their employer who did the choosing.

Now, you can do it on your own, or save time and money by seeking a professional.  I, of course, recommend that you contact a local independent health insurance agent, who brokers all insurance companies, and who basically does the shopping for you.  This local advice and consultation comes for free, as the agent only gets paid a commission if they get you approved for a plan that you want, at the price you need.

Health care reform has made shopping for health insurance even more difficult, and creates even more need for a health agent.  Also, until 2014 when guaranteed issue starts (pre-existing conditions won’t matter), underwriting will still be the major determinant of an agents’ success in getting you approved.

If you cannot get approved, you will have to stay on the Cobra plan for the full 18 months, and then apply for a “guaranteed issue”/”HIPAA Portability Conversion” plan offered in most states, and at increased rates.  Otherwise, depending on the health conditions, you may want to consider a short term health insurance plan.  Once declined somewhere, you are ineligible for a short term plan and you’ve just reduced one of your cheaper options.  A good agent will warn you of a possible decline, and provide the alternatives.