Signing up for COBRA: Yes! ( or Thank you Obama and the Country for passing the American Recovery and Reinvestment Act (ARRA) 2009 )

Since my last day at Microsoft was the 23rd of March, one important decision I had to make was signing up for COBRA. If you don’t know, COBRA stands for Consolidated Omnibus Budget Reconciliation Act. There is lots of information available, but in summary, it’s a temporary form of health coverage that you can elect to have until you are able to obtain insurance again through your employer or through an individual plan. In the past, it was difficult to choose to select since even for a single guy like myself, COBRA normally would have cost $323.00/month. That’s right, for a single month’s of health coverage for a single, healthy male, it would cost over three hundred dollars! That’s not even including dental which will add between $20-50 to the final price. Of course, you could always try to get an individual plan, but the coverage is usually pretty terrible, and of course you have to submit to a test for pre-existing conditions. Hopefully you’ve never had a lapse in coverage, but if you have, then you’ll probably be rendered ineligible or priced out of reason.

Let’s assume you qualify, here are the rates for a single, non-smoking male around 30 years of age through Group Health Cooperative:

Plan Name and Deductable Coinsurance % Office Visit Monthly Cost
Balance 5000 Catastrophic Plan 50 $30 $62
HSA 2000 Catastrophic Plan 10 10% $71
Welcome 3500 Plan 50 50% $73
Balance 2500 Catastrophic Plan 40 $30 $75
Welcome 1750 Plan 40 40% $89
Balance 1500 Plan 30 $30 $192
Balance 1000 Plan 20 $30 $228
Welcome 500 Plan 20 $30 $262

As you can see, there are certainly much cheaper plans, but you’ll also notice that the coverage is sketchy at best. Although you have health insurance, having a $2500 deductable on top of $30 co-pays and a $75 per month fee isn’t exactly reassuring. It make sure you have coverage for a single catastrophic event, but you’ll be buried in debt after 2 years of this. And you can see that the better plans have monthly costs that rise sharply – the first plan to hit a $1500 deductable is almost two hundred a month. Still cheaper than COBRA, but the coverage and overall costs with Coinsurance and deductable is much worse than most employer plans.

Well, what to do? Well Hallelujah! In 2009, President Obama and the American People passed the American Recovery and Reinvestment Act (ARRA). The long and the short of it means that if you are an eligible worker ( getting laid off from Microsoft counts ), you are on the hook for 35% of your COBRA premium for 9 months. Through a combination of government dollars and whatever else, the other 65% is paid for. This means that the $323.00 per month a single male like myself would normally pay gets a subsidy of $209.95 bringing the total cost down to $113.05!!! That’s lower than the Balance 1500 plan and offers significantly better benefits! On top of that, it’s now SUPER easy to sign up for COBRA benefits. Just head on over to http://cobra.ehr.com. Your separation paperwork from MS should have your User ID. To create a new user id, just click on the link above the login text boxes:

image

Here is the tricky part. During your user creation, there will be a screen asking you to accept the ARRA money. DO IT!!! It’s your ONLY chance to accept it. Once you waive it, you are done! I’m sure there is a way in case you accidentally click no, but don’t cause yourself pain. Getting laid off is hard enough already. Just be careful and select the right option!

Once you are logged in, you’ve only got 1 option:

image

Just proceed and setup your COBRA enrollment. The only other tricky part is your subsidized cost won’t show up until you enter in all your information. So don’t get freaked out by the high cost, it will show your actual cost in the final screen. One more word of advice, when you print the summary for your records, select Landscape otherwise part of the data will get cutoff.

So there you go! Your government dollars at work! I hope this helps someone get the health coverage they need at a price they can afford until they get a job. I know I am really thankful for this.

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