Belleville, Ill. (Vocus) April 15, 2009
Healthcare provisions in the 2009 American Recovery and Reinvestment Act (ARRA) may be crucial to those who have lost their jobs. That's especially true for people with disabilities no longer able to work, according to Allsup , a leading provider of Social Security disability, financial and healthcare-related services to people with disabilities.
The provision affects people who lost their jobs involuntarily between Sept. 1, 2008, and Dec. 31, 2009, and whose employers provide COBRA coverage.
"This part of the legislation aims to help people get access to healthcare coverage when otherwise they won't because of lost income and high costs," said Paul Gada, a tax attorney and personal financial planning director for the Allsup Disability Life Planning Center.
"Continuing healthcare and medical treatment is particularly important for people with progressive illness or conditions that keep them from returning to the work force," Mr. Gada said. "This economy is bad news for people who have been struggling physically to keep working because of a disability. Now they've lost their jobs and, as a result, they may have lost their healthcare coverage."
Allsup provides more information below and online about the ARRA COBRA provisions , including considerations for those who may be eligible for Medicare.
How the ARRA Affects COBRA
Under the ARRA, people who lost their jobs involuntarily between Sept. 1, 2008, and Dec. 31, 2009, and whose former employers offer COBRA coverage only have to pay 35 percent of their monthly premiums while the former employer picks up the remaining 65 percent (and is later reimbursed in the form of a tax credit). The COBRA premium reduction remains in effect for up to nine months.
Allsup provides more detail about involuntary versus voluntary termination on Allsup.com.
If you lost your job due to an involuntary termination within the period listed above and don't have access to other comprehensive healthcare coverage (such as Medicare or an employer plan), you are eligible for reduced-cost COBRA and the special enrollment period. You must make less than $125,000 for an individual or less than $250,000 for married people filing jointly. If you qualify, you should get a notice within the next 30 to 45 days from your former employer with details about your available options.
If You Chose Not to Use COBRA and Don't Have Coverage
Those who originally chose not to take advantage of a former employer's COBRA coverage for whatever reason and still are not covered (or don't have access to affordable healthcare coverage) can re-join a former employer's plan for the 65 percent premium reduction. In this case, you may be eligible for a special enrollment period of 60 days.
If You Use or Become Eligible for Other Healthcare Coverage
If you now have access to affordable, comprehensive healthcare coverage (e.g. offered through an employer or Medicare) or become eligible for such coverage, you cannot take advantage of lower-cost COBRA coverage under ARRA, whether or not you are currently on COBRA. So, if you're currently using your former employer's COBRA coverage and are eligible for Medicare, whether due to age or disability, you still have to pay the full price of COBRA coverage. Having Medicare coverage and attempting to use reduced-cost COBRA can have serious consequences. Read more about Medicare and ARRA.
In general, all healthcare coverage is voluntary. That means that you have the choice whether or not to participate. So the decision to keep COBRA coverage until it expires, or use Medicare or other coverage instead is entirely up to you. But, coverage from Medicare or an employer may prove to be far more cost effective. Additionally, there is a penalty for individuals who use reduced-cost COBRA but are eligible for Medicare.
Allsup provides additional details online:
Allsup, Belleville, Ill., is a leading nationwide provider of financial and healthcare related services to people with disabilities. Celebrating its 25th anniversary in 2009, Allsup has helped more than 110,000 people receive their entitled Social Security Disability Insurance and Medicare benefits. Allsup employs more than 550 professionals who deliver services directly to consumers and their families, or through their employers and long-term disability insurance carriers. For more information, visit http://www.Allsup.com.
The information provided is not intended as a substitute for legal or other professional services. Legal or other expert assistance should be sought before making any decision that may affect your situation.
(800) 854-1418, ext. 5065
Dan Allsup, ext. 5760
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