Helping Your USA Geek Friends (COBRA)

I'm getting ready to hit the ol Red Eye back to Toronto from San Francisco. It's been a pile of meetings with tons of people.  I've seen some really amazing technology and some opportunities I hope I can jump on.

One thing had stood out: The wreckage and shutting down of lots of start-ups and not so start-ups, ie those who have been around a bit but didn't make it. 

In speaking to a number of folks, many talked about being able to use COBRA Benefits the major problems being encountered. 

[Warning: Skip this Blog Post if you are not in the good old US of A]

COBRA stands for Consolidated Omnibus Budget Reconciliation Act. Yeah, that's the first problem but moving on....

I hope you never have to deal with this thing but: COBRA was an act of congress designed to do a bunch of things but with respect to Healthcare, this was designed to try and give people who got fired or laid off an opportunity to purchase the healthcare benefits, if any, they had at the time of job loss.  It was generally cheaper than going out on your own and offered some limited protection with continuation of benefits and coverage in general.  You essentially paid the full cost of the group plan (you part and what the company paid) and you kept the benefit.

There are a number of problems which are exacerbated in hard times.  First, the COBRA option only lasts for a limited period of time, 6 months or a year, I can't remember.  The second and most problematic issue is this:

If the company shuts down, goes bankrupt, etc, the benefits plan dies and the COBRA option for impacted workers is eliminated.  My guess is the original plan got watered down by a bunch of industry lobbyists.

Here's what you can do.  Immediately call, write, or email your congressman and urge them to introduce a bill that modifies/amends the 1986 COBRA health benefits provisions to do the following:

• Extend COBRA benefits for 24 months
• Require Group Health Plans to offer COBRA to all plan participants in the case of the company ceasing to exist. In effect, if the company goes bust, people can still buy health care at the rate the company was paying for it.
• Require Group Plans to retroactively offer COBRA to those impacted by layoffs during 2008. This is especially important given the carnage of Q3/Q4 of 2008.

Here's the thing. This costs the taxpayer ZERO.  No TARP, no Bailout, nothing. We just require the group health plan operators who want to operate in the US to cough up some extend opportunities for laid off people to pay for health coverage.

Write your congress type today; the geek you help may be, well, you.

Comments

[You Mon Tsang]

COBRA benefits last 18 months. If you live in California, state law (CAL-COBRA) allows you to tack on another 18 months. So in CA, you can go for 3 years.