cobra

[Anes2010]

Hopefully someone out there can answer this for me. I recently completed my training, and my new health benefits do not start for 90 days (crappy I know). In order to protect myself, and prevent the "lapse of coverage" that might preclude future pre-existing conditions, I have elected to get COBRA. Congress passed the ARRA to reduce COBRA premiums for eligible applicants. Are we eligible? Has anyone asked their benefits office? It would shave several hundred dollars/month off my preimium. Does the completion of residency/fellowship constitute an "involuntary termination of employment"? What is everyone else doing?

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[random1]

Hmm, this is what IRS Notice 2009-27 says (p. 5):

"An involuntary termination may include the employer's failure to renew a contract at the time the contract expires, if the employee was willing and able to execute a new contract providing terms and conditions similar to those in the expiring contract and to continue providing the services."

I guess that means if you were willing to renew your residency contract (though that doesn't make any sense), then you are eligible. My hunch is that most residents would not be willing, especially if they have another job lined up already. To be on the safe side, I'd go with paying the extra money. It isn't much in the long run, and it's better than being sued by the government. Besides, if you think about it, the premium reduction is really for people who get laid off and can't find new jobs.

 

[Samoa]

You don't have to be terminated involuntarily to sign up for COBRA. It's available to anyone who has had employer-sponsored health insurance, whether they have found a new job or not.

For example, I was on COBRA from my residency program this entire past year while I was working for two other employers, both of whom offered health insurance of their own. My insurance from residency was significantly better and cheaper in the long run than either of my employers' plans.

I had not been terminated involuntarily, and whether I was willing to sign a contract for the subsequent year was not even a consideration in determining eligibility.

 

[random1]

The OP was referring to the COBRA premium reduction, which was passed with the stimulus bill earlier this year. COBRA itself does not require involuntary termination, but the premium reduction does.

 

[Samoa]

If you've completed residency, that makes you not "able" to execute a new contract similar to the one that's expiring.

 

[random1]

That's true, so maybe it's an additional reason why the premium reduction doesn't apply to residents? But I think the real test is whether you could and would renew your contract were it offered to you. If yes, then you get the reduction. If no, then you don't get it. (Though of course, you can get COBRA either way.)

Think of, say, a contractor who finishes building a house, and therefore fulfills the terms of his contract. If he can't find work afterward, but he could and would build another house if he were offered the opportunity, then he is eligible. If he would turn another house down, say, because he switches jobs or won the lottery, he is not eligible.