Have a general question about employment law? Want to share a story? I welcome all comments and questions. I can't give legal advice here about specific situations but will be glad to discuss general issues and try to point you in the right direction. If you need legal advice, contact an employment lawyer in your state. Remember, anything you post here will be seen publicly, and I will comment publicly on it. It will not be confidential. Govern yourself accordingly. If you want to communicate with me confidentially as Donna Ballman, Florida lawyer rather than as Donna Ballman, blogger, my firm's website is here.

Monday, April 14, 2014

The Little-Known Obamacare COBRA Catch-22

When I'm negotiating severance packages for employees, many times employers will offer to pay a month or more of COBRA payments. COBRA is the law that says employers have to let employees who lose their jobs stay on the company's insurance for up to 18 months as long as the employee pays 100% of the premium. Those premiums can be huge: $1,000 or more sometimes. Getting the employer to pick up some of the premiums can be a huge benefit.

Until now, that is.

Find out about the problem I found that occurs if you lose your job after open enrollment by reading my article at AOL Jobs.You have an important choice to make on health insurance. Find out before you enroll in COBRA and before you sign any severance agreement. You're stuck with the choice you make until the next open enrollment in November.

Then, if you think this is a serious problem, tell President Obama by signing the petition I created, which only needs 24 more signatures to go up on the public website (where it will have to gather 100,000 signatures by May 4, so time's a-wasting). Do it today.

1 comment:

  1. While I am sympathetic to employees who lose employer coverage, it is not a good idea under any circumstances for employers to contribute to a former employees health insurance costs unless that contribution is made as part of a formal well-documented employee benefit plan. It should never be done on a casual or arbitrary basis. Doing so would trigger a range of tax compliance issues, possible group insurance contract violation and raise the employer's risk under employment law; all of these problems even aside the Affordable Care Act. That guidance (presumably the guidance that would be given by most employee benefit professionals) has not changed with Obamacare. Of course, an employer can offer severance pay that can be used by the employee to pay for expensive COBRA coverage. That is a safe and non-controversial way to accomplish the same goal. - Tony Novak, CPA, author of COBRAplan.com web site


I appreciate your comments and general questions but this isn't the place to ask confidential legal questions. If you need an employee-side employment lawyer, try http://exchange.nela.org/findalawyer to locate one in your state.