Quote:
Originally Posted by am_vanquish
This is something we never accounted for in our EF planning, but a thread from last week got me thinking about it.
How exactly would I estimate the COBRA premiums? Is it just the amount of employer-paid medical benefits shown on my paycheck? Also, is the 65% stimulus discount applied just a flat rate, or is there some scale there?
Finally, should I consider the COBRA cost in my analysis/decision of which medical plan to participate in (switch enrollment ends in a week!)? Does the reduced premium during unemployment add value to the cheaper, high-deductible plans? Normally I wouldn't consider this, but the level of security in my job has dropped significantly since we've add significant layoffs each of the last 2 quarters & just announced a significant off-shoring effort.
Thanks.
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My paycheck did not have the information about my employers contribution to my health insurance. I'm sure the information was somewhere, but I never bothered to look for it.
COBRA just means you continue using your existing insurance plan, but pay the "group" rate (what you + your employer paid) instead of the "individual" rate. Their are other options, including short-term plans that are usually pretty inexpensive but have some important differences in what is covered.
There are some qualification criteria for the 65% COBRA rebate, but as an individual making $60k I still qualified when I lost my job. It's a straight 65% . . . not a sliding scale. Not sure how long it will be in place.
The most appealing thing about COBRA for me was that I could use the funds in my HSA account to pay the monthly premium. So instead of dipping into savings or unemployment income to pay the COBRA premium, I can use the $2400 I have accumulated in my HSA account through my insurance plan. You can ONLY use HSA funds for COBRA, not for the short-term policies mentioned above.
I wouldn't factor the COBRA costs into your decision making process during open-enrollment, but I'd certainly factor health coverage into your EF planning.