A COBRA That’s On Your Side

A woman who left her job gave birth a few weeks later to premature twins. She kept her health insurance, something you can do under federal law if you continue paying the premiums. The tiny babies had several health problems, requiring a 95-day hospital stay and a whopping tab of $418,000 for their medical care. If that wasn’t enough strain for the new mother, her insurer then balked at paying most of the bill. The insurer claimed it was responsible for paying for the delivery but was not obligated to pay for the children’s medical care during the long hospital stay. Because the babies weren’t on the woman’s insurance policy while she was employed, the insurer reasoned, they were ineligible for coverage for the extended care.

The distraught mother called the Labor Department’s Pension and Welfare Benefits Administration, which intervened on her behalf. A Labor Department investigator reminded the insurance company that because the woman was paying the medical premiums, she was entitled to the same coverage as workers. Children are fully covered, even if they are born after the worker leaves a job. The insurance company agreed to pay the $418,000.

The happy ending for this mother’s story was another illustration that “common sense is built into the law,” said Leslie Kramerich, acting assistant secretary of labor, who runs the Pension and Welfare Benefits Administration. “And we always try to apply common sense with people to get problems worked out.”

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The story should be a reminder to everyone with health insurance at work to have at least a nodding knowledge of the existence of the Consolidated Omnibus Budget Reconciliation Act, known as COBRA, passed by Congress in 1986. But the statute remains obscure because workers don’t think about it until they are out of work and must make some tough decisions.

“It’s not something people sit down and study till they need it. When they need help, they need it fast,” Kramerich said, noting that COBRA inquiries comprised more than 50,000 of the 88,000 health care questions handled by her agency last year.

COBRA applies to anyone with a group health insurance policy in a firm with 20 or more workers. The federal government updated COBRA rules this year in an effort to clarify the complex law.

Here is the latest word on COBRA protection: A worker who leaves a job for any reason other than being fired for gross misconduct can retain her health insurance. She agrees to pay the full premium--both the worker’s and the company’s share--plus a 2% administrative fee. Whether the worker quits, is laid off or retires, her right to keep health insurance is fully protected for 18 months. If the worker becomes disabled, coverage will be extended for another 11 months beyond the first 18.

When a worker with health coverage for the family dies, the widowed spouse and children can continue the insurance for 36 months. The same 36-month extension also applies in the event of a divorce and also to dependent children who reach an age at which coverage would otherwise cease. The age varies, usually from 18 to 21, depending on the health plan.

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All of these changes in a worker’s situation are called “qualifying events,” and the firm has to notify its insurance company, which is required to notify the worker or the affected family of the right to buy COBRA coverage.

The former worker has 60 days to opt for coverage, and then 45 days after that to pay the first month’s premium. Although the protection can last for 18 months or longer, a worker can pay premiums monthly and may cancel at any time, if he gets another job with health insurance or finds a cheaper policy.

Workers and their families are protected even if something goes wrong with the paperwork and notifications.

“You do not lose your right to buy COBRA coverage if you never got the notice in the first place,” said Kramerich. She cited the case of a woman who left her job and later needed a life-saving liver transplant. She was never told by her employer of her option to continue coverage under COBRA. The Labor Department intervened on her behalf, and she got retroactive coverage with the insurer required to pay for the transplant.

The new rules adopted this year emphasize that a company must notify workers of their rights under COBRA at the time they first become covered under the firm’s health insurance plan. The Pension and Welfare Benefits Administration has boosted its regional office staff to 80 people answering inquiries about COBRA and other federal insurance-related laws. Check the local phone book under U.S. Labor Department, Pension and Welfare Benefits Administration. Free publications are available at (800) 998-7542. The Web site is at https://www.dol.gov/dol/pwba.

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California has its own version of the law, called Cal-COBRA (officially known as the California Continuation Benefits Replacement Act), which extends benefits to small firms with two to 19 employees.

The same basic rules apply: 18 months of continued coverage if a worker loses insurance and 36 months for the other cases covered by the federal law. The worker pays the full cost, plus an administrative fee of 10%, compared with the fee of 2% under federal law. California also has a special benefit protection for older workers. An employee who has worked for the same company for at least five years and is 60 or older when she becomes eligible for Cal-COBRA can continue coverage until age 65, when Medicare coverage would begin. For questions or complaints about Cal-Cobra, members of HMOs can call the California Department of Corporations at (800) 400-0815. Members of other health plans can call the California Department of Insurance at (800) 927-4357.

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Last month’s column about a new discounted drug plan for Medicare beneficiaries generated many e-mail messages, letters and phone calls. And some confusion too.

A new California law says anyone with a Medicare card can get prescriptions filled for the same price the state of California pays when it buys drugs under the Medi-Cal program for the poor.

Several readers were disappointed to find out that the Medi-Cal price for their prescriptions was higher than the price their drugstore was already charging or the price available from a mail-order pharmacy.

The best advice is to do some comparison shopping. There is a tremendous range of charges depending on the drug, the companies manufacturing it and the store selling it.

One drugstore chain might charge more than the state rate on Medi-Cal for some drugs and less for others. Before you have the prescription filled, ask the pharmacist what the lowest price is--the store rate or the Medi-Cal rate.

Other readers were upset because pharmacists said they hadn’t heard of the program and wouldn’t quote prices. The law requires pharmacists to provide prices on request, said Patty Harris, executive officer of the California Board of Pharmacy. The pharmacy can charge a 15-cent processing fee for checking the Medi-Cal price through its computer.

Only pharmacies that participate in the Medi-Cal program are required to offer the Medi-Cal discounted prices, but most California pharmacies are enrolled in the program.

The state pharmacy board has a brochure available on the prescription drug program and also handles complaints from consumers. Call (916) 445-5014, Ext.4010.

Bob Rosenblatt welcomes your questions, suggestions and tips about the changing world of health care. Write to Bob Rosenblatt, Health, Los Angeles Times, Times-Mirror Square, Los Angeles, CA 90053. Or e-mail him at bob.rosenblatt@latimes.com