July 7, 2011


Our guest asks:

Last year I started getting COBRA from a former employer who actually was not legally liable to give it to me.

I had already quit working for him and started working full time for another employer who laid me off because of a serious medical condition that was found while I worked for the new employer. The new employer did not provide me insurance even though he owed me insurance.

I sued him for laying off due to medical reason and won money from a settlement. And I continued paying for the previous employer medical coverage. The 18 months of COBRA coverage will end in a couple more months. Even though I am classified as unable to work, for some reason the government will not give me medical coverage because I am 62 and for inability they don’t give medical until I am 65, even if I am classified as fully retired. What can I do to get medical insurance between now and when I am 65 after my 18 months of COBRA ends in a few months?

OnlineAdviser responds:

We should first clarify two preliminary issues that you raised:

1. If you enrolled in COBRA with the knowledge that you were not ineligible, the insurer has the right to rescind coverage upon discovery of the issue. An employer does not have the right to modify the group insurance contract to offer coverage to a person who does not meet eligibility requirements, usually defined as active service of 30 or more hours per week.

2. The doctrine of 'employment at will' generally presumes that an employer may terminate employment for any reason not specifically prohibited by law. Generally dismissal for poor health or medical problems would be an example of a legally permissible reason for termination of employment. In contrast, firing due to age would be an example of a legally prohibited reason. We suspect that there are additional details in your case not directly relevant to the insurance question raised.

From your brief description it seems that you would be eligible for extended COBRA coverage due to a qualifying event. See http://www.dpa.ca.gov/benefits/cobra/qualifying-events.htm for more information. Note that social security's determination of ineligibility for medical benefits does not necessarily control the eligibility for a COBRA extension; you will need to get legal clarification on that issue based on the facts of your case.

Also, you should contact the insurer to ask about an 'individual conversion option'. Most health plans do offer this option although it is not widely publicized. I suggest that you make a formal request by mail now asking for an individual policy conversion rather than rely on a verbal response of an employee who may not be fully aware of this option. An individual conversion would also likely eliminate your risk raised in discussion point #1 above about possible rescission.

After these possibilities are exhausted, the next most likely (but not attractive) options might be the state pre-existing condition plan after a six month spend-down of assets without insurance. Alternately, a limited benefit plan may be available that might cover some but not all of your medical expenses.

Other resources:

www.COBRAplan.com

COBRA after medical termination of employment

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