But then his wife Bethann Get fired from an out-of-state tech company. At that point, Alan Cregg was supposed to be enrolled in Medicare Part B, but he didn’t, which would have cost him nearly $20,000 in knee surgery.
To avoid his fate, you need to know the following:
Q: How has Bethann’s unemployment affected the couple?
A. A law called COBRA goes into effect. It requires most employers to continue to provide group coverage for laid-off employees for at least 18 months. Under COBRA, departing employees receive the exact same coverage as current employees from the same insurance company. Creggs’ insurance company is Cigna, one of the largest insurance companies in the United States. (There are other “events” that trigger COBRA; for example, allowing dependents to continue coverage after the insured dies.)
Q: Is there anything different about you on COBRA?
A. Yes, your monthly premiums may skyrocket. While she was an active employee, Bethann’s employer paid 100% of the premium. After Bethann was fired, her former employer continued to pay full premiums based on a negotiated severance package, but only for a few months. That means Creggs will soon have to cover the full premium, which is about $2,000 a month.
Q: When Alan and Bethann lost their jobs, why didn’t she stay on Medicare Part B instead of COBRA?
A. Bethann was too young in her 50s to qualify for Medicare. Another option is to purchase the policy as an individual (with Alan as a dependent). However, buying your own insurance is almost always much more expensive than group insurance offered through an employer.
Q: But Alan is old enough to be in Medicare Part B – why doesn’t he continue?
A. In retrospect, he very much wishes he had. Basically, he was lulled into a false sense of security. After he turned 65, Cigna continued to pay his claim without interruption. What Creggs didn’t realize was that as long as Bethann was a current employee, Cigna would continue to pay his claim.
Q: What did Creggs say to COBRA after Bethann was fired?
A. This is the crux of the problem. Allen felt that someone should have explicitly told him not to continue with COBRA, but to enroll in Medicare Part B instead. Instead, he said he was led to believe there was no change in his status under COBRA.
Allen sent me a dozen documents, most of which were letters from a company called Paylocity hired by Cigna to manage its COBRA program. Shortly after Bethann lost her job, Paylocity sent the Creggs a seven-page, single-spaced letter informing them of their COBRA rights. It’s very dense, full of legal and bureaucratic language. I had to read it over and over again to begin to understand it.
It begins by saying that Bethann’s insurance will end on the date she terminates her contract. But then it said COBRA “authorized” the couple to “opt in to continue coverage” as “active members” of the Cigna plan.
“COBRA coverage is the same coverage that the program provides to other participants or beneficiaries who are not enrolled in COBRA,” the letter said.
The furloughed employees and their COBRA dependents “will have the same rights as COBRA,” the letter said. [Cigna] other participants in the program”.
It says nothing about enrolling in Medicare Part B for people over 65.
Q: How did Creggs understand the letter?
A: They believed that once they opted for COBRA, their Cigna coverage would continue for the couple without interruption or modification, even though their cost was higher, their coverage had actually changed.
Q: How?
A: Medicare distinguishes between those 65 and older who have employer-sponsored insurance and are still working, and those who have employer-sponsored insurance but are not working, such as those covered by COBRA.
Q: What’s the difference?
A. I’ll quote AARP: “You can delay enrolling in Medicare [Part B] Only if you or your spouse are still working and you have health insurance current employer. ” AARP puts “current” in italics for emphasis.
AARP continues: “While COBRA provides the same coverage as when you were working, it behaves differently under Medicare rules because you or your spouse are no longer actively working in that job.”
Q: What are the results of Creggs?
A. Creggs is not aware of the “currently employed” requirement. They continued with their COBRA program, and a few months later, Allen scheduled outpatient arthroscopic knee surgery. He received a letter from Cigna approving it “after reviewing your medical information and health plan.”
Allen underwent surgery, but Cigna later refused to pay because he was supposed to be on Medicare Part B. Creggs ended up paying nearly $20,000 out of his own pocket.
Anyone who needs help navigating the Medicare system can get it for free Shine Project through their local senior center.
Is there a problem? Send your consumer questions to sean.murphy@globe.com.follow him on twitter @spmurphyboston.
