Quick Facts About Medicare and the American Recovery and
Reinvestment Act of 2009 (ARRA)

No. However, the ARRA, enacted Feb. 17, 2009, includes provisions that can help people pay for their health insurance if they lost their jobs involuntarily between Sept. 1, 2008, and Dec. 31, 2009, and their employers offer COBRA coverage. These provisions include a 65 percent reduction in COBRA premiums for up to nine months for those who meet eligibility requirements and a special enrollment period for those individuals who at first chose not to use COBRA. You may now be able to re-join an employer plan.

 

If you’re eligible for Medicare now, whether you use COBRA coverage or not, you are not eligible for the cost reduction or special enrollment period. If you’re not eligible for Medicare, though, you may be eligible for reduced-cost COBRA under the ARRA.

 

Unfortunately, no. Because you already have access to affordable, complete coverage – whether or not you choose to use it – you cannot take advantage of the reduced-cost COBRA premiums under ARRA. If you are interested in lower-cost healthcare coverage and are now using COBRA, you should seriously consider taking advantage of Medicare benefits already available to you.

 

As long as none of your family members are eligible for Medicare, they can keep COBRA coverage and take advantage of the 65 percent discount. If other family members are eligible for Medicare, they can join a Medicare plan if they want to avoid spending too much on COBRA premiums.

 

If you become eligible for Medicare while getting the 65 percent reduction on your COBRA, you need to let your former employer know as soon as you’re eligible. If you don’t, you may have to pay a penalty of 110 percent of the premium subsidy for your former employer’s plan.

The decision to keep your former employer’s COBRA coverage is entirely up to you – both COBRA and Medicare are completely voluntary. So, if you want to, you can keep your former employer’s coverage under COBRA until it expires. But because Medicare is often far less expensive than the cost of self-funding COBRA coverage, you should seriously consider your Medicare options before making any final decision.

If you are applying for or collecting SSDI and were involuntarily terminated by your former employer (whether because you were laid off, one of your employer’s offices closed or for reasons not involving gross misconduct) between Sept. 1, 2008, and Dec. 31, 2009, and are not yet eligible for Medicare, you may be able to take advantage of the provisions under ARRA.

 

However, if you made the decision to leave your former employer, even if it was because your disability prevented you from continuing to work, you cannot take advantage of the reduced-cost COBRA offered under ARRA. To find out whether you’re eligible for reduced-cost COBRA, you should contact your former employer.

 

Whether you are eligible for the COBRA cost reduction or not, once you’re eligible for Medicare, you should weigh all your health care plan options carefully to ensure you have low-cost, complete coverage.

If you are eligible for the COBRA cost reduction, your former employer is required to let you know no later than April 18, 2009. If your former employer does not tell you that you are eligible and you think you may be, you should contact your former employer or benefits administrator to find out.

Learn more about how you can take advantage of the ARRA provisions here.

 

Being eligible for Medicare means you have a wide variety of coverage options available to you. If you’re eligible for Medicare now or will be soon and want to learn more about what plans are available to you, Allsup Medicare Advisor^SM can help.

 

The Allsup Medicare Advisor will help you identify which plans in your local area will work best for your individual needs. We’ll also provide guidance if you’re contemplating the transition from COBRA coverage to a Medicare plan. For more information, contact us at (888) 271-1173.