Fight a-brewing over COBRA

Whatever it is, GDU makes it hard. And they use every electronic convenience that’s ever been invented to make it harder. Yesterday afternoon I discovered they’ve got a way to do people who are forced to take early retirement out of the reduced, marginally affordable rate for COBRA.

The American Recovery and Reinvestment Act of 2009 mandates that employees who are canned involuntarily are to pay only 35 percent of the usual exorbitant COBRA premium; the remaining 65 percent is to be reimbursed to the employer by the government. Assuming the State of Arizona keeps its current healthcare plans at the next open enrollment (decidedly not a foregone conclusion!), my COBRA cost would drop from $488 a month to $171. This will make it affordable for me to continue my medical insurance coverage between December, when I’m to be thrown out on the street, and May, when I will be eligible for Medicare.

I wanted to confirm this. GDU’s HR page says nothing about the ARRA reduction. So I sent a message through HR’s faceless e-mail form asking what exactly the deal is with the reduced COBRA rates. They will not answer the telephone over there, so the only ways you can get an answer to a question are either to go in person to their office, which is far off-campus and requires you to move your car and park in a lot decaled off-limits to visitors, or to go through the e-mail form and wait about a month for an answer.

This is the same bunch, bear in mind, that told me if you are laid off, you’re not entitled to your RASL benefits, which for me amount to a severance package worth about $20,000. RASL is a program that pays retirees as much as 50 percent of their hourly wage for each hour of accumulated sick leave; the state GAO’s page is not accessible because it’s been posted in a program that Safari and Firefox can’t read. On the West campus, HR employees gave La Maya the same story. Turns out they were dispensing wrong information.

So finally, late last week ago along comes an e-mail from an HR underling, probably a student worker, referring me to the same HR page that contains not one word about the ARRA reduction for COBRA. So I responded to her form message and pointed out that there’s a new law providing a cut in COBRA costs but HR’s page says nothing about it. She didn’t have a clue.

Yesterday I get a snippy e-mail from someone else over there referring me to a State of Arizona web page. Notice that neither of these women so far has answered my basic question: what will the reduced premium on the EPO plan be? This is not hard, is it? Just confirm that the regular COBRA premium is $488/month and that ARRA applies. They don’t want to talk to you. They just want to send you through punch-a-button phone mazes or to the Internet.

So, while I’m navigating their incredibly complicated and only marginally comprehensible site, what do I come upon but this statement, hidden in a link under the FAQs, which appear at the bottom of the page:

Are retirees eligible for premium assistance?
No, retirees are not eligible for premium assistance. Former employees eligible for retirement should consider how delaying pension benefits (for the purpose of being eligible for premium assistance) would impact their participation in the Retiree Accumulated Sick Leave (RASL) Program.

Say WHAT?!?

To get the reduced COBRA, you have to forego your retirement benefits and evidently lose your chance to collect your RASL benefit!!!!!  (Understand: You have 14 days after your last day to claim your RASL. Fail to collect promptly, and you lose it.)

Of course, I came across this about 9:00 at night. So this morning as soon as state offices open, I’m going to have to get on the phone to the few people I’ve found downtown who will actually speak to you. There’s a woman at the General Accounting Office who hates GDU’s HR circus and who will give you a straight answer. I also have to drive my car out to Tempe, instead of taking the train, because I’ll have to go in person to HR and make an appointment to join one of the pending retirees’ classes so I can ask about this there.

It gets better! 

Continuing to explore the Internet, I went to the Department of Labor, where I found a link to an Internal Revenue Service document on the subject of COBRA premium assistance. Way, way down in this memo, on page 19, this interesting statement occurs:

The effect on eligibility for the premium reduction of an offer of retiree coverage that is not COBRA continuation coverage at the same time that COBRA continuation coverage is offered depends on whether the retiree coverage is offered under the same group health plan as the COBRA continuation coverage or under a different group health plan. If offered under the same group health plan, the offer of the retiree coverage has no effect on an individual’s eligibility for the ARRA premium reduction.

The State’s retiree health plans are exactly the same as the ones offered to employees. The cost to retirees is the same as the full cost of COBRA: exorbitant and unaffordable. 

So, apparently, the State of Arizona’s policy on the COBRA relief directly contradicts federal rules. No doubt they’ll have some way to to claim the four identical healthcare insurance plans are magically “different” because they’re offered to retirees.

Unless this is straightened out between now and December, I’m going to have to do battle over that. The feds have an appeal process for those who are denied:

ARRA provides an individual who requests and is denied treatment as an assistance eligible individual with the right to a review of the denial, within 15 business days after the receipt of the application for review, by the Department of Labor (or the Department of Health and Human Services in connection with COBRA continuation coverage that is provided other than pursuant to ERISA).

No clue in this document, of course, as to where you go to lodge such a protest. So it promises to devolve into a great hassle.

If I have to pay the full COBRA gouge, it will cost me $2,500 to stay insured for the five months from the time I leave state service to the time I’m eligible for Medicare. That’s almost a full month’s salary! I’m setting that much aside from emergency savings, but jayzus! How do they expect people to eat?

And notice how complicated it was to find information that hints the State’s policy is wrong! The whole idea is to make it as difficult as possible to get the facts by blitzing you with tons of boilerplate that looks like it’s telling you something but that does not answer specific questions and then by refusing to respond to real-world questions either over the phone or by e-mail. Most people would have given up before they came across that IRS document, and precious few would have plowed through 19 pages of bureaucratese to find the relevant statement about retiree health plans. I didn’t do so, myself: I found it by using the Mac’s Searchlight function to track down the character chain “retire.” Even that took some doing, since “retire” appears 14 times in the document. I’d venture that not  many workers nearing retirement age would know to do that—especially not those in low-paying jobs that don’t require computer skills, the very workers who most need the COBRA reduction.

Why do you suppose GDU and the State of Arizona want to avoid letting employees know about the ARRA reduction of COBRA premiums? In theory, it’s no skin off their teeth: the federal government reimburses employers for the 65 percent reduction. It may be just flaming incompetence. Or it could reflect the leadership’s doctrinaire right-wing dementia, which holds that anything having to do with government in any way is bad news and that workers should be made to work for the lowest wages and the fewest benefits possible. 

Whatever the reason, it looks like I’ll be spending the first few weeks or months of my enforced retirement in a battle royal with GDU and the State of Arizona. Wheeee! I can hardly wait.

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