Information needed pertaining to COBRA insurance and terminated employ

[Guest Louise Miley]

I was terminated due to medical restrictions from my doctor. I was offer COBRA Insurance (which was to be paid by the end of that month to cover the following month), and I decided to pay the monthly premiums. What I don't understand is why I have to make my checks out to the company and not the Insurance company. My ex-employer states that I must send the money to them. How can I find out if the amount I send them is the amount I am supposed to be paying and if I can send it directly to the Insurance company. This will be my third month of payment, and last week I received notice that the amount has gone up $20.00/mo. to start this month. I called the BCN Insurance Co. and they had no information for me. I was told to ask the company. I would appreciate any information on how COBRA works. Thank You

[KIP KRAUS]

Louise:

It sounds like your former employer has elected to administer COBRA internally. This is admissible under the COBRA regulations and common. The premium that they are allowed to charge you is equal to 102% of the actual monthly premium charged by the insurer. Therefore if you, for instance have single coverage and the insurer charges $260.00 per month the employer can charge you $265.20.

Probably the reason the employer is requiring you to write the check to them is because they simply leave you no their standard premium statement and pay active and COBRA premiums on the same statement, which can be a common practice when an employer is administering its COBRA.

If you think something is wrong contact the local Department of Labor and/or state or commonwealth Insurance Department.

It may be helpful if you could tell us what coverage you have (single, Family or two person) and the premiums you are paying then we at least may be able to let you know if it looks reasonable. The city and state where you live would also help in making this determination.

[Guest Louise Miley]

My insurance is for single coverage, and the premium when I first started receiving COBRA in October was $193.33 mo. I paid that amount for November and December, and now for January's payment, it went up to $213.33 mo. They just let me know this last week (Dec.14, by letter) and the payment is due the 25th of each month. The insurance I have is BCN and I have a $20.00 co-pay on prescriptons. I live in Dearborn, Michigan and worked in Taylor, Michigan. Thank you for your help, and would appreciate any further information.

[KIP KRAUS]

I don't know what BCN is. However,the premiums you are paying seem to be reasonable to me. In additon, a 10% increase seems reasonable. Your employer is more than likely on a calendar-year schedule with its insure for a 12-month rate increase effective January 1. They appear to be passing the renewal increase on to you, which they can do.

If you still feel uncomfortable with that, you could still contact the DOL or Insurance Department.

[Guest Louise Miley]

Thank you very much Mr. Kraus for the information. The insurance company I was referring to is Blue Care Network, a division of Blue Cross Blue Sheild. Thanks again.

[Guest Mary Ridgeway]

Where can I get a copy of the laws an employer must follow when terminating an employee?