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After that his wife Bitan She was fired from her job at an out-of-state tech company. At the time, Allen Craig was supposed to sign up for Medicare Part B, but he didn’t, and the knee surgery cost him nearly $20,000.
Here’s what you need to know to avoid his fate:
Q. How did Bethany’s job loss affect the couple?
A. A law known as COBRA was introduced. It requires most employers to continue providing group insurance to terminated employees for at least 18 months. Under COBRA, terminated employees receive coverage from the same insurer as active employees. Kriegs’ insurer was Cigna, one of the largest in the country. (There are other “events” that trigger COBRA, such as dependents being allowed to continue coverage after the covered person’s death.)
Q. Are there any differences when you go on COBRA?
d. Yes, the monthly premium may increase. While she was an active employee, Bithan’s employer paid 100 percent of her premiums. After Bitan was terminated, her former employer continued to pay her full salary, but only for a few months, according to a negotiated severance package. This meant that Kriegs soon had to pick up the entire premium, about $2,000 a month.
Q. Why didn’t Alan and Beth go with Medicare Part B instead of COBRA when she lost her job?
A. Bitan, who is in her late 50s, is too young to qualify for Medicare. The alternative was to purchase insurance as an individual (Alan as a dependent). But buying insurance on your own is almost always more expensive than group insurance provided by an employer.
Q. But Alan was good enough for Medicare Part B – why didn’t he go on it?
A. Looking back, he really wishes he had. Basically, he was lulled into a false sense of security. Cigna continued to pay his claims continuously after he turned 65. What the Kriegs failed to realize was that Cigna would only continue to pay the claims as long as Bitan was a current employee.
Q. What were the Craigs told about COBRA when Bethann was terminated?
A. This is the root of the problem. Allen thinks he should clearly tell someone not to go on COBRA but to sign up for Medicare Part B. Instead, he said he was led to believe there would be no change in his status under COBRA.
Alan sent me a dozen documents, most of them from PeloCity, a company hired by Cigna to manage its COBRA plans. Paylocity sent the Craigs a seven-page, single-spaced letter informing them of their COBRA rights because Beth was out of a job. It is very dense, packed with legalistic and bureaucratic language. I had to read it over and over again to begin to understand.
Home insurance will begin to expire from the date of termination. But COBRA says it gives couples the “right” to elect “active members” of the Cigna plan to “continue coverage.”
“COBRA coverage is the same coverage that the plan provides to other non-COBRA participants or beneficiaries,” the letter states.
The letter states that terminated employees and their dependents on COBRA “will have the same rights under this [Cigna] Make a plan like other participants in the plan.
It says nothing about those over 65 needing to sign up for Medicare Part B.
Q. How was the letter understood by Kriegs?
A. After electing COBRA, they thought their Cigna coverage would continue for the couple without any interruptions or upgrades, despite the high cost to them.
Question: How?
A. Medicare differentiates 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 is the difference?
I quote A. ARP: “You can delay signing up for Medicare [Part B] If you or your spouse are still working and have health insurance from a Seasonal employer.” AARP put “current” in italics for emphasis.
AARP continues: “Even though COBRA is the same coverage you had when you were working, it works differently under Medicare rules because you or your spouse are no longer actively working at that job.”
Q. How did it play out for Craigs?
A. Kriegs was oblivious to the “currently employed” requirement. They continued with their COBRA plan, and a few months later, Alan scheduled outpatient arthritis surgery on his knee. He got a letter from Cigna approving it “after reviewing your medical information and health plan.”
Alan had the surgery, but Cigna later refused to pay because it should have been under Medicare Part B. Craigs was eventually paid $20,000 out of pocket.
Anyone who needs help navigating the Medicare system can get it free of charge. Lighting program Through their local senior center.
Do you have a problem? Send your customer issue to sean.murphy@globe.com. Follow him on Twitter. @spmurphyboston.
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