SOURCE: eHealth, Inc.

eHealth, Inc.

February 19, 2009 09:00 ET

Answers About the COBRA Subsidy and Affordable Health Insurance Alternatives From eHealthInsurance

COBRA Subsidy in Federal Stimulus Package Increases Affordable Healthcare Options for the Unemployed and Uninsured

MOUNTAIN VIEW, CA--(Marketwire - February 19, 2009) - eHealthInsurance, the leading online source of medical insurance for individuals, families and small businesses, today provided answers to questions about the federal subsidy for COBRA insurance premiums included in the economic stimulus bill.

The new American Recovery and Reinvestment Act of 2009, which the president signed into law on February 17, 2009, includes a 65 percent subsidy on the cost of COBRA premiums for up to 9 months. The answers provided here can help people make informed choices regarding their health insurance coverage if they lose their jobs.


Question: Who is eligible for the proposed COBRA subsidy?

Answer: You're eligible for the subsidy if:

--  Your individual income is less than $125,000 per year or your family
    income is less than $250,000 per year; and
--  You were laid off between September 1, 2008 and December 31, 2009; and
--  At the time of the layoff you were participating in group coverage
    sponsored by your employer. (You may currently be insured through COBRA,
    through a private plan, or uninsured.); and
--  Your employer must continue to exist (if the company was liquidated in
    a Chapter 7 bankruptcy then group coverage will no longer be available).
--  If you were laid off on or after September 1, 2008 and did not choose
    COBRA within the required 62-day window, you're allowed to become eligible
    for COBRA again, as long as the former employer continues to exist and
    offer group coverage.
--  The subsidy is not retroactive and will only apply from the date of
    the law's passage going forward. If you've opted for COBRA and begin paying
    premiums before the effective date of the Act, you won't get a credit or
    refund for the COBRA premiums paid prior to that effective date.
    

Question: Who is not eligible for the proposed COBRA subsidy?

Answer: You're not eligible for the subsidy if:

--  You were laid off before September 1, 2008 or after December 31, 2009.
--  You weren't participating in group coverage through your employer
    before your layoff.
--  Your company didn't offer health insurance benefits or has gone out of
    business.
--  Companies with fewer than 20 employees are not required by federal law
    to offer COBRA coverage, but check with your benefits administrator at your
    former employer as some states require employers with fewer than 20
    employees to offer continuation coverage.
--  If you reside in one of these states, you may be eligible for this
    subsidy if your state's continuation of coverage requirements are
    comparable to COBRA's continuation of coverage requirements. Please check
    with your benefits administrator to confirm whether you are eligible for
    this subsidy.
    

Question: How do I know if I qualify for COBRA?

Answer: Qualifications for COBRA insurance include:

--  Voluntary or involuntary termination of employment (for reasons other
    than gross misconduct).
--  Reduction in the number of hours of employment.
    

Question: Who doesn't qualify for COBRA?

Answer: You're not eligible for COBRA if:

--  Your employer doesn't offer you health insurance coverage.
--  Your company files for bankruptcy or shuts down completely and ceases
    to offer a group plan.
--  Your company has fewer than 20 employees.
--  Note that companies with fewer than 20 employees are not required by
    federal law to offer COBRA coverage, but some states require employers with
    fewer than 20 employees to offer continuation coverage. Check with your
    benefits administrator to confirm whether you're eligible for this subsidy.
    

Question: What are the advantages of continuing coverage through COBRA with this new subsidy?

Answer: There are several;

--  You'll enjoy a 65% cost savings for nine months on your COBRA premium.
    Your former employer covers the difference between the subsidy and the full
    premium, and is compensated by the Treasury through a tax credit.
--  You'll continue to be enrolled in the same employer-provided plan
    you're accustomed to, and can continue to use the same physicians and
    benefits.
--  If you have pre-existing conditions that may preclude you from
    qualifying for other types of coverage, you can stay on COBRA at a reduced
    rate for nine months.
    

Question: Are there any potential disadvantages to continuing my coverage through a government-subsidized COBRA plan?

Answer: Potentially, yes;

--  Even with the 65% subsidy, COBRA coverage may still be prohibitively
    expensive, especially if you're surviving on monthly unemployment benefits.
--  The current subsidy lasts for 9 months and COBRA coverage is limited
    to 18 months. If you haven't found a job by the time your COBRA expires,
    and you've developed a chronic health problem or had a moderate to serious
    medical incident in the interim, it may be harder to qualify for an
    individual health insurance policy.
    

Question: If I'm not eligible for COBRA, what other options for health insurance do I have?

Answers:

--  Check your spouse's plan: If you're married and your spouse is
    employed, check to see if you can get on your spouse's employer's plan.
    Find out if your spouse's share of the premium would increase if you join
    the plan. Some employer-sponsored plans allow for non-married employees to
    add a long-term partner to the plan.
--  Private health insurance: If you're in relatively good health and have
    little or no pre-existing health conditions, you may find less expensive
    options to COBRA -- even with a 65% subsidy -- in the private health
    insurance market. A 2008 survey of 227,000 private health insurance policy
    holders showed that half of all individual policy holders paid less than
    $130 per month(1) and over half of family policy holders paid less than
    $300 per month(1).
--  Short-term coverage: Some short-term plans may be easier to qualify
    for and cost less. Short-term health insurance policies typically last for
    six months, but they have limitations. They often don't count as
    continuation of creditable coverage and often don't cover pre-existing
    medical conditions. But, they do provide a measure of financial protection in
    the event of a medical emergency.
--  Explore public programs: If none of these options are viable for you,
    you're not without hope. The Foundation for Health Coverage Education
    (FHCE) has an excellent web site and their U.S. Uninsured Help Line that
    can connect you with publicly-funded programs in your state. Over 90
    percent of the people that contact the FHCE find coverage. Their web site
    is www.coverageforall.org and their toll-free number is 800-234-1317.
    

Question: Who do I call for more information?

Answer: You have several options available;

--  If you're unemployed, talk to the benefits administrator or HR
    representative at your former employer to understand your eligibility for
    these newly proposed benefits. The details of the subsidy may change, so
    stay in touch with benefits administrators for the latest updates.
--  If you are unemployed, need health insurance immediately and cannot
    afford current COBRA premiums or are ineligible for COBRA, research your
    options at www.ehealthinsurance.com or talk to an eHealthInsurance licensed
    agent, free of charge, at 1-800-977-8860.
--  If you're unemployed and can't afford or meet the qualifications for
    COBRA or individual health insurance, visit www.coverageforall.org. The
    Coverageforall.org website offers visitors a database, with more than 176
    government-sponsored programs in 50 states and the District of Columbia to
    help people in need find public health coverage. Sponsored by the
    Foundation of Health Coverage Education, CoverageForAll also offers a free
    24/7, multilingual U.S. Uninsured Help Line at 800-234-1317.
    

NOTE: This summary is intended to provide general information. It does not offer legal advice or attempt to provide a comprehensive, detailed look at all the issues surrounding any one topic.

About eHealth, Inc.:

eHealth, Inc. (NASDAQ: EHTH) is the parent company of eHealthInsurance, the nation's leading online source of health insurance for individuals, families and small businesses. Through the company's website, http://www.ehealthinsurance.com, consumers can get quotes from leading health insurance carriers, compare plans side by side, and apply for and purchase health insurance. eHealthInsurance offers thousands of health plans underwritten by more than 180 of the nation's health insurance companies. eHealthInsurance is licensed to sell health insurance in all 50 states and the District of Columbia. eHealthInsurance and eHealth are registered trademarks of eHealthInsurance Services, Inc.

Footnotes:

(1) SOURCE: eHealth, Inc.'s 2008 report: Cost and Benefits Of Individual and Family Health Insurance Plans: http://www.ehealthinsurance.com/content/expertcenterNew/eHealthCBreport2008FINAL.pdf

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