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Administration Eases Rules to Give Laid-Off Workers More Time to Sign Up for COBRA

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3 years ago

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People who’ve been laid off or furloughed from their jobs now have significantly more time to decide whether to hang on to their employer-sponsored health insurance, according to a recent federal rule.

Under the federal law known as COBRA, people who lose their job-based coverage because of a layoff or a reduction in their hours generally have 60 days to decide whether to continue their health insurance. But under the new rule, that clock doesn’t start ticking until the end of the COVID-19 “outbreak period,” which started March 1 and continues for 60 days after the COVID-19 national emergency ends. That end date hasn’t been determined yet.

By extending the time frame to sign up for COBRA coverage, people have at least 120 days to decide whether they want to elect COBRA, and possibly longer depending on when they lost their jobs.

Take the example of someone who was laid off in April, and imagine that the national emergency ends Aug. 31. Sixty days after that date takes the person to the end of October. Then the regular 60-day COBRA election period would start after that. So, under this example, someone whose employer coverage ended at the beginning of May could have until the end of December to make a decision about whether to sign up for COBRA, with coverage retroactive to the beginning of May.

Some health policy experts question the usefulness of the change, given how expensive COBRA coverage can be for consumers, and how limited its reach: It isn’t an option for people who are uninsured or self-employed or who work for small companies.

“For ideological reasons, this administration can’t do anything to expand on the Affordable Care Act’s safety net,” said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms. “So they’re using these other vehicles. But it’s really a fig leaf. It doesn’t do much to actually help people.”

What does this rule change mean for workers? If you have lost your job, here are some things to consider.

Playing a Waiting Game

Under the new rule, workers can keep their COBRA options open far longer than before. It’s always been the case that people could take a wait-and-see approach to signing up for COBRA during the first 60 days after losing their coverage. If they needed care during that time, they could elect COBRA, pay the back premiums and continue their coverage. But if they didn’t need care during that time, they could save a chunk of money on premiums before opting for other coverage to kick in after the 60-day period.

Now, people have even more time to wait and see. Under the rule, once the administration declares the national emergency over, laid-off workers would get 120 days to decide whether to purchase their job-based insurance — 60 days under the new rule and the regular 60 days allowed as part of the COBRA law.

“It becomes a long-term unpaid insurance policy,” said Jason Levitis, a fellow at the Center for Health Policy at the Brookings Institution. “There’s no reason to enroll until something bad happens.”

This is not without risk, consumer advocates point out. Someone who has a serious medical emergency — a car accident or a stroke — might not be able to process their COBRA paperwork before they need medical care.

Waiting too long could also affect people’s ability to sign up for other coverage. When people lose job-based coverage, it triggers a special enrollment period that allows them to sign up for new coverage on their state health insurance marketplace for up to 60 days afterward.

“You could miss your opportunity to enroll in the [insurance] exchange” created under the Affordable Care Act, said Katy Johnson, senior counsel for health policy at the American Benefits Council, an employer advocacy group.

Don’t Count on the Boss to Clue You In

Employers are not mandated to tell people promptly about their eligibility for COBRA. The same federal rule that gives workers more time to sign up for COBRA also pushes back the notification requirements for employers.

“Once an employer lays you off, they don’t have to notify you that you’re eligible for COBRA until after the emergency period,” said Karen Pollitz, a senior fellow at KFF, the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)

For many employers, especially large ones that outsource their benefits administration, notifications are routine and are continuing despite the federal change, said Alan Silver, a senior director at benefits consultant Willis Towers Watson. However, for smaller companies with fewer than 200 workers, getting the information out might be an issue, Silver said.

Costs Can Be Jaw-Dropping

Opting for COBRA is expensive because workers have to pay both their portion of the premium and their employer’s share, plus a 2% administrative fee. A 48-year-old paid $599 a month on average for individual COBRA coverage last year, according to a KFF analysis.

In addition, if people elect COBRA several months after losing their coverage, they could be on the hook for thousands of dollars in back premiums.

The upside for former employees is that sticking with their previous employer’s plan means they don’t have to start from scratch paying down a new deductible on a new plan. Nor do they have to find new doctors, as often happens when people switch health plans and provider networks change.

Ten percent of workers laid off or furloughed because of the coronavirus pandemic reported they had COBRA coverage, according to a survey conducted last spring by the Commonwealth Fund.

The COBRA extension is available only to people who worked at firms with 20 or more employees and had job-sponsored coverage before being laid off or furloughed. If the company goes out of business, there’s no health insurance to continue to buy.

Might Hospitals Step In to Pay Premiums?

Employers are typically not big fans of the program. Workers who elect COBRA are typically older and sicker than others with employer coverage, the KFF analysis found. They may have serious medical conditions that make them expensive to cover and raise employer costs.

Some policy experts are concerned that giving people more time to sign up for COBRA leaves the door open for hospitals or other providers to offer to pay sick patients’ back premiums in order to increase their own payment above what they’d receive if someone were on Medicaid or uninsured. Doing so could be a boon for some patients but raise health care costs for employers, said Christopher Condeluci, a health care lawyer who does legal and policy work around the Affordable Care Act and ERISA issues.

“Employers are worried,” said Pollitz. After getting laid off, “what if you’re uninsured and you wind up in the hospital six months in, and then the hospital social worker learns you’re eligible for COBRA and offers to pay your premium?”

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By: Michelle Andrews
Title: Administration Eases Rules to Give Laid-Off Workers More Time to Sign Up for COBRA
Sourced From: khn.org/news/administration-eases-rules-to-give-laid-off-workers-more-time-to-sign-up-for-cobra/
Published Date: Mon, 20 Jul 2020 09:00:55 +0000

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Retirement Planning

Ends-of-the-World Every Year Since 1970

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3 years ago

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August 14, 2020

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There always has been and always will be a reason not to invest or not to stay invested. This is all the mainstream media reports to us. Below you will find a list of some of the worst global events each year since 1970. I have some commentary to follow.

1970: War: US troops invade Cambodia.
1971: Civil Unrest: Anti-war militants march on Washington.
1972: Political: Start of Watergate Scandal.
1973: Economic: OPEC raises oil prices in response to US involvement abroad.
1974: Political: Nixon resigns as President of the United States.
1975: Political: Multiple assassination attempts on President Ford.
1976: World: Ebola virus.
1977: Political: Government shutdowns.
1978: Market: U.S. Dollar plunges to record low against many European currencies.
1979: World: Iranian militants seize the U.S. embassy in Teheran and hold hostages.
1980: Economic: Inflation spiked to a high of 14.76%.
1981: Political: President Reagan assassination attempt.
1982: Economic: Recession continues in the U.S. with nationwide unemployment of 10.8%.
1983: Economic: Unemployment in the U.S. reaches 12 million.
1984: Economic: 70 U.S. banks fail during the year.
1985: World: Multiple airplane hijackings around the world.
1986: World: Chernobyl Nuclear Power Station explodes.
1987: Market: DOW drops by 22.6% on October 22.
1988: Environment: Awareness of global warming and the greenhouse effect grows.
1989: Environment: Exxon Valdez dumps 11 million gallons of crude oil into Prince William Sound.
1990: World: Persian Gulf War starts.
1991: World: Mass shooting in Killeen, TX.
1992: Human Rights: Los Angeles riots following the death of Rodney King.
1993: Terrorism: World Trade Center bombing.
1994: World: Mass genocide in Rwanda.
1995: Terrorism: Oklahoma City bombing.
1996: Terrorism: Olympic Park bombing.
1997: World: Bird flu.
1998: World: Multiple U.S. embassy bombings.
1999: World: Columbine shooting.
2000: Economic: Start of the Dotcom Market Crash.
2001: Terrorism: Terrorist Attacks in NYC, DC & PA.
2002: Economic: Nasdaq bottomed after a 76.81% drop.
2003: World: The U.S. invades Iraq.
2004: World: The U.S. launches an attack on Falluja.
2005: World: Hurricane Katrina
2006: World: Bird flu.
2007: Economic: Start of the Great Recession.
2008: Economic: Great Recession continues.
2009: Economic: S&P bottomed after a 56.8% drop.
2010: Market: Flash crash.
2011: Market: Occupy Wall Street and S&P downgrades U.S. Debt.
2012: Political: Fiscal cliff.
2013: Political: Taper tantrum.
2014: World: Ebola virus.
2015: World: Multiple mass shootings.
2016: Political: Divided U.S. Presidential election.
2017: World: North Korea testing nuclear weapons.
2018: Economic: U.S. & China trade war.
2019: Economic: Student loan debt reaches an all-time high of $1.4 trillion.
2020: World: COVID-19.

While many of these events were undoubtedly terrible (and there are certainly others not named here that were worse), most of these were broadcast as end-of-the-world events for the stock market. Despite that attention, it is worth noting that these were, for the most part, one-time events. In other words, most faded into the newspapers of history. We moved on.

Obviously, some caused monumental shifts in the way the world works. Just think about how much air travel continues to be impacted by the events of 9/11. But, outside of the resulting inconveniences (if we want to call safety protocols inconveniences) associated with air travel, flying is safer than ever before.

Take a look at just about any of the events and you will find there are many that people will hardly remember. My point here isn’t that these events are to be ignored or that they were easy to stomach at the time, but that they have become a distant memory.

I want to also make the point that we should expect these types of negative events. As investors, we know these types of crises, economic catastrophes, and global phenomena are going to happen.

But in almost all cases, here is what we can say in the next breath – this too shall pass.

Will there be legal, humanitarian, economic, or some other aid required as a result of these events? Almost certainly the answer is yes, but that doesn’t mean it they won’t eventually fade into history.

Lastly, what’s worth noting is how the market has performed over these last 50 years despite the continual advertisements of the world crashing down around us. On January 2, 1970, the Dow Jones stood at 809 and the S&P at 90 -> those are not typos. These same indexes have grown (not including dividends) to 26,387 and 3,232 respectively. Amazing, no?

Perhaps what gets overlooked more than anything else is what separates the above one-time negative events from the positive stories that go largely ignored over our lifetimes. And that is a story worth telling. See the companion post below:

Unheralded Positive Events Every Year Since 1970

Stay the Course,
Ashby

Retirement Field Guide Mission:

“To help 10 million people make better retirement decisions.”

If you would like to join us in achieving our mission, I hope you will consider sharing our site if you have found it helpful in your own retirement planning.

This post is not advice. Please see additional disclaimers.

The post Ends-of-the-World Every Year Since 1970 appeared first on Retirement Field Guide.

—————–

By: Ashby Daniels, CFP®
Title: Ends-of-the-World Every Year Since 1970
Sourced From: retirementfieldguide.com/ends-of-the-world-every-year-since-1970/?utm_source=rss&utm_medium=rss&utm_campaign=ends-of-the-world-every-year-since-1970
Published Date: Tue, 04 Aug 2020 13:26:19 +0000

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Wildfire prone property insurance bill in California due for hearing

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3 years ago

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August 14, 2020

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The post Wildfire prone property insurance bill in California due for hearing appeared first on Live Insurance News.

The bill is expected to be heard in upcoming weeks as opposing sites prepare for major battle.

A new California bill, the outcomes of which will have a lot to say about coverage for wildfire prone property in the state, will soon be headed for hearing. The hearing is expected to be a heated one as strong opposing opinions have the opportunity to be voiced.

Opponents of this bill are calling it a direct attack on consumer protections in insurance.

That said, proponents of the bill claim it is the best method for making coverage available to wildfire prone property in California. The bill in question is Assembly Bill 2167. It was written by Assemblyperson Tom Daly (D-Anaheim). If it passes,it will create the Insurance Market Action Plan (IMAP) program. The IMAP program is meant to protect residential properties.

So far, AB 2167 has progressed quickly, when taking into consideration that a chunk of the legislature has been considerably restricted by pandemic crisis precautions. It was first presented in early June and backers have been saying that it was brought forward in good timing and that it has all the momentum it needs to be passed.

That said, AB 2167 has not been without opposition. In fact, it has faced considerable opposition, having been called an attack on Proposition 103, insurance consumer protection law. California Insurance Commissioner Ricardo Lara lobbed that argument at it, calling it an “insurance industry wish list, with nothing to help consumers,” and Consumer Watchdog, whose founder, Harvey Rosenfeld, was the original author of Proposition 103.

The insurance industry strongly supports the bill, saying it will help wildfire prone property coverage.

Insurance organizations such as the American Property Casualty Insurance Association and the Personal Insurance Federation both support AB 2167. The bill also has the support of the California Association of Counties (CSAC), as well as Fire Safe Councils of California, and the CalFIRE union.

The Consumer Federation of America, another watchdog organization, has predicted that if AB 2167 passes, it will cause 40 percent increases in insurance rates. On the other hand, insurance groups claim that the bill offers owners of wildfire prone property a greater opportunity for choice and competition among insurance companies based on coverage and premiums while avoiding the limitations and high costs associated with FAIR Plan coverage.

The post Wildfire prone property insurance bill in California due for hearing appeared first on Live Insurance News.

—————–

By: Marc
Title: Wildfire prone property insurance bill in California due for hearing
Sourced From: www.liveinsurancenews.com/wildfire-prone-property-insurance-bill-in-california-due-for-hearing/8549884/
Published Date: Fri, 14 Aug 2020 09:00:14 +0000

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Is this the last hurrah for bonds?

Published

3 years ago

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August 13, 2020

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Recently, I have written quite a bit about the long-term return expectations for investing in bonds. See here, here, here and here.

Spoiler alert: I don’t think it’s good.

But long-term bonds this year have been quite an amazing story as the COVID pandemic has caused the Fed to take historically monumental actions. As a result, we’ve watched long-term Treasuries tear the roof off the market. For instance, a 20+ Year Treasury Bond ETF (name withheld for compliance purposes) is up more than 31% YTD as of July 31st.

That is insane!

But there is a good reason for this increase shown below.

The red circle shows a decrease in the 30-year Treasury rate of almost 40% over a span of six months. That’s practically unprecedented with only two periods (2008 and 1981-1982) having similar declines over such short periods.

But this begs the question: Is this the last hurrah for bonds as a driver of any meaningful return? Below is the 30-Year Treasury rate over the last 40+ years.

For what it’s worth, people have been forecasting the end of the bond bull market since 2012 (maybe even earlier) and yet it has continued despite those predictions. But at some point, the bond party will come to an end.

The Fed has been clear that they are going to keep rates stable until at least 2022 which means this may not change for a little while longer. Or in the near term, I could even see the high returns continuing if we experience pandemic economic shutdown round two.

But, I can’t see a world where this is the case for much longer than that – most importantly over the span of a 30-year retirement.

The official end of the bond bull market depends on a recovery from the pandemic economy as well as a few other factors causing rates to rise. But when they do, it seems likely to me that this may be the last great hurrah for bonds for quite some time.

The question is when to get off that train and that undoubtedly requires a personal answer.

Stay the Course,
Ashby

Retirement Field Guide Mission:

“To help 10 million people make better retirement decisions.”

If you would like to join us in achieving our mission, I hope you will consider sharing our site if you have found it helpful in your own retirement planning.

This post is not advice. Please see additional disclaimers.

The post Is this the last hurrah for bonds? appeared first on Retirement Field Guide.

—————–

By: Ashby Daniels, CFP®
Title: Is this the last hurrah for bonds?
Sourced From: retirementfieldguide.com/is-this-the-last-hurrah-for-bonds/?utm_source=rss&utm_medium=rss&utm_campaign=is-this-the-last-hurrah-for-bonds
Published Date: Wed, 12 Aug 2020 13:47:16 +0000

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