This program has been extended not only to last for fifteen months, from the earlier nine, but also applies to those laid off in April or May of 2010.  The subsidy is available for people who lose their jobs, not those who quit.

And earlier this week, on December 21, the President signed a law extending the COBRA subsidy.  The subsidy is available for a maximum of 15 months.  As discussed here a few months ago, the COBRA subsidy reduces the premium for the terminated individual to 35% of the full freight; the employer pays the remaining 65%, but receives a dollar-for-dollar credit against withholding taxes, so it’s really just an advance.  Employees who were eligible for the original COBRA subsidy can extend their coverage at the reduced cost through February.  (These were employees involuntarily terminated between September 1, 2008, and December 31, 2009; now the termination cutoff date is extended through February.)  Employees who dropped the coverage as too expensive will be given the option to rejoin the plan.

With unemployment still high, Congress is now thinking about extending the COBRA coverage for six more months, for those people who lost their jobs between April 1 and December 31 of 2009.  In addition, even better for some, the COBRA subsidy discussed here would be extended as well. The subsidy has the federal government picking up 65% of the cost of the premium, which is repaid to the employer by a credit on the payroll taxes.   If passed, the new law will be called the “Extended COBRA Continuation Protection Act of 2009.”

It’s hard to think of an interest group that would oppose this law, other than those who think that the government is subsidizing the unemployed too much.

Sometimes genetic information is akin to health information.  If the employer has private health or disability information in its possession, it must be segregated and protected in locked file cabinets, and disseminated on a need to know basis.  Thus, the human resources department may be able to access the information to engage in a discussion about accommodating an employee’s disability, but a supervisor or coworker is not allowed to snoop into an employee’s health file.

But the GINA law goes further than requiring segregation of health documentation.  Genetic information is not only an intensely private matter, but it is never considered relevant in the workplace.  For example, an employee’s health status can be material to the employee’s request for medical leave or a reasonable accommodation, or it may form the cornerstone of a worker’s compensation claim.  But an employee’s gene making her more susceptible to breast cancer does not affect her ability to come to work and do her job.  It may be interesting to the health insurance carrier, however, which may want to raise premiums for the company knowing that the employee has a potential susceptibility.

When the law was first introduced, Representative Louise Slaughter of New York shared the following data:
“Health care professionals are also hesitant to make their genetic information available. In one survey of genetic counselors, 108 out of 159 indicated that they would not submit charges for a genetic test to their insurance companies primarily because of the fear of discrimination. Twenty-five percent responded that they would use an alias to obtain a genetic test so as to reduce the risk of discrimination and maximize confidentiality. And, 60 percent indicated they would not share the information with a colleague, because of the need for privacy and fear of job discrimination.”

She also stated that two major employers had secretly obtained and tested genetic material from employees.  This law will prohibit both secret and overt genetic testing and genetic discrimination, using the same remedies as are available to employees under Title VII.

The new law, if it passes, would forbid rating based on health status.  In the end, the law of averages across the spectrum of the state or the country will drive insurance prices.  In addition, the new law would end the lifetime cap on insurance benefits.  This was an issue advocated by the late Christopher Reeve, who would not have made the progress he did without personal resources.

Finally, the law would end the practice of discrimination against women.  There are insurance plans that refuse to cover women of child-bearing years, or treat pregnancies as uncovered conditions.  (Maryland law is stronger than some states, and does not permit a blanket prohibition against insurance for childbearing.)

The economic hardships that have befallen many employees and businesses have brought some of these issues to the forefront.  I hope we have the fortitude to make some much-needed reform to the existing system.

I commented on this last month.  Small businesses not only have smaller profit margins, often, but also have less favorable access to affordable health coverage. The new article by Jay Hancock cites this sobering statistic: “in metro Baltimore, … CareFirst and UnitedHealth control nearly 80 percent of the trade. That’s not a market. That’s oligopoly – market failure.”  Anecdotally, the article notes that the number of companies offering health insurance for small businesses has diminished, and the rate of increase is in double digits annually, far higher than inflation.

The market conditions create a prescription for failure.  I’m dismayed that the public health insurance option appears to be dying in Congress.

Obviously this report is being released in conjunction with the current debate on a national component to the available health insurance coverage.  This morning’s Bob Edwards show on satellite radio featured Wendell Potter, a former CIGNA executive who spoke to Congress last month about his experiences in an industry more concerned about its bottom line than the health of its insureds.  You can read the testimony here.

One of Mr. Potter’s claims is that insurance companies cull their rolls of sick individuals and families, and

“They also dump small businesses whose employees’ medical claims exceed what insurance underwriters expected. All it takes is one illness or accident among employees at a small business to prompt an insurance company to hike the next year’s premiums so high that the employer has to cut benefits, shop for another carrier, or stop offering coverage altogether – leaving workers uninsured. The practice is known in the industry as ―purging.. The purging of less profitable accounts through intentionally unrealistic rate increases helps explain why the number of small businesses offering coverage to their employees has fallen from 61 percent to 38 percent since 1993 . . . “

As far as I could tell from his interview with the great Bob Edwards, Wendell Potter is not out hawking a book, but is speaking out in reaction to the lobbying efforts of insurance companies trying to avoid a national health insurance option.   The small business effect is similar to what I posted about several days ago,  here.

The cost of health insurance has risen steadily over the past few decades, faster than inflation; perhaps only college tuition prices have shown a similar independence of the inflation rate.  According to the National Coalition of Health Care, premium costs for a family of four topped $12,000 per year.  It’s no wonder that many employers do not offer insurance coverage, or require employees to pay an increasing share of it.  In an era when wages are not rising, this hurts, though not as much as not having insurance at all.  Then, when an employee becomes unemployed, COBRA or its state equivalent requires the employee to pay the entire cost, plus a 2% administrative fee. (But see the limited period of relief that Congress has granted.)  Still, COBRA ends after 18 months, after which the employee’s options are often limited to a state health pool, or a private plan.

When did health insurance become a common fringe benefit?  It is somewhat arbitrary that the American worker or her family is dependent on a certain type of job (full-time, with a larger company) to enjoy health insurance coverage.  Apparently during World War II, the government had to approve wage increases.  In order to attract workers some companies added attractive fringe benefits.  Unions, likewise, bargained for generous health insurance coverage.  Sixty years later, the climate has changed dramatically.  Perhaps the time is right for a centrally provided health insurance agency.  Then we’ll see how the large companies use the savings.

Trying to deal with the state of the economy, Congress gave some premium relief to laid off employees.  Under the American Recovery and Reinvestment Act of 2009, employers must pay 65% of an employee’s COBRA payment for employees laid off between and December 31, 2009.  While employers will front the cost of the insurance premiums for COBRA-eligible individuals, the federal government will issue a payroll tax credit to the employer to compensate for the portion underwritten by the employer.   You can read the law here.

COBRA is available to employees who quit or were terminated for reasons other than gross misconduct.  COBRA applies only to employers with at least 20 full-time employees.  The subsidy under the With the American Recovery and Reinvestment Act of 2009 phases out as the gross income of the employee rises.

For smaller employees in Maryland, the state mini-COBRA law kicks in.  Employees are entitled to continue on health insurance coverage, provided they pay the premium plus, at most, a 2% administrative charge.  Smaller employers are also subject to the premium relief system, but do not have to advance the 65% of the premium that larger employers do.  Under theMaryland health insurance continuation plan, the health insurance carrier provides the appropriate forms to the laid off employee, and it will accept the 35% premium sent by the former employer.  Then the insurance company will then get the tax credit provided by the federal government to cover the 65% premium payment not paid by the unemployed person.