ADP: Unemployed Need To Apply For Program In Which They Were Already Enrolled

One of the programs of the American Recovery and Reinvestment Act is COBRA Continuation Coverage Assistance. It helps people who have lost their jobs pay the sometimes hefty premiums for continued health insurance coverage, paying 65% of their premium. The program started in February, and Renee was enrolled right away. This month she was billed for her full premium again with no warning.

I have been unemployed since December 2008 and I’ve been using COBRA for medical insurance ever since.

I was very happy to learn about the American Recovery and Reinvestment Act COBRA Continuation Coverage Assistance that would allow me to pay 35% of my normal premium (about $75/month for me instead of $400/month).

When I logged in today to ADP BeneDirect today to pay my premium, the ARRA COBRA premium discount was gone. The full balance was due. I can’t afford to pay $400/month for health insurance so I called ADP (1-800-770-7981). After being on hold for over 30 minutes, getting cut off several times, and ending up in three different phone systems, I spoke with a (foreign) representative. She informed me I was not receiving the premium discount because they were waiting for some paperwork from me. I could find the “request form” here and fax it back and wait 48-72 hours. Once I “request” the discount, it would then be applied to my COBRA premium.

I am disgusted, that I was receiving the discount for 3 months, but now I have to fill out a form to request the discount be applied to my premium. Nowhere on the government site does it say, “fill out this form to receive the COBRA premium discount.”

I hope you will share this with others so they do not miss out on the COBRA coverage assistance.

Was it a glitch? Why should customers have to opt back in to a program in which they were already enrolled? Have any other readers run into this problem with their insurers?

COBRA Continuation Coverage Assistance [U.S. Department of Labor]

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  1. pecan 3.14159265 says:

    I’m not enrolled because I still get health insurance from Mr. Pi’s job…which was a lifesaver for us, because health care is one of those things that we would never, ever give up, but are queasy about every time we visit the doctor or have to get medication (I was billed $40 to see a dermatologist, for her to poke me in the elbow, and put a piece of gauze and a bandaid on me).

    But for the unemployed (who can’t get medical coverage anywhere else) this is better than going without health coverage of any kind. Unfortunate that it can be so expensive.

    However…and this is a question I had for the readers out there. I got the envelope with all of this stuff about enrollment and understood maybe a third of it. If I did nothing with the paperwork, I’m not enrolled, right? They don’t just assume that all unemployed people need to be under COBRA and immediately opt you in, right? I was freaking out about that after I threw out the paperwork, and I even had a bad dream about it.

    • Laura Northrup says:

      @pecan 3.14159265: My understanding is that you have to apply to get COBRA, but people already enrolled in COBRA were automatically enrolled in the program that pays 65% of their premiums.

    • missing_piece says:

      @pecan 3.14159265: If you left your job for any reason from Sept (I can’t remember the exact date) on, you’ll receive one of those packets. The employers are required to send them to every eligible employee, regardless of if they enrolled or not. I left my job in September and received a packet, even though I wouldn’t qualify for the subsidy because I left voluntarily.

      The forms have to be sent out or the company isn’t in compliance with the federal government if they’re not, and can be fined for each day the packets aren’t sent.

      Don’t worry though, you’re not breaking anything ;)

      • hmk says:

        @missing_piece: Interesting… I quit (with good cause – unemployment case pending) a few weeks ago and my employers didn’t give me a damn thing. I also recall them not giving my friend some “congratulations, you’re laid off” paperwork when they got rid of her. They did at least go over COBRA with her though. But don’t pay the bill on time.

        I wish there some some state or federal agency who gave a crap about this (I checked, the state doesn’t care).

        • Raanne says:

          @hmk: Not everyone qualifies for Cobra. It depends on the size of the company in many states. I know that when I was laid off in April it wasn’t even an option for me (small company – only 6 employees). Luckily I was able to find a job and have a start date before the end of April so I was able to have continuous health insurance (important b/c I am pregnant). Unfortunately that new job involved moving to another state, and uprooting my family. but hey – these days you do what you gotta do.

          • subtlefrog says:

            @Raanne:
            Does your new coverage cover the pregnancy? I ask because a friend got screwed over when our department switched providers while she was pregnant. The new coverage refused to cover her because it was a “pre-existing condition” (I kid you not). Upon investigation, we were told (a group of very rabid grad students) that it is generally the provider you have at the time of conception that is required to cover you. Maybe this varies by state (that was FL) but I’m just curious…

            • Raanne says:

              @subtlefrog:

              yes – when you are switching jobs, they have to cover preexisting conditions, provided that you didn’t have a break in your insurance before. I think its part of employment law that they can’t treat pregnancy as a preexisting condition. For some reason i think this only applies to employment insurance though, because i know when i was looking at buying an individual plan, none of them would cover it.

    • halcyon22 says:

      @pecan 3.14159265: If you weren’t on COBRA prior to 3/1/2009, you definitely would not be automatically enrolled; this is mainly because former employers are paying the full premium, and only get reimbursed through their payroll taxes. If you were already on COBRA at that time, it’s up to the employer whether to automatically put you in the subsidy plan. Either way, anyone who was involutarily terminated will get a renotification and an additional 60 days to enroll.
      @missing_piece: The date you’re thinking of is 9/1/2008.

      Disclaimer: I work for one of the larger health admin companies and had to put in a lot of extra hours to implement ARRA changes.

    • Oranges w/ Cheese says:

      @pecan 3.14159265: I was laid off on 4/3 and I had to contact my HR director myself to get any information about continuing coverage. I got my last paycheck, but as for anything else it was pretty much a “see ya, and thanks for nothing” approach.

  2. kc2gvx says:

    I never got a discount and have been receiving COBRA benefits since October 2008. I got the form last week for the ARRA discount and had to fax or mail it back completed to ADP. Not sure why I have to opt-in, but those are their rules.

    • Skaperen says:

      @kc2gvx: What is actually on the form? Any information they shouldn’t have? Are you agreeing to terms you should not have to (e.g. binding arbitration)?

    • heart.shaped.rock says:

      @kc2gvx: You have to opt in because simply being on COBRA doesn’t mean you qualify for the subsidy. You have to (1) not be eligible for medicare (2) and not be eligible for any other coverage, say through a spouse or new employer. Notice the word is ELIGIBLE, not COVERED. For example, if your spouse has insurance that you could be on, regardless of the cost, you’re not eligible for the subsidy.

    • heart.shaped.rock says:

      @kc2gvx: The official form should have only asked you four questions:
      1. Were you involuntarily terminated?
      2. Did you elect COBRA?
      3. Are you eligible for medicare?
      4. Are you eligible for coverage under any other plan.

      That’s it.

    • halcyon22 says:

      @kc2gvx: IIRC, the ARRA text is pretty vague on this point, so it’s up to your former employer whether you have to opt-in, not ADP. From the site linked in the article:

      Q8: How do I apply for the premium reduction?
      If you were covered by an employment-based health plan on the last day of the employee’s employment, the plan should provide you a notice of your eligibility to elect COBRA and to receive the premium reduction. The notice should include any forms necessary for enrollment. You may also want to contact your plan directly to ask about taking advantage of the premium reduction.

  3. missing_piece says:

    Per the site linked above:

    “Q8: How do I apply for the premium reduction?
    If you were covered by an employment-based health plan on the last day of the employee’s employment, the plan should provide you a notice of your eligibility to elect COBRA and to receive the premium reduction. The notice should include any forms necessary for enrollment. You may also want to contact your plan directly to ask about taking advantage of the premium reduction.”

    You should have received information in the mail – it was to be sent out by April 17 from your plan administrator. If you didn’t get it, just fill out the form ADP told you to complete and send it in. They should retroactively credit your account the 65%. Done and done.

  4. Ben Miner says:

    I don’t have any direct experience with this ADP service but I have been the administrator for ADP payroll, timesheets, and online pay stubs / W2 and can say from experience that ADS “glitches” a lot. For example, on at least two occasions they just flat out did not process a payroll despite every step being followed and every confirmation received by the employer and it can take HOURS on hold to get a clear answer about charges on the invoice.

  5. Michael A. B. says:

    The employer having these forms is also what allows them to receive the reimbursement for the premium discount. The government really gave the employers and COBRA administrators very little time to get the notices out, relative to how long new forms, billing systems and accounting would normally take. I can say for certain that every employer’s HR has been working very hard to get these letters out and get the discounts into place.

  6. heart.shaped.rock says:

    Those of us in the payroll/HR fields refer to ADP as “Another Damn Problem”. I’m not at all surprised that there are issues with them.

  7. halcyon22 says:

    This is definitely a glitch in ADP’s system. Once they receive the enrollment paperwork, they don’t need additional forms to continue to bill the 35%.

    I think it’s a great thing for the unemployed, but it’s a little tough for the former employer since they have to pay the full premium and only get reimbursed the 65% ARRA subsidy through their payroll taxes.

    Disclaimer: I work for one of the larger health admin companies and had to put in a lot of extra hours to implement ARRA-related changes.

  8. Apeweek says:

    We had to suffer with ADP for a while, too, when the wife lost a job – and wound up with suspended health insurance for several months while being simultaneously double-billed. Welcome to unemployment hell.

  9. rencsimilcsi says:

    I have been on Cobra for several months. I was paying a discounted rate, but it disappeared this month.

    I called ADP and asked why my rate increased and was told to fill out and fax back the opt in form and wait 72 hours.

    When I logged back into my account, I discovered I have apparently been overpaying ever since electing COBRA coverage and now my account is paid through the end of June? I’m thankful I don’t have to make a payment, but what is going on…?

  10. Joshua Brooks-Budhoo says:

    Several companies are using varieties of the “opt-in” method of enrollment for ARRA-discounted COBRA programs. Passive has been the general way to go, but active (you must call and request it) is still out there.

    Extra forms should really not be required, though.

  11. nsv says:

    “The COBRA election opportunity relates to an involuntary termination of employment that occurred at some time from September 1, 2008 through December 31, 2009.”

    I was terminated in August. I’ve been paying more than $460 every month since then. Oh yeah, and I can’t get unemployment.

    When the credit cards are finally maxed out I have no idea what I’ll do. But I’d love to know why I don’t qualify.

    • Alarmpro says:

      @nsv: The ‘crash’ of the economy had not occurred before September 2008. In August the economy was not so bad (and Wall Street was at an all time high). This is part of the stimulus spending, meant to help those laid off during the ‘crash’ period (thanks AIG).

      • wrjohnston19283 says:

        @alarmpro:

        The stock market was not at an all time high in August of 2008 – the highest it got was 1313 on august 8th. It’s highest close was 1576 in October 2007. The stock market had been dropping pretty much every month between 10/07 and 9/08.

        NSV – I understand your pain – I bought a house in 2008, missed out on the $7000 “loan” credit available that year, and now people who are buying this year get a $8000 freebie. I took the risk of buying KNOWING that price would most likely drop, but I found a place I wanted. We shouldn’t be bribing people to buy homes, but if we are, lets apply a decent lookback period.

  12. mizmoose says:

    I had COBRA after I lost my job at the end of January. You are required to pay by the end of each month of coverage. I paid in mid-Feb for Feb, I paid by the end of March for March. I paid for April at the end of April. They claimed that was really my March payment, I was late with that, and so they canceled me, retroactive to the end of March. Appeal? No, we’re right, you’re wrong, too bad, so sad.

    Even more fun — To get the Federal “pay less” they required you to fill out funds “claiming” the right to the 35% payment. They didn’t send them out until the last possible minute (the Feds, iirc, require them to make it available by mid-April) and are of course sitting on any refunds of the 65%. (However they happily refunded my last payment within a week, to remind me of just how canceled I am.)

    So I’m out the 65% extra the Feds are giving them, I’m out COBRA, and, well, let me tell you — insulin isn’t cheap.

    • wrjohnston19283 says:

      @mizmoose:
      “You are required to pay by the end of each month of coverage.”

      Are you sure about that? I’m paying for individual coverage (non-COBRA) for my fiance, and they want their payments WAY in advance – I just wrote the check for the JULY premium this morning.

      • missing_piece says:

        @wrjohnston19283: the end of month requirement is the end of a 30 day grace period from the due date on the bill. Did you pay at the end of the grace period? Or did you pay when the bill was due? If you paid by the due date, you’re well within your rights to be reinstated.

        Also, the reduction only goes from March 1 forward, you wouldn’t be seeing a refund for payments made prior to that date.

        And just as an FYI – most benefits administrators sent their forms close to the last minute, because they didn’t have a lot of time to get them out. Believe it or not, the coordination of this kind of thing requires a lot of implementation and coordination. It’s not juts a matter of printing out a few letters – there’s a lot to it, so it’s not like they could be sent out in two days or anything. I know this from experience.

  13. Anonymous says:

    As an HMO employee, I will say that the timelines we were given to implement this new process were impossible to meet. The fact is, if you receive a subsidy you must prove that you qualify under the government regulation. To do this, you must complete the attestation even if you had already enrolled in COBRA with the full premium. It sounds like ADP may have applied the discount up front to give people time to complete the paperwork.

    I’m not defending ADP’s process here as I’ve dealt with them many times in the past as a TPA with less than stellar results, but this law has left everybody in the industry scrambling and has become an administrative nightmare which we didn’t have time to plan for.

  14. mbd says:

    Everyone who wants the discount needs to re-apply. Some COBRA administrators seem to be pro-active about automatically send out the paperwork, others, it seems, are not.

    Once approved for the discount, it is retroactive back to January or whenever you first got COBRA. If you have previously paid any of those months, the overpayment counts as a credit moving forward.

    COBRA must be paid before the first day of the month to be covered, otherwise you are out of the program. Some COBRA administrators allow you to pay late, others do not. They are not required to accept late payments.

    • missing_piece says:

      @mbd: Where are you getting your information?
      All employers were required to send out notices within 60 days of Feb 17, 2009.
      The discount is not retroactive back to January – it’s retro back to March 1, 2009.
      COBRA Administrators are required to give a 30 day grace period for payments.

  15. David Brodbeck says:

    I realize this is a nitpick, but isn’t 35% of $400 equal to $140, not $75? Is there a typo in the article, or am I misunderstanding how this program works?

  16. Anonymous says:

    Now read this!

    I am extremely thankful that the American Recovery and Reinvestment Act (ARRA) of 2009 exists; however, it concerns me that eligible persons may need the premium reduction immediately, not six months later as is the case for me. ARRA was enacted to help people, but I, personally, have yet to see it.

    Here’s the entire story:
    http://usurprise.wordpress.com/2009/07/08/cobra-premium-subsidy/

  17. Janice says:

    After loosing my job at Wal-Mart, I was offered the COBRA plan. It was going to cost me $800 a month to keep it. Because Wal-Mart deemed my termination was misconduct, unemployment has been denied so I had to appeal the decision. Even with paying only 35% I couldn’t pay because I have no income what so ever. I have had to apply for state medical care, food stamps and anything else I can get. I don’t even have a clue how I am going to pay this months $500 rent.