AFSCME 3357-HOF'S BLOG

Heads Up for Employees of Self-Insured Companies
Your Loss of Health Insurance Coverage Could be Immediate and Retroactive

When it comes to health insurance, the UAW Legal Services Plans are self insured. We have Great West as an administrator, but with the possible exception of stop-loss and catastrophic claims, the money comes from the firm's general fund. An article in today's Wall Street Journal, available online from wsj.com here, illustrates clearly the hazards faced by workers when their self-insured company promptly goes bankrupt. Claims payments stop immediately. If you have received treatment and submitted a claim, and that claim has not been paid, tough luck.

Given the troubles in the auto industry, my advice to all of my UAWLSP colleagues is to avoid discretionary medical procedures and claims until you can be sure of at least a couple months of continued funding, especially if the plan that pays your paycheck is sponsored by one of the most-distressed automakers. While today's news states that there is an interim deal with Congress to supply some money, that money is not yet in the bank. Moreover, Even if the automaker is funded, it is likely that each of the automakers will renegotiate its contract with the United Auto Workers. We don't know what that contract will and won't include, but we know there will be significant cutbacks.

Also note, if your insurance is cut off because your employer goes bankrupt, there is no right to COBRA continuation of benefits. If your insurance is cut off abruptly because your employer discontinues it, and if your spouse is covered by a plan at work; try to find a plan administrator who can sign a Certificate of Group Health Plan Coverage. This should allow you to enroll in your spouse's plan without waiting for the next open enrollment period.

If you are laid off by an employer continuing operations, you will likely be entitled to COBRA coverage. The problem with COBRA coverage is that it is expensive, and many times, it's outside of the budget of a person who doesn't have a job. One thing to remember is that each covered member of your family has an independent right to COBRA continuation coverage. This means that even if you can't afford coverage for the whole family, you may be able to afford coverage for one family member who has a medical condition that makes that person uninsurable otherwise.