I realize that this recent change in how COBRA premiums can sometimes be covered probably does not apply here, but I wanted to pass the information along on the outside chance that it could help somebody who does not know about this. (And before anybody gets all wound up that this is political, it is not. It is simply information about COBRA coverage under the stimulus plan.)
Under the stimulus plan there is a 65% subsidy of the COBRA premium for those who have been involuntarily terminated and who meet other requirements, including not crossing a certain income threshold.
Retirement does not officially qualify, as I understand the eligibility requirements to pay COBRA premiums at the highly reduced rate of 35%.
But when I heard about this subsidy, my first thought was whether or not there could be circumstances of retirement which would qualify. In other words, when is a retirement not a retirement? I do not know the answer to that question, but I do know that many employers are trying to find ways to cut back and although "forced" retirements could and should put an employer on thin ice, these things have a way of happening.
Of course, many employers offer retirement packages that would appear to clearly define the separation. But what if there is no package or pension start or anything else other than just a job gone for someone who happens to be "retirement age"? Would such a circumstance actually be an "involuntary termination" even if retirement is waiting on the other side of the door? This economy has made me wonder how many people are being led into "retiring" before they really want to because their employer has to cut back.
I am including here a link with a short explanation of the COBRA subsidy for the "involuntarily terminated." I really doubt that it would apply in most cases for someone who is retiring. But just in case anybody reading here would like more information, here it is. It just seems like this could be something to think about under certain circumstances.
http://personalinsure.about.com/od/h.../aa021809a.htm
And please remember that I have no idea what I am talking about. I am not a financial adviser or an accountant or anything like that. I just tend to think about stuff like this.
And please be very careful and make sure you completely understand everything about how to navigate your way through this insurance coverage stuff. It can be complicated and can get slippery. Make sure you know exactly what you are doing. And although full premium COBRA can be ridiculously expensive, at least it is available, by law, and could turn out to be your best plan for good continuous coverage.
For early retirees, insurance coverage is often the most important key. Understand it clearly.
Boomer