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Aetna responds to COBRA changes

Editor's Note: The advice on this page is now outdated but remains published because it provides a historical perspective of the issue discussed. Please see other sections of this Web page to find more recent information.

3/6/09, updated 4/30/09 - Aetna, the nation's 3rd largest health insurer, confirmed that the economic downturn has resulted in increased COBRA activity in an e-mail to members on Wednesday March 4. The company simultaneously announced the launch a new campaign to help members, providers, employers and others maximize their benefits during this economic downturn including information about COBRA benefits under the American Recovery and Reinvestment Act of 2009. The Aetna Web site also includes tips on how members can save money, cope with stress and more. Printed materials about COBRA are also available through its plan representatives, agents and brokers.

Aetna notes that while the U.S. Treasury and Department of Labor have recently issues some guidelines for employers about the new law, details about eligible state continuation plans are still unavailable. From a practical perspective, this makes determination of eligibility impossible at this time. Additional guidance is expected from the Departments of Labor, Treasury and Internal Revenue Service before the new COBRA benefit law can be properly administered.

Meanwhile, Aetna assures its customers, agents and members that they are making the necessary systems and process changes to ensure compliance with the new COBRA law.

The stock price of Aetna dropped sharply in April 2009 as the cost of implementing the COBRA program are expected to further erode earnings. Bloomberg.com said "expenses were pushed higher by dismissed workers who continued buying insurance through the government- subsidized Cobra program, as well as those who ramped up medical treatment as firings loomed". Aetna's CEO Ronald Williams confirmed that this is a unique recessionary effect rather than a long term trend.


COBRAplan.com provides help with COBRA issues

COBRA continuation coverage may provide temporary protection when changing jobs, going through a divorce or negotiating other life transitions. Choosing the right health insurance is crucial to protect your health and financial security.