We interrupt this blog for a cautionary and personal tale regarding health care insurance in the U.S. – specifically the predatory practices by at least one player deep within the system. This will be a long tale, and I apologize in advance for the length. The summary: If you lost your job and are using the ARRA subsidies to help pay COBRA premiums, be diligent about canceling this coverage once you are employed again. When I say diligent, I mean do not trust anyone involved in the process – be careful, and get everything in writing.

Background: in the U.S., you pay a small portion of the actual health care insurance premium while your employer pays the lion’s share each month. The Consolidated Omnibus Budget Reconciliation Act of 1986, or COBRA, provides you with the opportunity to remain a part of your employer’s group health plan following termination of employment – but you must pay the entire premium. This unwelcome shock to your finances can come at the worst time, as a laid-off employee can find themselves paying three times what they’re used to paying at precisely the moment they lose their source of income.

Earlier this year, Congress passed the American Recovery and Reinvestment Act (ARRA) of 2009 – part of these provisions included a subsidy for partial COBRA health care premiums if you have been laid off from your job. The idea is to “restore” the employer’s share of the premium for up to nine months’ coverage. With so many losing their jobs since October of 2008, this is a welcome lift. I should mention that the previous employer does get hit with additional costs, as they are billed for their share of the premium for a terminated employee. Employers and employees must opt-in to the ARRA program.

My previous health coverage ended in February, whereupon I secured COBRA and began paying ADP my premiums as directed. Since I started paying the before ARRA took effect, I paid full-price. The ARRA subsidies were then applied to future premiums…and herein lies the tale.

I accepted full-time employment at my new job on 1 June. The following is a timeline written after an otherwise wasted day, in hopes this will help others from wasting theirs:

5/14 – Send email - first notice to ADP of intent to cancel coverage, as I’ve accepted full-time employment. Asked procedures to cancel and how to get refund of premiums paid.

5/15 – Bride calls CSR #1, who says ” Just send or fax us a letter saying you want to cancel coverage, and you’re all set!”

6/4 – Letter faxed as per instructions.

6/10 CSR #2 – Tells me I needed to have faxed information as of 5/31 to get it cancelled for June. Nevertheless, she promised cancellation as of 6/1.

6/24 CSR #3 – Apparently, someone overruled CSR #2 and I have to pay for June anyway. More worrisome, I’m on track to pay July as well. For some reason, my account status is Active. CSR #3 announces a cancellation as of 6/30, and issues a refund for July and August premiums. I vow to get June back somehow, since any collection of COBRA subsidy under ARRA while employed could lead to a penalty – basically, ADP is compelling me to defraud the U.S. Government by applying an ARRA subsidy against COBRA premiums for any date after 1 June!

6/30 ADP responds to my 5/14 email. Announces July has been paid. If I want to avoid paying August, I am invited to dance this dance once more. Amazingly, they admit to having my request for cancellation – but want it again. I’ve bolded salient portions below and masked dollar figures – I have not fixed the broken English:

“We have reviewed your account as per the request below. Our heartiest Congratulation to you for your new Job! The account is paid in full through 07/31/2009 and we have a credit of $xxx.xx in the account. In reference to your email regarding early cobra termination, we have received a written request on 06/04/2009 to cancel coverage effective 06/01/2009.

“Please be informed that you would need to post mark the letter by the last day of the previous month for the changes effective from the 1st day of the next month (that is, by 05/31/2009 for the plan changes effective from 06/01/2009).Since we received the request on 06/04/2009, we are unable to terminate the coverage and we have already forwarded the premium amount to the insurance carrier.

“However, if you wish to cancel cobra coverage effective 08/01/2009, you would need to send us a plan termination request letter via mail or fax, stating the effective date from when you would like to cancel cobra coverage, along with the account number in the letter and the letter needs to be signed by yourself and your spouse. You would need to post mark the letter by the last day of the previous month for the changes effective from the 1st day of the next month (that is, by 07/31/2009 for the plan changes effective from 08/01/2009).”

In English: Start over, and get it done today or we’re stealing your August premium as well.

6/30 (8:00 am) Called CSR #4 and asked for supervisor. Bride standing over me now, weapons at the ready.

6/30 Poobah #1 is horrified. “Not proud of my company today,” says she. She promises to fix all, but first has to talk with previous CSRs, then would call back “this morning.” Never heard from her again.

6/30 (1:00 pm) Called CSR #5. Claims Poobah #1 made it a priority case, and they’ll be back to me “tomorrow.” (Interestingly, he says he has a note in the case file that Poobah #1 called me to convey this information already. Nice.) Problem: tomorrow is 7/1, at which point, they can then charge for me for August since they didn’t hear from my by 6/30 – according to the email. Not accepting this answer, as the only written correspondence indicates the need to re-submit paperwork by 6/30. “Sir, I am trying to help you.” This is where I utter the phrase, several times, ”Do better, Jack!”

6/30 (1:30 pm) Transferred to Poobah #2. He assures me the research department will review the June issue and resolve in 48 hours. He is confident July and August will be refunded. I now refuse to hang up the phone until he sends me an email to this effect. He tells me this is not possible, he can only email people within ADP.”Do better, Jack.” He tells me to respond to the morning’s email and he will reply with the info. Ten minutes later, he claims technical difficulties have prevented the email from going out, and can I give him 24 hours to send it again? Yes, he really said that. “No. Do better, Jack.” He implores me to grant him more time, as he is messaging his supervisor, Uber Poobah #1. I ask to speak to that person, but – you guessed it – that is simply not possible. They will not come to the phone. I have reached the pinnacle of ADP Customer Service: all decisions occur above Poobah #2, where men and women labor in a client-free workplace.

By 2 pm, I have an email saying July and August will be refunded. Still wrestling over June, but mercifully, I let Poobah #1 hang up the phone.

My concern is not with my refund – I am employed and have the resources to eventually resolve this matter. And I will let the government know I did not intentionally defraud them out of a June premium subsidized with ARRA funds. My concern is those who cannot make their own hours and spend a day with ADP. What is happening to the hourly employee, (who, for example, may have received this end of month email after business hours today)?

What is happening to those who cannot spend hours on the phone with a call center?

What is happening to those who were supposed to be helped by ARRA? If they are still unemployed, they are still receiving health care coverage. But if they resume employment – they are likely being drained of their premium refund by ADP. ADP’s choice was to apply the ARRA funds to future premiums rather than refund the money and bill me. This decision ensured their fees for several months, as their efficient CSRs effectively stonewalled me for a full six weeks. The less persistent may give up – and these souls will then find themselves charged a 10% fee and told to return the subsidy for health coverage they tried to cancel.

To ADP, and I suppose United (see previous) or any business struggling to survive today, I guess the message is simple: Do Better, Jack.

While she is not nearly this old, the Bride learned to drive on a Model A pickup truck. The experience was centered around the magic of personal locomotion – the human was a bit of an afterthought as the engineering of these first mass-produced automobiles focused instead on harnessing the challenging technology of the day. She regales me with her memories: set the choke, engage the spark, and other terms lost to history. The automatic transmission, the electric starter, power windows and cup holders had not yet been invented. Today, buying a car with a manual transmission is within the interest of the hobbyist, but for most of us who are buying transportation rather than a car – the latter is the domain of a fading breed. The need to accommodate the human to early technology has passed, we can now tailor the experience to our comfort and convenience.

Back in the 1970s, I had the occasion to listen to one of the first Sony Walkman devices to enter the U.S. The sound was remarkable, I knew I was experiencing history. Of course, if you moved the portable device, the cassette tape would warble and distort the sound. No matter, the engineering needed to produce this remarkable sound hadn’t yet caught up to the iPod experience. I accepted the limitations of motion because the innovation of the sound experience was worth the inconvenience.

What is your focus when you purchase transportation services – are you buying the car or the ride? For air travel – my real point – are you buying the airline or the flight? For years I supported United, I knew the airline industry was a difficult yet essential industry, and I believed that loyal customers were core to the health of the industry. I earned “elite” status, and was able to book exit row seats and the occasional upgrade to human-sized seats and actual service. I have been a United “member” since 1991.

What I missed was the dynamics of the market – so long as someone is willing to pay to fly, someone else will provide the service. United is an important employer, but it is apparent their system of service delivery places accommodation of the human as a last priority. Recently, I began to listen as fellow travelers told me of airlines such as Virgin America, Jet Blue, etc, who considered the user experience in their design of the cabin, the services, etc.

For me, today, this stops here. This far, no further! (Hoping you can hear Patrick Stewart as you read that.)

I write this while aboard my first Virgin America flight. I am less than an hour into the flight, but it feels like it’s only been 10 minutes or so. The simple reason, I am not focused on the airline, the aircraft, or the fact that I’m strapped in and hurtling through the air at 30,000 feet. I am not deprived of all sensory input so that I may focus on the flying experience. Instead, my senses and mind are engaged – not enduring the broadcast of a single movie choice that changes every two weeks, but enjoying options from on-demand television and video as well as in-flight Internet access. Rather than treating my weekly cross-continent commute as a time of sensory deprivation, I am connected and engaged.

Some quick comparisons, written now two hours into a five hour flight. I don’t think I need to wait for landing to finish this blog, though:

The prices are comparable. Would I rather stay with United, in hopes that I get upgraded more often to an in-flight experience that is better than the folks back in steerage? Or move to an airline that engages and connects every passenger? Where every seat is at least tolerable? My travel agent is concerned that I will not maintain “status” with a global airline, but I am choosing instead to help grow an airline that places the human experience first. We face tough choices each day, and the occasional heart-rending decision path. This simply is not one of them. Congratulations, Virgin America – my 200,000 miles (plus) per year are yours.

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Photo used without permission from http://www.firsttofly.org/Information/Homework/wright_photos.htm

"Modern" airline seating

I read the other day about how airlines are having trouble capturing and keeping business travelers. Airline travel represents even more of a buyer’s market than in previous years, according to media reports. Being a Premier Executive flyer on United (a lofty title until you consider the titles “above” me, and I’m still not permitted to use that coveted ‘red carpet’), I thought I would call United and discuss my upcoming business. I observe that while I am a Premier Executive, I almost never get upgraded in cross-country flights. There are simply higher classes of frequent flier who get in line ahead of me. Now, I think this is completely fair – the people who are flying 100,000 miles a year are entitled to ‘dibs’ on seats and service that respect the human condition. However, if this is a buyer’s market, perhaps it is time to review the relationship. This review is also based on some new personal circumstances discussed below.

What do I get as a Premier Executive?

1) The regular economy seats in United provide a profoundly inhumane experience, but are required in order to create an additional class: Economy Plus. You cannot have Economy Plus without Economy. One must provide steerage class seating in order to prod you into an impulse buy, hoping to avoid lower limb thrombosis. As a Premier Executive, I can reserve Economy Plus seats for no cost and in advance. Check!

Buttock View Section

2) While I cannot use the Red Carpet entry (reserved for 1st, business class, Global Services, 1K members), I get to board ahead of Seating Area 1 (think on that for a second: every flight has reasonable people confused that the number one on their ticket does not mean they board first). Why does this matter? Because of the consistently “limited overhead storage” that leads to some unfortunates being forced to check their carry-on luggage – adding 20 minutes to their flight experience on the receiving end in some cases. I don’t have that problem, because I can board first and get my bag into the overhead nearest my seat; a luxury when exiting the aircraft. Check!

So the benefit of being a Premier Executive amounts to this: I get to avoid the miserable flying experience of the people behind me both on line and on the plane. My experience is still mediocre, with no laptop power, no on-demand video, no internet access, uncomfortable armrests, etc. But at least I’m better off than those people back by the lavatories (given the ratio of lavatories to passengers, I call this the Buttock View Section).

Now, I have a new employment situation that will find me on an airplane virtually every week. Since airlines were eager to get business traveler dollars, and I have a lot of business coming up over the next few years, I thought I would engage my current vendor. I offered a modest proposal: Since I would be a higher class flier in a matter of months at my current rate of travel (1k), why not grant me the status now to ensure I continue to procure the services of United for these next few years? Yes, this is unfair to the existing 1K members, and therefore perhaps untenable, but I thought having an idea would help the United rep get creative in her attempt to keep my business. Even if advancing me to 1K early is not “aligned with United policy,” what ideas would she offer to keep my business?

I will spare you the extended phone call, I’m certain you can recreate the experience for yourselves and be fairly accurate. Bottom line: the entire conversation was about their policy. The poor lass was left telling me how important I was to United, while offering absolutely no reason for me to continue buying her product offering. I mentioned the in-flight experience as compared to other airlines – on-demand video on JetBlue and Virgin America, Internet access on Virgin America – and her only response was to talk up the Internet access in the Red Carpet Club. (Two problems there: These clubs are all on the GROUND and membership would cost me over $300/year.)

Personal Preference

My advice to the United Airlines Owners (employees) is this: We have come a long way since Henry Ford was able to offer any color of car, so long as it was black. If you continue to engage your customers by simply repeating your “policy,” and ignoring customer-centric approaches to business, you will lose. You are about to lose me. Does that matter?

For my new job, I commute from DC to San Francisco. If I flew every week, that would be 251,576 miles per year. If every other week, the miles would be 125,788. Currently, I’m flying every week – a pace that will continue for at least the next six months. Yes, I will be a 1K member in a few months – but United’s failure to consider loyalty strategies that are based on something other than schadenfreude regarding my unfortunate fellow travelers is a potentially fatal flaw.

For all other airlines: Does anyone out there need a frequent flier? I have approximately 200k miles per year for the winning conversation. You may reach me in the comments section below.