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.
8 Comments
At the risk of being labeled a flaming conservative (which I’m not, I’m just a small government kind of gal) – this is what happens when the gov’t tries to help. I’m sure they mean well, but this is what you get. What an aggravating day for you! And…I would mention the socialist insurance I’m on (TriCare), works much the same way. So I don’t think Universal Government Healthcare to avoid such issues is the answer either.
I would agree that the companies had no time to adapt their processes to ARRA, fair hit. But I would argue the aggravation above is not a health care or government issue, rather a customer service nightmare. ADP lacks internal communication, effective decision making, or any focus on the consumer in their workflow. The result is an otherwise benign firm behaving as a predatory influence.
I see what you’re saying. And it is in fact a customer service issue. I’m just saying that the gov’t is full of them. And I honestly think its a result of contractor low-balling bids and not getting the best people and infrastructure in place. But I’m just recently on the other side of a contract re-bid, so my point of view is colored.
As it happens, none of this could happen with my healthcare provider. That’s because I am in the land of socialised medicine, where we suffer from excessive healthcare administration, but absolutely no insurance providers and their obstructive call-centres.
John — I can only imagine the frustration. And I agree there are some basic machine-level fixes needed. But I also found myself wondering if your work in complexity theory/complex adaptive systems provides any additional insights into your experience. Obviously the medical care system is complex. If the US is going to get some version of national health insurance, it will get even more complex. I can just see your experience exponentially ranted as we move from the existing patchwork to whatever emerges from efforts to design a national system. I wonder if there are ways to build learning and safe-failing into whatever comes next.
Already being in the federal govt’s mini healthcare system (Tricare) and having read about Medicare, I’m not anywhere near as concerned about situations like John encountered.
The government benefits from having incredibly explicit rules set. Remember, the law for citizens limits what we can do, the law for the govt must explicitly authorize it to perform an action.
Not that corporations don’t set their own internal rules… but many of them must remain nebulous, unwritten. Their goal is to make a profit. Enabling such simple things as cancelations at a low level introduces a lack of revenue flow control. It must be complicated. How many ppl can actually cancel their free 30 day trials of anything with ease? There’s a reason for the process being painful. It may not be written down so plainly stated in a Powerpoint, but that certainly was the intent when they designed the system.
In my experience anyway, as a whole there is good accountability at the lower levels of the federal government. Even some states get a bad rap (the DE DMV, for example, is pretty easy to get through). And assuming the chain breaks down, you’d be surprised how much House Reps love going after unresponsive govt agencies. It makes them look great. As cliche as it may sound, calling your House Rep works. Being in the military may give me a more positive view of this than others (what House Rep doesn’t want to be seen having their Airman/Sailor/Soldier/Marine/Coastie’s back?), but at the very least there is accountability and the rules are plain to see. It may take some work, but at least the rules are there for you to read.
In fact, I had a small issue with the VA recently over the phone where they had to wait 72 hours to do something for me for no explicable reason. It was quite frustrating and very last minute. So I asked “Where’s the policy?” The response? She emailed it to me.
That’s another thing about the government – so long as you’re not dealing with a national security issue, at the lower level I believe there is a general desire to have transparency. In many companies, transparency is the kiss of death and a business model killer.
ADP is notoriously incompetent for their COBRA services (a lot of the call center folks are outsourced in India or somewhere as you can see by their “heartily” comment to you – really, who speaks like that here?). I work in HR and deal with them everyday and they’re horrible. We’ve had former employees with your exact scenario. You really should contact your former HR department and tell them of your problems. The $ will probably need to be reimbursed from them anyways, since ADP forwards the premiums rec’d to them (less the 2% admin fee). Although the 30 day time period is ADP’s policy for refunds, trust me it can be done. We do it every day.
I am in the middle of a very similar situation with ADP. I was assured by not one but two of their CSPs that I would receive a refund of the overpayments I made while waiting to be accepted into the government subsidy program (another snafu by ADP). CSP#1 told me to write a letter requesting the reimbursement. I called about 10 days later and was told by CSP#2 that he had no record of the letter, but would expedite the refund. I received a phone call today saying that if I was canceling my Cobra, to write a letter (which is never what I was requesting, of course). I was told that ADP never provides refunds of overpayments.
I asked to speak with a “supervisor” today, (from India) who promptly disconnected me. When I called the number on my phone, I was told it was no longer in service.
Does anyone know who one might appeal to re this level of sheer incompetence? Does the Federal Government approve who might handle COBRA, or is it my former employer? And, am I just looking for more frustration and let them have the money? (I am still in the COBRA, and my premiums will be paid from the existing balance.)
Thanks.