COBRA Subsidy Help: Introduces COBRA Alternatives Program for Employers

Free Service Provides Affordable Alternatives for Unemployed Eligible for COBRA Subsidy

MOUNTAIN VIEW, CA -- (Marketwire) -- 04/27/09 -- eHealthInsurance has launched a COBRAAlternatives Program for employers struggling to comply with, andimplement, the COBRA subsidy provision in the stimulus package(1). As theleading online source of health insurance for individuals, families andsmall businesses, eHealthInsurance ( has designedthe COBRA Alternatives Program to help employers and HR executives informexiting employees of all of their health insurance options throughout thiscomplex process.

The free program features information on the COBRA subsidy rules,associated COBRA insurancecosts, and resources to identify lower-cost alternatives to COBRA. It alsoincludes consulting, print collateral and resources that can be included inexit packages and COBRA notice communications.

The online portion of the program features a COBRA subsidy calculator, which helpsemployees determine whether or not COBRA alternative plans can save themmoney over subsidized COBRA premiums.

The subsidy is 65 percent of a qualified employee's COBRA insurancepremiums for up to nine months. The up-front costs for the subsidizedportion of the COBRA premiums are paid for by employers. The employer isreimbursed for the subsidy by the Treasury Department through a payroll taxdeduction. But, for many struggling businesses these up-front costs --along with increased COBRA administration fees -- can be difficult toabsorb during these challenging economic times.

"It's safe to assume many people who lose their jobs will simply'auto-enroll' in COBRA because they believe the subsidy makes it their bestoption. But, that's not always the case," said Chris Hakim, director, COBRAsolutions at eHealthInsurance. "It's in the best interest of the employer,and the exiting employee, if they both understand their alternatives toCOBRA, and how they might benefit."

Hakim continues, "Many employees may also assume subsidized COBRA is theirleast-expensive and highest quality option, but that's not always thecase(2)."

When developing exit packages and COBRA notice communications, Hakimencourages employers to focus on how best to help exiting employeesmaximize their savings and unemployment income. Consider these examples ofexiting employees that are eligible for the COBRA subsidy:

Exiting employee #1:Profile: Age 35 - 45Family: Married with two kids but does not have the option to join theirspouse's plan.Health status: Policy holder has some pre-existing health conditions buttheir spouse and children are healthy.

Cost-effective coverage option(3):

--  Primary policy holder: Subsidized COBRA is likely to be the best short-    term option for this type of employee because they're unlikely to qualify    for private health insurance.--  Dependant spouse and children: They're likely to find less expensive    coverage than COBRA -- even with the 65 percent subsidy -- with a private    health insurance plan.    

Important information to make the employee aware of:

--  Time limits on COBRA and the subsidy: There is a 9-month cap on the    subsidy for COBRA and COBRA benefits run out completely after 18 months. If    an employee cannot afford COBRA once the 9-month subsidy runs out, they    need to be made aware of free or low-cost government programs in their    state.--  State high-risk pools: If this employee is able to stay on COBRA once    the 9-month subsidy runs out, they need to be aware of high-risk pools in    their state that may be available to provide them with healthcare once    their 18 months of COBRA runs out.    

Exiting employee #2:Profile: Age 25 - 35Family: SingleHealth status: Policy holder is in moderate to good health.

Cost-effective coverage option(3):

--  Primary policy holder: Private health insurance. The average adult    will pay approximately $390 on COBRA(4) per month, which equates to    approximately $136 per month after the subsidy. Individual health insurance    policies from name-brand carriers can start at around $65(5) per month for    moderately healthy adults.    

Important information to make the employee aware of:

--  Medical Underwriting of Private Health Insurance -- Private health    insurance plans are medically underwritten, which means an employee could    be denied coverage for a health problem they deem not to be too serious.    Employees should not decline COBRA coverage until they're certain they've    been approved for private coverage.--  Plan benefits can vary -- Private health insurance plans give    individuals the option to purchase only those benefits they need. So, for    example, some plans don't cover maternity benefits, which can save money    for women who don't need the benefit.--  Rate increases -- Most employers are aware that health insurance    premiums are subject to annual rate increases. But, employees that have    never purchased their own health insurance should be aware that annual rate    increases do typically occur. Rate increases are approved by state-level    insurance regulators.    

Employers can email requests for information to Freeresources are available in the COBRA Learning Center at include:

-- eHealthInsurance's free webinar on Health InsuranceOptions for the Unemployed -- Register at

-- An updated list of Frequently Asked Questions aboutCOBRA and the subsidy

-- COBRA Eligibility Guidelines-- A COBRA Subsidy Calculator

-- New research on Unemployment and Health Insurance

-- Opinion Research Survey on COBRA Awareness

-- eHealthInsurance's simple list of 6 health insurance options for theuninsured

Footnotes:(1) Refers to the American Recovery and Reinvestment Act (ARRA) of 2009(2) According to the J.D. Power and Associates 2009 National Health    Insurance Plan Study(SM), people who purchased private health insurance    gave it a slightly higher satisfaction rating than those who got    healthcare through a small employer (50 employees or fewer). The cost-effective coverage options listed in this chart are merely a    suggestion based on the hypothetical profile provided. Other factors    should be considered in determining what is the best option for a    particular individual.(4) SOURCE: Families USA Foundation's 2009 report: Squeezed! Caught between    Unemployment Benefits And Health Care Costs:    2009-press-releases/cobra-premiums-for-family.html(5) Calculated using eHealth's COBRA calculator located at

About eHealth, Inc.:

eHealth, Inc. (NASDAQ: EHTH) is the parent company of eHealthInsurance, thenation's leading online source of health insurance for individuals,families and small businesses. Through the company's website,, consumers can get quotes from leadinghealth insurance carriers, compare plans side by side, and apply for andpurchase health insurance. eHealthInsurance offers thousands of healthplans underwritten by more than 180 of the nation's health insurancecompanies. eHealthInsurance is licensed to sell health insurance in all 50states and the District of Columbia. eHealthInsurance and eHealth areregistered trademarks of eHealthInsurance Services, Inc.

For information about individual and family health insurance plans as analternative to COBRA, please contact:

--  A licensed eHealthInsurance agent at 1-800-977-8860--  Or go online to

For information about public programs please contact:

--  The Foundation for Health Coverage Education (FHCE) at 800-234-1317--  Or go to their web site is

For media inquiries, please contact:

Nate Purpura
eHealth, Inc.
(805) 215-3336

Erin Jones
eHealth, Inc.
(805) 440-6587