Early buyout/Insurance/baby

bcrawfo2October 2, 2007

My wife is about 5 months pregnant (due Jan 31st) and fed up with her job. She can't make it til mid January for maternity leave to start. Her company (about 20000 employees) is about to announce early buyouts (offers estimated to arrive mid October). The terms are believed to be about 3 months pay. One question...do these buyouts usually include insurance for this term? The reason for asking this...her insurance is EXCELLENT...mine is terrible (but a very good salary). Her insurance is so good..they pay up to $40k for in-vitro fertilization we had to use. Mine would pay zero for that. I expect delivery of a baby would have a substantial cost difference as well.

If buyouts usually include insurance, I calculate the 3 months being a few weeks short of due date. Are buyouts usually negotiable? Could she push for 4 months or something?

Also...I don't know much about COBRA. Would COBRA from her company be the same coverage as what she has today? I'm wondering if paying for COBRA at her old employer would be better than paying additional at my employer to add her (at least for baby delivery).

Any thoughts, comments, opinions appreciated.

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There's a lot of info on COBRA with good FAQs on the internet. If your wife accepts the buy out, she will be given the opportunity to pay for the COBRA coverage for, I think, 18 months - and that should provide the same levels of coverage for her that she's had thus far.

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires most employers with group health plans to offer employees the opportunity to continue temporarily their group health care coverage under their employer's plan if their coverage otherwise would cease due to termination, layoff, or other change in employment status (referred to as "qualifying events").

A child who is "born to or placed for adoption with the covered employee during the period of continuation coverage under [Code §490B, the Code's COBRA provisions]" is also a qualified beneficiary regardless of whether the qualifying event occurred before, on, or after such date if they are enrolled within 30 days of birth or adoption.

I'm not sure much of anything is negotiable in a buyout situation unless you're classified as essential personnel. If one isn't considered essential, being offered a buyout means - forgive me for being blunt - they really, really want you to accept it and to be gone. Trying to hold out just delays the inevitable and they may well cut jobs anyway and send people packing with zero.

If I were you, I'd talk to the benefits people at your place of employment since I'd imagine you'll be going to the family plan on your health insurance once COBRA is exhausted.

    Bookmark   October 3, 2007 at 1:15AM
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When your wife gets the written buyout offer, have it reviewed by your lawyer and/or accountant to make sure all is on the up and up and as this buyout will most likely impact your taxes.

I'd suggest that your wife will definitely be offerred some amount of money and COBRA (legally, they have to offer COBRA). If she pays the premiums for up to the 18 mos. mentioned, she'll have the same coverage as today. Some companiies, when letting people go, include in the cash payment to the employee an amount that, in effect, covers the monthly cost of COBRA for some number of months.

Your wife may be eligible to try and negotiate a better deal for herself but duluth is right about essential vs. non-essential. She may have good footing for that, particularly because she's now pregnant. The company won't want any hassle over the implications of letting a pregnant woman go.

Hope the pregnancy is smooth.

    Bookmark   October 3, 2007 at 6:16AM
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I know there are people with legal backgrounds who contribute to these forums as well as those who have, no doubt, gone through downsizings and buyouts. I really would be curious about being successful in negotiating. If pregnancy would be regarded as a possible bargaining chip, the same thought might be extended to the employee with a chronic illness, disabled child or spouse, an employee with only months to go before retirement.

In today's business climate, the health of the company's bottom line takes precedence. The discrimination card doesn't come into play here - in light of the facts given - and one might find themselves swimming upstream against a pretty swift current.

    Bookmark   October 3, 2007 at 11:15AM
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Be aware your COBRA premiums costs will be high. They are offered at 102% of what the employer pays. In almost no cases is the employee paying even half what the employer's actual cost is.

However, if your wife's coverage is that much better than yours, it may be worth taking advantage of the COBRA option for as long as you can afford it.

Once when I was laid off, the company offered to pay half the COBRA costs for any employees that wanted to use it, but I think that was an unusual offer by an exceptionally caring senior management. It isn't common.

    Bookmark   October 3, 2007 at 11:11PM
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I would anticiapte that your wife's covereage for your family under COBRA would cost on the order of $1,000 per month.

    Bookmark   October 4, 2007 at 8:15PM
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An update. Additional info about the buyout came out. It's three months pay with six months of paid insurance. Unfortunately, this won't be available for about four months, so it won't do us any good.
My wife spoke to her manager again and I think they've found a way to make her job livable until maternity leave kicks in.
Lastly...I checked with my insurance company. The cost for the whole hospital visit is a flat $250. I'm sure there will some stuff that's extra, but it'll cover most. Shocking. My copay for an outpatient nasal surgery was $300. The office lady at the surgery center checked twice because she'd never seen such a high co-pay.

Thanks for your input.

    Bookmark   October 4, 2007 at 9:15PM
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