Indiana Bankruptcy Information

By way of offering Indiana bankruptcy information, I comment on the news. One part of President Obama's stimulus package was meant to provide strong medicine when it comes to medical debt, but the stimulus benefit doesn't apply in all cases. The American Recovery and Reinvestment Tax Act of 2009, signed into law February 17, has a lot to say about COBRA.  Since medical expenses constitute one of the three leading causes of bankruptcy, I make every effort to stay current on news about medical costs and medical insurance, in order to provide the most up to date advice to my Indiana bankruptcy clients.

COBRA is an acronym standing for Consolidated Omnibus Budget Reconciliation Act, which is a law about health insurance through employers. COBRA requires employers to offer employees who have been laid off the option of continuing health insurance for up to 18 months. COBRA applies to all employers with 20 or more employees (even if layoffs have reduced the number, COBRA still applies if the company had 20 or more on at least half its business days during the preceding calendar year). The problem is that, according to national nonprofit organization Families USA, the average monthly cost for family COBRA coverage is $1000, beyond the means of individuals who have lost their employment. 

The new Act offers a subsidy to help fund the cost of COBRA health insurance premiums. This subsidy is paid by the employer who is then reimbursed by the government. The original subsidy was 65% of premium costs.  Then a Trade Adjustment Assistance Health Coverage Improvement Act raised the amount to 85%.

A different sort of question arose about retirees whose former employer filed bankruptcy - are those retirees eligible for COBRA benefits? The answer was determined back in 1986, and that answer is "yes".  If an employer declares Chapter 11 bankruptcy, qualified retiree beneficiaries will be covered under COBRA.

Medical bankruptcies are on the rise.  What I see every day is Indiana families who are finding it extremely difficult to keep up with debt payments, expenses, and health costs. Meanwhile, medical providers are becoming less flexible about payment plans and turning over delinquent accounts to aggressive debt collection agencies. "Can You Cope Without Health Insurance?" asks Roxanne Hawn of Bankrate.com. 

My sincere hope is that, with the new SCHIP benefit for children and the COBRA subsidy under the American Recovery and Reinvestment Tax Act of 2009,  there will be more people who won't have to!