Laid-off hospital workers won’t get COBRA

Adventist Health is not offering employees laid from jobs at South Coast Medical Center the opportunity to obtain group health insurance under COBRA, the federal law that requires most employers to provide access to group health insurance for employees who are laid off.

Adventist spokeswoman Alicia Gonzalez said the health care firm does not have to provide COBRA because it is a faith-based entity. Adventist Health Systems is affiliated with the Seventh Day Adventist Church.

Employees say that contradicts the employee handbook, in which COBRA is noted as a benefit, according to Mary Nobriga, a transportation employee who’s job will end Tuesday.

COBRA — which stands for Consolidated Omnibus Budget Reconciliation Act of 1985 — allows some terminated employees to extend their health insurance through a self-paid plan.

COBRA insurance can be costly for the unemployed, but under the recent federal Recovery and Reinvestment Act of 2009, those with COBRA coverage pay only 35% of the COBRA premiums.

The remaining 65% is reimbursed to the coverage provider through a tax credit.

That would make COBRA coverage very affordable for her, Nobriga said.

But Nobriga and other employees laid off from their jobs as a result of the sale of SCMC to Mission Health Systems are not being offered the self-insurance plan, and instead are being offered an Adventist health care plan requiring them to visit an Adventist facility for medical treatment and doctor’s visits.

Employees were informed that, as a faith-based organization, the hospital does not have to provide COBRA insurance, Nobriga said.

“As a faith-based organization, they should be more sensitive to people and take care of their employees,” Nobriga said. “It’s very contradictory.”

The Adventist health benefits offered to laid-off workers provide continued coverage for three months, but with services to be obtained at an Adventist facility, Nobriga said. After the three months is over, former employees must pay $400 a month for insurance and continue to use the Adventist facility.

Laguna Beach labor attorney Diana Cimino, who was asked to look into the issue by some of the laid-off workers, said Adventist may be on rocky ground in denying COBRA because the employee handbook she has seen lists COBRA among the benefits.

Cimino said the hospital may have a hard time claiming an exemption as a faith-based organization, because other church-affiliated hospitals she is aware of are not exempt from the federal law. There are many issues at play, she said, such as “How does the Adventist Church interface with the hospital?”

Even if Adventist were exempt from COBRA as a faith-based organization, the fact that COBRA is listed in the handbook would obligate the health care firm to provide it, Cimino said.

Cimino said she doesn’t understand why Adventist would not provide the COBRA option, since the insurance is paid for by the employee, not the company.

“There is an administrative fee [for COBRA],” but no other costs to the company.

And there is a stiff penalty for not offering COBRA coverage — a fine of $110 a day.

Nobriga said employees were confused at a meeting held last month in which they were informed of the post-employment health benefit. “We were told ‘no COBRA,’ but the employee handbook says it in black-and-white,” Nobriga said. “When I talked to HR [human resources] they said to disregard the employee handbook.”

Nobriga, who has high blood pressure, said she is not happy with the prospect of driving 120 miles round trip for routine medical tests and services at Loma Linda Hospital, the closest Adventist facility to her Aliso Viejo home.

Gonzalez said that the coverage offered by Adventist is comparable to COBRA.

“It’s important to note that for three months all full time and part time employees who do not have future employment as of June 30 will continue to get the same health benefits that they have now,” Gonzalez said. “If at the end of that period the person is still unemployed, he or she can continue healthcare coverage for an additional three months at a price that is calculated similar to COBRA.”

As for the employee handbook, Gonzalez said the handbook was printed in 2005 but is altered every year.

“At the beginning of each year, benefits are updated including those involving the employees’ health plan and coverage,” she said. “Employees are regularly told that the latest information pertaining to their health care benefits is available to them through the Summary Plan Description which is revised annually and available on-line or through the Human Resources Department. In addition, HR communicates changes related to benefits in a variety of ways — at an annual Benefits Fair, via house-wide e-mails and town hall-type meetings.”

But Nobriga said that in her three-and-a-half years at the hospital, she has not been made aware of such changes to the handbook. In addition, “New hires were given the same handbook” with the same benefits information as contained in hers, she said.