Tuesday, September 20, 2011

A couple of answers: COBRA and loans

Below the break, an answer to questions raised on this blog and elsewhere about IEA loans.  Here's a link to some further info on COBRA. By all means read the COBRA stuff for yourself, but it looks to me like the news there is good.

COBRA is expensive.  But if I've read the information properly, one has 105 days to pay for COBRA, and if one needs health care within that time frame, one can pay after the healthcare need and still get covered retroactively (otherwise, of course, the time spans the law offers for employees to elect to sign up and start paying would be rather meaningless). So the logical thing to do would be--assuming one and one's dependents do not have large, regular, recurring health care expenses, which of course is *not* the case for everyone--to attempt to wait out the 105 days without paying the hefty COBRA charge. If a major health care bill arrives, then one would have to pay the COBRA fee, but otherwise one does not. I did something similar back in the day when I was in between academic jobs (over a summer break--though I had a gap of a few weeks were I was vulnerable: but I was young, childless, and single).

What are the timelines, procedures, and standards required by the IEA-NEA in order for individual participation in its interest-free strike loan program?

1)     You must be an enrolled IEA-NEA member at the time of the loan request and remain a member until the loan is repaid [usually a period of six month repayment.]
2)     The local must be on strike at least ten (10) work days and have the likelihood of a missed check (or a check with reduced pay) before an interest-free loan can be provided under this program. The paperwork for the loan is usually processed in such a way that the loan disbursement check would be available at the end of each ten (10) work day period as needed for the duration of the strike.
3)     A loan may not be for more than the “net pay”, i.e., your gross pay minus payroll taxes. So for faculty and grad assistants with monthly paychecks the rule of thumb is ½ of the monthly net pay and for civil service employees it is the bi-weekly net pay.
4)     If the duration of the strike creates a need to make COBRA payments, the COBRA payment amount may be added to a loan request in addition to the net pay standard above.
5)     Individuals must sign the IEA-NEA loan agreement document as well as any loan documents that may be required by the lending institution.
6)     A copy of your latest pay stub is needed to substantiate the amount of the loan.
7)     More detailed information about specific timelines and paperwork related to loans will be provided by your local Strike Loan Committee if and when a strike action takes place. This may include information required by the lending institution, if needed.
8)     Only borrow what you absolutely need.


  1. Thanks, Dave. I just posted to FreeU at the same time! Info. moves fast these days.

    I looked up other strike funds and they do have limits. Some unions require votes on anything above what the central fund has in it.

    My quick followup question is: the language speaks of a "loan request" up to net pay plus insurance costs. Can the IEA distribute a lower amount? The UAW, for example, has a constitution with language like the above but in practice they give $200/week for strikes, NOT the full amount. Would the IEA really loan $6-7,000/month for net pay plust insurance(that includes family COBRA at $1,905/month).

  2. So it looks like going on strike will cost each striker a couple a thousand dollars. It'll probably be more like $5,000 before it's all said and done...with COBRA, etc. Good thing the loans will be interest free. And then there's all the paperwork.

    But Dave calls it, "good news." I feel better already.

  3. This is how I (again, not a lawyer, and read the policy yourself) regard COBRA as good news. Assuming the strike doesn't last more than 105 (which I regard as rather likely), I don't have to pay a dime to retain my eligibility for health. If I or one of my dependents gets sick, I can pay the expenses or start paying for COBRA. That's less scary than it could be.

    As to pay, well, yes, of course going on strike means one won't get paid while on strike and won't recoup that pay unless the unions secures such make up pay at the bargaining table.

  4. Thanks, Dave. This information is very helpful to those of us, who support ourselves, but at the same time feel their backs are put up against the wall by an administration that is refusing to be reasonable. Job security is a big deal for those of us who went into this profession, and for a R1 research university (or one that has aspirations of being one/remaining one) to threaten that in a big way is extremely unreasonable.

  5. Unrelated question: FA tells strikers to remove all equipment from offices but what if that equipment is university property? Ditto all the email you have on their server. My understanding is that strikers can't even walk on campus during a strike, right?

  6. To Jonathan Bean,

    The sentence just before the instruction to remove what you need says, "...Make sure you have access to a non-SIUC e-mail and computer." It could have been clearer, but the intent of this question and answer is that you should take all of your personal belongings out of your office. Taking university property off campus without permission could land you into legal trouble even when there's no strike.

    Walking on campus is not a simple question. GAs, for example, have a dual role as students and as workers. Even while on strike, they have a right (assuming they are not violating campus rules) to be on campus as students.

    My completely unvetted, unlawyered plan for myself is to assume that my presence on campus during a strike would have the same restrictions as someone with no affiliation with the university.

  7. Thanks, paranoid. The Friday meeting seemed to suggest we ought to "empty out" our offices but I didn't know what that meant. Some of us do have university equipment inventoried as of use at home. Our secretary requests this information each year.

    As for all personal belongings, THAT is a lot of books and two really big file cabinets. I'll take anything sensitive (if I vote yes on strike). But all those books? Oh, my!

  8. Two questions.

    1. I assumed removing your personal belongings from your office meant take only what you will need for the duration of the strike, not remove ALL personal belongings. Am I wrong about that?

    2. BIG, BIG QUESTION. I am having surgery Sept. 28, and am starting physical and occupational therapies Sept. 21. I will have a doctor's office visit weekly or biweekly for the next few months. So.... I need to go ahead and pay COBRA correct? When and where do I initiate this?

    Thanks to anyone who can answer!

  9. Sorry for using the word "all" above. It's up to you what of your personal belongings you take with you. I plan to take all of my personal belongings out of paranoia that something might happen to them while I'm on strike, but I'm paranoid like that.

  10. Want to be really paranoid? What if they take away your DAWG ID? ; - )

  11. To the big, big, question. You'd need to calculate, I suppose, which is likely to be more expensive, COBRA or paying the doctor's visits out of pocket. You wouldn't need to pay COBRA at once, but my understanding is that if you go on strike and get medical treatment (and the university plays hard ball by dumping your health coverage), you would need to pay eventually cover the time period on which you were on strike. It *might* make sense to just pay the doctor out of pocket for a visit or two, and then initiate COBRA if it looked like the strike would last long enough that COBRA would be less expensive than paying out of pocket. Remember that you have 105 days to pay for COBRA, and would get the COBRA coverage retroactively for any costs incurred during that period.

    At least that's my understanding. Do click on the link at the top of this post for answers that have been vetting by the IEA legal staff. Your courage to plan to strike despite that health issue is praiseworthy, it seems to me.

  12. Anonymous 10:08 PM:

    I wish someone more expert than me had jumped in to answer your second question, but your question has been lingering for a while, so I'll make an effort.

    CMS will notify you--likely by mail after the strike begins--that you are no longer covered. The letter likely will give you a deadline 60 days from the date that it was sent to make your decision about whether to elect coverage. The letter should give the instructions about how to initiate coverage. After you make your election, you will have an additional 45 days to pay your premiums, including the back premiums that built up over that time.

    Because you know that you will have medical bills, you know that you would elect to pay for COBRA if necessary. Then your decision becomes one of timing.

    For a very short strike, the university may maintain continuous coverage, and electing COBRA early would just create unnecessary paperwork for you and confusion for your insurance and medical providers.

    On the other hand, if you wait too long to elect coverage, the first COBRA bill could be enormous, and you could face trouble from a medical provider who is uncertain about whether you have insurance.

    I'm basing this answer on the Strike FAQ and on the COBRA-specific questions from the IEA. If this question is important to you, read those documents rather than relying on a pseudonymous paranoid with no formal legal training.

  13. Oops - Dave and I responded at the same time.

  14. To Dave who answered the big, big question and to Paranoid and Anonymous,

    Thank you so much for your thoughts. I am reading all that I can to determine how to handle this. I am facing up to 3 more surgeries this fall, plus the therapies. (I provide this as explanation for my intense need for information).

    So, Dave, I will do the calculations... I suspect if I had to pay COBRA for even a couple weeks it would be more expensive than a couple doc visits and 10-12 therapy visits. But I will find that out. Thanks for suggesting this.

    And Anonymous and Paranoid, thanks for providing the nuts-and-bolts of how this might unfold. I will go to the links you provided as the timing and compliance of COBRA application is very important in my situation.

    I am voting via absentee ballot given I will be at the doctor's office the day of the vote. I have spoken with a few FA members regarding my situation.... I will vote for the strike and at this point intend to participate in the strike. However, I was advised by one FA member to not strike to avoid any possibility of having to incur unaffordable medical costs.

    I am in my 50's, not quite ready or able to retire, a single mom of two boys, and still trying to teach despite my current but temporary limits. I LOVE teaching but find the current Administrative culture is stressing me to the max.

    WHAT TO DO??

    P.S. No need to answer my rhetorical "What to do?" Just expressing my current apprehension. :)


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