Laid-off workers don’t get COBRA

Adventist Health Systems is not offering extended medical benefits under COBRA to an estimated 100-plus employees laid off from now-defunct South Coast Medical Center, claiming the organization is exempt from the federal law because of its affiliation with the Seventh-Day Adventist Church.

Instead of obtaining 18 months of coverage, subsidized by the federal government under the 2009 stimulus plan, former employees were offered in-house health coverage that ends after six months — unless the ex-employee is unable to work due to a disability.

COBRA — which stands for Consolidated Omnibus Budget Reconciliation Act of 1985 — is a federal law that requires most employers to provide access to group health insurance for employees who are laid off or otherwise lose their company-paid health benefits. The ex-employees pay for the insurance.

“We are designated as a church plan and never dealt with COBRA,” said Kathleen Wilson, corporate director of Benefits for Adventist Health, which is in Roseville.

Adventist officials acknowledge, however, that COBRA had been listed in the employee handbook despite the alleged exemption from the law. Adventist took over South Coast Medical Center in 1998.

COBRA was offered under the hospital’s previous ownership.

“It’s not clear why it was left in the handbook” after Adventist took over, Adventist spokeswoman Alicia Gonzalez said.

Mary Nobriga, a transportation employee whose job ended Tuesday when the hospital was turned over to Mission Hospital, said she was stunned when told that COBRA would not be offered. Nobriga has worked for the hospital for more than three years.

Nobriga said employees were confused at a meeting held in May 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.”

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.