Fidelity Investments and the Mysterious Reversal of Our COBRA Subsidy

It's a mystery all right, except Philip Marlowe isn't here to crack-wise and solve the case.  And Fidelity is offering no explanation as to why this happened.  For the full story of how we got to COBRA, click here. It's an interesting tale.

What is the CORBRA subsidy?

Under the new plan—part of the stimulus package passed earlier this year—people who lose their jobs, but qualify to keep coverage under federal law commonly known as COBRA, may be eligible for a subsidy that pays 65% of their premium for a few months. The worker pays 35%. Then the employer covers the rest and receives reimbursement from the government through a payroll tax credit.

We had the COBRA subsidy as we are, thankfully, eligible for it and it is a welcome relief.  The COBRA subsidy makes a huge difference in keeping us protected without fear of going into serious, out-of-control debt.

But we found out via an invoice from Fidelity that it had been taken away.  Nothing has changed on our end.  And we were eligible in the first place because the first COBRA invoice from Fidelity reflected the subsidy--and the HR woman who handled the separation told Paul he qualified. 

Paul calls up Fidelity to find out why it was reversed.  Two separate HR phone reps could not answer other than to say it was reversed and you have to appeal to the Department of Labor.  Paul pushed for an inquiry as to why it was reversed.  You know, tell us.  Give us a reason so we know what we can do.    

He got an email response yesterday.  See below.  Said he was not eligible.  But he is--as he qualified and was given the subsidy in the first place.  And we do meet all the requirements.

He tried one more time today to find out why and if they can reverse the reverse.  Guess what he was told today by HR?

"You are eligible.  Someone flipped the switch in the system and it can't be undone.  Sorry.  You'll have to appeal to the Department of Labor."

Flipped a switch?  We're talking about our lives and we get that for an answer.  Seriously.  That's the best they can come up with.  What do you do with that--we don't have enough issues to deal with as a family now we've got to go through an appeals process?  Thanks Fidelity, large, unfeeling corporation.

So what is it?  Fidelity can't afford to pay the 65% (doubtful) or are they just unwilling to do so?  And why would they be unwilling?  With the COBRA subsidy ending December 31, 2009, Fidelity gets away without having to deal with the paperwork and the claim payments by shoving us off as "ineligible."  Another fine example of lack of corporate integrity. Or maybe they just hate my blog. 

Dear PAUL PAEZ,

Thank you for contacting Fidelity.  We have resolved your recent Health & Insurance service request, referenced above.

To view the resolution in your Secure Message Center, click the link below (to keep your information secure, you will be prompted to log in). We look forward to servicing you in the future.  If you have any questions, please contact your HR Solutions.

Sincerely,

HR Solutions

This is in response to your recent inquiry. The following is a summary of the issue and the resolution.

You contacted The Benefits Center to update our records with COBRA subsidy information.

We have reviewed your request and determined that as per our records you are not showing eligible for COBRA subsidy. Therefore you can contact department of labor regarding the subsidy.

You can review your current coverage on the Health and Insurance tab of NetBenefits. Please refer to "What to do When" in the Life Events section for eligibility criteria.

If you require additional information please call The Fidelity HR Solutions at 800-835-5099, option 3, weekdays from 8:30 a.m. to 8:00 p.m. Eastern time.The Fidelity HR Solutions

This response is not intended to be construed to create a contract between your employer, and any one of your employer's employees or former employees. In the event that the content of this communication or any oral representations made by any person regarding the plan conflict with or are inconsistent with the provisions of the plan document, the provisions of the plan document are controlling. Your employer reserves the right to amend, modify, suspend, replace or terminate any of its plans, policies or programs, in whole or in part, including any level or form of coverage by appropriate company action, without your consent or concurrence. Fidelity will not be liable to you or anyone else for any consequential, incidental, special or indirect damages that may result from the information provided. This is true even if Fidelity has been advised of the possibility of such damages or losses.