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+--- Thread: Severance negotiation and COBRA coverage (/showthread.php?tid=266280)
Re: Severance negotiation and COBRA coverage - Will Collier - 04-24-2022
dk62 wrote:
As mentioned by several people, severance is company's good will, or, more commonly, insurance that you will not sue them for wrongful termination (despite the "employment at will" clause in the original employment agreement).
COBRA vs ACA will depend on many things. ACA is going to depend on your annual income and, depending on amount of severance, can be prohibitively expensive. COBRA can as well - it is basically continuation of the coverage that you had so far, but with you also paying the part that the company was paying. In my case, it went from $250 to $2300/month, and was still lower than ACA (my severance was unusually substantial, "voluntary early retirement").
One thing that really upset me - once my new job's insurance kicked in, COBRA became void the very same day, but you do not get any partial month's refund. And they absolutely do not cover anything that happens after the new insurance is active. So they get a lot of money for the last month with no liability. I was actually trying to postpone the start day of my new insurance as COBRA was better, but turns out you cannot do that.
I left a large-ish organization along with my current business partners a couple of years ago, we started up our own thing (actually a handful of small and/or single proprietor companies) in the wake of that. I was able to go on my wife's coverage while my old boss had to make the choice of COBRA or ACA. Having done both now, she strongly recommends getting COBRA while it's an option. She found the premium costs were about the same for her, but the coverage from our former employer had much smaller deductables and she could still get the network discounts from providers.
Re: Severance negotiation and COBRA coverage - Rolando - 04-24-2022
Usually a severance is accompanied by some sort of requirement, such as an NDA or non-compete, or even a forging of Unemployment Insurance Benefits.
Check the fine print
Re: Severance negotiation and COBRA coverage - dk62 - 04-25-2022
Rolando wrote:
Usually a severance is accompanied by some sort of requirement, such as an NDA or non-compete, or even a forging of Unemployment Insurance Benefits.
Check the fine print
While non-competes are sometimes included, they frequently fail in any subsequent court cases in the face of right-to-work laws. They make sense only if the period is limited to what the severance covers. At least that is what I was told by my HR people.
Non-disparagement and non-disclosure are legitimate, and even non-poaching can be tricky but is common, for a defined time period.