I hope this is the right place to ask this, but if not let me know and I'll go away.
About 6 months ago I left a W-2 position to do independent consulting. Since then, I have been using my previous employer's COBRA plan. It's very expensive, and so I have been looking at other options.
However, I just received a letter from the COBRA management company yesterday (4/26) that says that my premiums were increased a significant amount (35%), and that not only do I have to pay the increased premium amount for the upcoming month, but that the premium was actually increased 2 months ago and nobody told me, and that I need to pay the remaining balance by 4/30 (yes, 4 days notice). This means that I am expected to produce twice as much as I was originally told, and I was only given a few days notice, otherwise they will terminate my coverage on 5/1.
I talked to the COBRA provider, and they said that there was nothing they could do. They said that they only just found out about the increase as well, and that this happens often because the insurance company is allowed up to 60-days after the fact to notify them of the increase. They said that there was nothing they could do about it, that they were following the law to the letter, and that the law does not allow them to continue my coverage if there is a balance, even though I was not given and proper notice.
If I had been given notice of this in advance, I would have found other coverage and terminated the COBRA coverage as soon as possible. However, I was not aware, and I continued to pay the agreed upon price, with the reasonable expectation that my insurance was in good standing.
Are they really allowed to do this? Are they lying to me to cover their own tails? It's obviously not fair that I this bill for more than double my original premium dropped in my lap with a few days notice, and the customer support person agreed that it wasn't fair, but he said that I had no recourse. I could either pay or my coverage will be terminated period.
This seems like it could be a common scenario. Has anyone run into this before and could offer any advice? Should I get a lawyer?