Hundreds of former workers at the failed IndyMac Bank and IndyMac Resources will get a one-month extension on their COBRA health insurance coverage.
The former workers, including nearly 400 in Orange County, 
received letters from the Federal Deposit Insurance Corp. last week saying their health, dental, vision and other insurance benefits would end this Sunday, May 31.
The FDIC, which oversees failed banks, told the former workers that continued insurance coverage would be available under the agency's FIA plan. The workers, however, were concerned they wouldn't get the paperwork and be able to enroll in time to meet the May 31 deadline. Many feared they would be left with no insurance coverage at least for several weeks.
A new FDIC letter went out May 28 advising the former workers their current benefits will be extended to June 30. During the interim, they will have three choices:
- They can move into the FIA plan, which only provides health coverage but no vision or dental insurance. It costs $590 a month for individuals and $1,113 for families.
- Because the change is considered a "qualifying event," they will be eligible to join a spouse's health plan mid-year without waiting for the annual enrollment period.
- They can seek separate insurance on their own.
Regulators seized Pasadena-based IndyMac Bank last July 11. As a result, 266 IndyMac Bank employees in Irvine were laid off between September and November of last year, according to layoff notices filed with the state. Another 107 at IndyMac Resources workers in Irvine lost their jobs this year.
The FDIC initially reopened the bank as IndyMac Federal Bank. It was sold and all the assets were transferred in March to privately-held OneWest Bank in Pasadena.
Read the FDIC's letter on the IndyMac healthcare benefits extension HERE.
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I'm wondering why the FIA coverage is so expensive? Shucks, I see ads all the time for "affordable" health insurance from Blue Cross/Blue Shield and Kaiser and I thought $300 plus for someone over 60 was high, but these workers are likely much younger on average so private coverage ought to be a lot cheaper. If so, the healthy will go elsewhere and those with pre-existing health conditions who couldn't get coverage elsewhere, would stay.