Licensed? Cut hours? You can benefit from free COBRA health insurance
Hello. I’m Madalyn Amato, replacing Rachel Schnalzer to bring you the weekly LA Times Business newsletter. Some benefits of the federal stimulus package passed last month are supposed to come into effect automatically. But if you want to access this one, you have to act – the sooner the better.
Under a provision of the American Rescue Plan Act that came into effect on April 1, Americans who have lost their jobs in the past 18 months can stay or join their former employer’s health care plan for free until September 30.
More than 2 million people could benefit from it, according to the Congressional Budget Office.
The way it works is through the federally administered program known as COBRA. If you work in a company with more than 20 employees and you lose your job, you can stay on your employer-sponsored health insurance plan for 18 months through COBRA.
But under normal circumstances, COBRA can be much more expensive than employer sponsored insurance because instead of your employer covering part of the premium, you foot the bill. COBRA costs include your plan’s premium plus a 2% administration fee, which means this year you could have considered spending $ 635 a month if you’re single or $ 1,800 for a family, according to Thomas Rice. , professor of health policy and management at the Fielding School of Public Health at UCLA.
But COBRA is now free until the end of September. Here’s what you need to know.
Who qualifies: Eligibility criteria for COBRA include one of the following: “voluntary or involuntary loss of employment, reduction in hours worked, transition between jobs, death, divorce and other life events,” according to the US Department of Job.
Under the relief bill, any eligible person who has involuntarily lost their job or health insurance or had their hours reduced in the past 18 months. A reduction in hours covers the change of business hours, the change from full-time to part-time status, if you take temporary leave or if you have participated in a legal strike.
Benefits are available to everyone who is normally insurable under COBRA, that is, you and your family members who were already covered by your health insurance plan.
Who is not eligible: Anyone who voluntarily left his job or chose to reduce his working hours. Additionally, if you have been terminated for serious misconduct, you and your dependents are not eligible for COBRA.
If you already have health insurance, either from the government or from your employer, you are not eligible to enroll in the subsidized COBRA.
In addition, beneficiaries who have recently turned 26 (the age limit for dependents to remain on their parents’ health insurance) and former spouses who have lost their coverage due to divorce will not be able to receive free COBRA benefits but can expect lower costs “on market health insurance coverage thanks to the provisions of the American Rescue Plan Act of 2021,” according to the Department of Labor.
How to register : Typically, employers have 60 days to notify you of your COBRA eligibility.
If you are newly eligible under the relief bill, your employer is required to notify you by May 31, said Grant Vaught, a spokesperson for the Department of Labor. If your employer or the group health insurance plan you were a part of does not notify you, the Department of Labor recommends that you contact your employer to request information about your eligibility.
If your employer waits until the May 31 deadline to notify you, you could miss two months of free coverage. So Rice from UCLA said you should contact your former employer as soon as possible to avoid losing benefits. If you are not in a hurry, you have until July 30 to register.
For people already enrolled in a COBRA plan, the subsidized premiums were to start April 1 and end September 30. However, the provision does not extend the life of your policy beyond the normal 18 months.
In California, if your employer has two to 19 employees, you may be covered by Cal-COBRA. Cal-COBRA may also be able to extend your coverage if your federal COBRA plan has expired. To learn more, visit the state’s Department of Managed Health Care website.
Other things you should know: Although the grant covers the premium for the Medicare plan, you will still be responsible for quotas and deductibles.
If you sign up for subsidized COBRA, you can keep it after September 30, but you will have to pay the premiums after this date. After the grant period ends, you may become eligible for Medicaid or coverage through the health insurance market, according to the Department of Labor.
Coverage under the subsidized COBRA is not retroactive. If you were insured by COBRA before April 1, medical expenses and premiums incurred before that date are non-refundable, according to the Ministry of Labor.
If at any time between April 1 and September 30 you paid COBRA in full but were eligible for free coverage, you may be entitled to a refund or credit. Contact the plan administrator or the employer sponsoring the plan.
If you do not qualify or cannot afford COBRA, you may have other options.
◆ Affordable Care Act market plans may be cheaper than COBRA. health care.gov; (800) 318-2596.
◆ California residents can use Covered California, the state’s affordable care market. couvertureca.com; (800) 300-1506.
◆ Insurance benefits only for children may be available. insurekidsnow.gov; (877) 543-7669.
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One more thing
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Have a question about work, business, or finance during the COVID-19 pandemic, or coping tips you’d like to share? Email us at [email protected], and we can include it in a future newsletter.