There are some shortcomings in COBRA free health insurance for the unemployed. Here’s what you need to know

Linda, a California attorney who was fired from her job in January, is like millions of other pandemics living without health insurance.

However, it noted that the government would fully subsidize its COBRA health insurance premiums from April to September thanks to a provision in the latest stimulus package. She immediately contacted her insurer to sign up. Linda (asking not to use her full name) was dying to see a doctor after contracting a painful urinary tract infection this month that she feared could spread to her kidneys.

The rules in the $ 1.9 trillion relief bill passed in March seemed pretty simple: the government would pay for people’s COBRA rewards for six months starting April 1. COBRA, or the Consolidated Omnibus Budget Reconciliation Act, usually allows people who leave a company with 20 or more employees to stay on their employment insurance if they can pay both their portion of the premium and what their employer previously paid.

Of course, many newly unemployed people cannot afford it, but this provision in the stimulus package aims to change that by cutting people’s monthly insurance premiums entirely for six months.

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When Linda emailed her former insurer in April asking if she could see a doctor for treatment for her infection, she was surprised that the government grant was not yet available.

“”[F]Orms and processes have not yet been provided or finalized by the IRS or DOL, “according to the email from CNBC.” Until we are notified otherwise, we have to work as “business as usual”. “

“It’s frustrating to say the least,” said Linda, who fears she will have to go to the emergency room and run into debt because of her infection. She also had to stop taking her anxiety and depression medication because of the cost.

Healthcare advocates fear many other people could run into similar problems trying to access the COBRA temporary subsidy, which began on April 1, according to the U.S. Department of Labor.

To get the new system up and running, several government agencies, companies and insurers need to be coordinated. In the meantime, employers don’t even have to notify those who might be eligible by the end of May.

“It’s available for such a short time and you won’t find out about it until May 31st?” said Sabrina Corlette, co-director of the Center for Health Insurance Reforms at the McCourt School of Public Policy at Georgetown University. “Lots of people may be missing out on the opportunity.”

The Ministry of Labor did not respond to a request for comment.

As the new subsidy comes in, we know the following.

What if my insurer says they can’t offer the grant yet?

The good news is that even if you are unable to enroll for a few weeks or months due to operational delays and you qualify for the COBRA grant, any eligible claims made after April 1st (and before the end of September) , should be covered, say experts.

But do expect that you will have to put in some work to sort this out.

Be sure to save all of your medical records during this time, said Caitlin Donovan, a spokeswoman for the Patient Advocate Foundation, a nonprofit that makes it easier for patients to access and pay for health care.

“Keep a folder with all papers, checks, and receipts,” Donovan said.

This will make it easier for you to submit claims or invoices to your insurer after the grant comes into effect, or to have the costs that you have determined and which are subject to insurance reimbursed.

If you are concerned about upfront costs, try explaining to your doctors that you are waiting for your COBRA coverage to go into effect and ask if they can wait to bill your insurer, experts say.

Who is eligible for the grant?

You’re eligible if you’ve involuntarily quit a job offering health insurance and you don’t qualify for another employer plan or Medicare, Donovan said.

“You would even qualify if you turned down COBRA beforehand,” Donovan said.

All family members on your plan would also be fully insured. If you still have a job but your hours have been cut so much that you have lost access to your company’s health insurance, you can also qualify for the six-month grant.

You should receive written notification of your eligibility, likely from your employer or your health insurance company. If you haven’t heard, contact your former insurer.

How does the grant change my costs?

How long does the subsidy last?

The grant runs until September 30, 2021.

Typically, you can’t be with COBRA for more than 18 months, so some people may be cut off earlier than this point depending on when they started reporting.

What if I have already declined COBRA coverage?

Do not worry. It is not too late for you to take advantage of this relief.

Dismissed employees must generally register with COBRA within 60 days of the end of their employment relationship. But even if, for example, you turned down coverage in August 2020 because the premiums were too high, you can now re-enroll and enroll, according to the Georgetown University Health Policy Institute.

Please note, however, that you must register within 60 days of receiving notification of your eligibility for COBRA.

Do I have to pay for months if I was not insured with COBRA?

If you do not sign up for COBRA right away and do so later, you will usually have to repay the premiums as you are not allowed to have a coverage gap.

The relief bill temporarily changes this policy.

According to the experts at Georgetown, you would not have to repay the awards by the date you were originally eligible to register with COBRA.

However, you are only insured for claims from April 1st.

When does reporting by COBRA make sense?

Typically the biggest downside to COBRA is the cost of laid-off workers, which can be thousands of dollars a month. The relief law removes this hurdle at least until September.

One of the main advantages of COBRA is that you can keep your current doctors and health care providers. If you’ve already met your deductible for the year, maintaining your job insurance could be even cheaper compared to other plans, experts say.

Other insurance options for the unemployed include Medicaid and purchasing a plan on the Affordable Care Act market.

Medicaid can be useful if you expect your financial problems to persist and you will not receive monthly rewards either.

Meanwhile, following changes in the recent stimulus package, some unemployed Americans may qualify for a free marketplace plan for the ACA or Obamacare exchange. For example, if you got any unemployment insurance at all during the year, you can qualify for a free silver plan.

Not only do you not have to pay a premium, but your out-of-pocket expenses can also be minimal.

“As a result, a marketplace plan may be a better deal for you,” said Edwin Park, research professor at Georgetown University’s McCourt School of Public Policy.

What options will I have when I sign up for COBRA at the end of September?

Unfortunately, there is still no good answer to this.

At this time, the government has not announced that it will offer a special enrollment period to those eligible for the COBRA grant at the end of September, except in tight circumstances. (Special enrollment deadlines allow people to enroll in the health insurance market outside the normal window.)

Elected officials wrote to U.S. Secretary of Health and Human Services Xavier Becerra this month asking him to set a special enrollment deadline when the grant expires.

If one is not established, they warn, “This will leave a realistic option for many consumers to find affordable coverage until the open sign-up period for plans starting in 2022.”

Are you having trouble accessing the new COBRA subsidy? Please send me an email at [email protected]

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