Linda, a California attorney who was fired from her job in January, is like millions of others in the pandemic living without health insurance.
But she found that the government would subsidize her COBRA health insurance premiums in full from April to September, thanks to a provision in the latest stimulus package. She immediately contacted her insurer to sign up. Linda (she asked if she couldn’t use her full name) was eager to see the doctor after contracting a painful urinary tract infection this month, which she feared would spread to her kidneys.
The rules in the $ 1.9 trillion emergency relief bill passed in March seemed simple enough: The government would pay people’s COBRA bounties for six months from April 1. COBRA, or the Consolidated Omnibus Budget Reconciliation Act, typically allows people who leave a company with 20 or more employees to stay on their workplace insurance plan if they can pay both their share of the premium and the share their employer previously paid.
Of course, many new unemployed cannot afford it, but this provision in the stimulus package aims to change that by completely cutting people’s monthly insurance premiums for six months.
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But when Linda sent an email to her previous insurer in April asking if she was free to see a doctor for treatment for her infection, she was surprised to learn that the government subsidy is not yet available.
[F]Orms and trials have not yet been provided or finalized by the IRS or DOL, “she was told, according to the email seen by CNBC.” Until stated otherwise, we must act as ‘business as usual’. “
“It’s frustrating to say the least,” said Linda, worried that she will have to go to the emergency room and go into debt for her infection. She also had to stop taking her medications for anxiety and depression because of the high cost.
Health care advocates are concerned that many other people could run into similar problems as they try to access the temporary COBRA grant, which began on April 1, according to the United States Department of Labor.
To get the new system operational, coordination is required between multiple government agencies, companies and insurers. Meanwhile, employers don’t even have to notify those who could qualify until the end of May.
“It’s available for such a short time, and you don’t learn about it until May 31?” said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy. “Many people will miss the opportunity.”
The Department of Labor did not respond to a request for comment.
As the new grant rolls out, here’s what we know.
What should I do if my insurer says it cannot offer the subsidy yet?
The good news is, even if you are unable to apply for a few weeks or months due to operational delays, if you are eligible for the COBRA grant, all eligible claims submitted after April 1 (and before the end of September) , should be covered, experts say.
But expect to have to do some work to fix this.
Keep all of your medical records during this time, said Caitlin Donovan, a spokeswoman for the Patient Advocate Foundation, a nonprofit that helps patients access and afford health care.
“Keep a folder with all the paperwork you get, all the checks you write, and ask for receipts,” Donovan said.
Doing this will make it easier for you to file claims or bills with your insurer once the subsidy is in effect, or to be reimbursed for any expenses you have incurred that qualify for coverage.
If you’re concerned about upfront costs, try to explain to your doctors that you’re waiting for your COBRA coverage and ask if they can wait to bill your insurer, experts say.
Who is eligible for the grant?
You qualify if you involuntarily left a job that offered health insurance and you don’t qualify for another employer plan or Medicare, Donovan said.
“You would even qualify if you had rejected COBRA earlier,” Donovan said.
Any family members on your plan are also fully covered. If you’re still in your job, but your hours have been shortened to the point where you no longer have access to your company’s health insurance, you may also qualify for the six-month grant.
You should receive written notice that you are eligible, likely from your employer or health care provider. If you haven’t heard from, contact your former insurer.
How does the subsidy change my costs?
How long does the subsidy last?
The grant will run until September 30, 2021.
Typically, you can’t be on COBRA for more than 18 months in total, so some people may be cut earlier than that date depending on when they started their coverage.
What if I have already declined COBRA coverage?
Do not you worry. It is not too late to take advantage of this relief.
Redundant employees must usually register with COBRA within 60 days of termination of employment. But even if, say, you declined coverage in August 2020 because premiums were too high, you can now go back and enroll, according to the Georgetown University Health Policy Institute.
However, keep in mind that you must apply within 60 days once you have been notified that you are eligible for COBRA.
Do I have to pay for months that I was not insured via COBRA?
If you do not register with COBRA immediately and decide to do so later, you usually have to pay premiums because you should not have a collateral deficit.
The lump sum payment temporarily changes that policy.
According to Georgetown’s experts, you don’t have to pay back premiums until the date you were originally eligible to enroll in COBRA.
However, you are not covered for claims until April 1.
When is COBRA coverage useful?
The main drawback of COBRA is usually the cost to laid off workers, which can reach thousands of dollars per month. The Relief Act removes that obstacle, at least up to and including September.
One of the main benefits of COBRA is that you can keep your current doctors and healthcare providers. If you’ve already met your deductible for the year, maintaining your workplace insurance can be even more affordable compared to other plans, experts say.
Other insurance options for the unemployed include Medicaid and shopping for a plan on the Affordable Care Act marketplace.
Medicaid can make sense if you expect your financial troubles to last and also leave you with no monthly premiums.
Meanwhile, some unemployed Americans may qualify for a free market plan on the ACA or Obamacare stock market, following changes made to the most recent stimulus package. For example, if you took out unemployment insurance at all during the year, you may 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, a research professor at Georgetown University McCourt School of Public Policy.
If I sign up for COBRA, what are my options at the end of September?
Unfortunately, there is no good answer to this yet.
Currently, the government has not said it will offer people benefiting from the COBRA grant a special enrollment period in late September, except in limited circumstances. (Special subscription periods allow people to sign up for health insurance outside of the normal marketplace window.)
Elected officials wrote a letter this month to Xavier Becerra, Secretary of the United States Department of Health and Human Services, requesting that a special enrollment period be created when the grant ends.
If none is established, they warn, “many consumers won’t have a realistic option to find affordable coverage until the open enrollment period for plans starting in 2022.”
Are you encountering difficulties in gaining access to the new COBRA grant? Send me an email at [email protected]