Americans laid off during the pandemic can now wait an extra two months to sign up for COBRA health insurance without losing eligibility for the costly plan or facing fines
- Under COBRA, Americans who are laid off or furloughed have 60 days to decide whether or not to keep their employers’ health insurance coverage
- With a new rule change, former workers will have 120 days starting from whenever the coronavirus national emergency in the US is declared over
- COBRA has been spurred by many people due to its limitations such as enrollees having to pay 102% of the premium
- However, it could prevent former employees from paying health costs out of pocket or having to find new doctors
Americans who were laid off or furloughed due to the coronavirus shutdown now have more time to decide if they want to stay covered by their former employers’ insurance.
Under a federal law known as COBRA (Consolidated Omnibus Budget Reconciliation), people who lose their jobs have two months to determine whether or not to keep the health insurance they were receiving from work.
The new rule, however, extends the time period and gives someone 120 days – or four months – to decide if they want to receive coverage through COBRA.
This timeline begins 60 days after the COVID-19 national emergency is declared to be over and an additional 60 days thereafter.
With a new rule change to the law COBRA, former workers will have 120 days starting from whenever the coronavirus national emergency in the US is declared over to choose to keep employes’ insurance or not. Pictured: Vickie Gregorio with the Heartland Workforce Solutions talks to a jobseeker outside the workforce office in Omaha, Nebraska, July 15
For example, if someone is laid off on July 1 and the national emergency ends on September 1, that person has 120 days to decide if they want to keep their insurance.
The first 60 days would give that person until October 31, and then would give them 60 more days to make an ultimate decision by December 31.
This allows people out of work to save money by putting off buying health insurance without losing the option to sign up for COBRA altogether in the time frame or paying fines for not having insurance under the Affordable Care Act.
However, there are limitations to the law that some experts say don’t make the change all that useful.
Only Americans who were laid off or furloughed from companies with 20 or more employees and had coverage before they lost their jobs qualify.
Those who worked for companies with fewer than 19 employees, are self-employed or didn’t have insurance beforehand do not meet the requirements.
Additionally, if someone chooses COBRA, they have to pay 102 percent of the premium – their share, their former employer’s share, and a two percent administrative fee.
For most who are out of work, it’s a high cost that is not feasible.
In 2017, during which 11.5 million people were unemployed, approximately 130,000 signed up for COBRA, just more than one percent, a report found.
‘For ideological reasons, this administration can’t do anything to expand on the Affordable Care Act’s safety net,’ Dr Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy, told Kaiser Health News.
‘So they’re using these other vehicles. But it’s really a fig leaf. It doesn’t do much to actually help people.’
However, there are some benefits to choosing COBRA.
A study earlier this month from the non-profit Employee Benefit Research Institute found that those covered under COBRA use 300 percent more health services than people currently employed.
Researchers found that full-time employees used an average of $6,724 in health care services in 2018 but COBRA beneficiaries used an average of $18,752.
This means that high-costs won’t be entirely paid for out of pocket by someone uninsured.
Additionally, people who are covered don’t have to pay a new deductible or find new physicians and hospitals covered by their provider.