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 discovered that the government would fully subsidize her COBRA health insurance premiums from April to September, thanks to a provision in the latest incentive package. She immediately contacted her insurer to report. Linda (she asked not to use her full name) was eager to go to the doctor after she contracted a painful urinary tract infection this month, which she was afraid of spreading to her kidneys.
The rules in the $ 1.9 billion relief bill passed in March seemed straightforward: the government would pay COBRA premiums for people from April 1 for six months. or more employees should remain on their job insurance plan if they can pay both their share of the premium and the share 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 completely lowering people’s monthly insurance premiums for six months.
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But when Linda emailed her previous insurer in April asking if she was free to go to the doctor for treatment of her infection, she was surprised to hear that the state subsidy was not yet available.
“[F]orms and processes have not yet been provided or finalized by the IRS or DOL, “she was told according to the email seen by CNBC.” Until otherwise notified, we must act as ‘business as usual’. “
“It’s frustrating to say the least,” Linda said, worrying that she would have to go to the emergency room for her infection and incur debt. She also had to stop taking her medication for anxiety and depression because of its cost.
Health advocates are concerned that many other people may have similar problems accessing the temporary COBRA subsidy, which began on April 1, according to the U.S. Department of Labor.
Getting the new system up and running will require coordination between various government agencies, companies and insurers. Meanwhile, employers do not even have to notify those who are eligible until the end of May.
“It’s available for such a short time, and will you only learn about it on May 31st?” says Sabrina Corlette, co-director of the Center for Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy. “A lot of people can miss the opportunity.”
The Department of Labor did not respond to a request for comment.
While the new subsidy is being built in, that’s what we know.
What if my insurer says he cannot offer the subsidy yet?
The good news is that while you may not be able to report for a few weeks or months due to operational delays, if you are eligible for the COBRA grant, any qualifying claims must accrue after April 1st (and before the end of September) word. covered, experts say.
But expect to have to do work to get it right.
Store all your medical records during this period, says Caitlin Donovan, a spokeswoman for the Patient Advocate Foundation, a non-profit organization that helps patients access and pay for health care.
“Keep a folder with all the paperwork you get, any checks you write and ask for receipts,” Donovan said.
Doing so will make it easier for you to file claims or bills with your insurer as soon as the subsidy starts, or to be reimbursed for the expenses you have indicated and which are eligible for cover.
If you are concerned about upfront costs, explain to your doctors that you are waiting until your COBRA coverage starts, and ask if they can wait to pay your insurer, experts say.
Who qualifies for the subsidy?
You are eligible if you have involuntarily left a job that offered health insurance and you do not qualify for another employer plan or Medicare, Donovan said.
“You would even qualify if you had previously rejected COBRA,” Donovan said.
Any family members on your plan will also be fully covered. If you still have your job but your hours have been reduced to the point where you have lost access to your health insurance plan, you may also qualify for the six-month subsidy.
You must take written notice of your eligibility, probably from your employer or medical insurance company. Contact your former insurer if you have not heard anything yet.
How does the subsidy change my costs?
How long will the subsidy last?
The subsidy lasts until 30 September 2021.
Usually, you can not be on COBRA for more than 18 months in total, so some people may be cut off earlier than that date, depending on when they started coverage.
What if I have already declined COBRA coverage?
Do not worry. It is not too late to make use of this relief.
Dismissed workers must usually report to COBRA within 60 days of the termination of their employment. But even if, for example, 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, remember that once you have been notified that you are eligible for COBRA, you must report within 60 days.
Do I have to pay for months that I did not insure with COBRA?
Usually, if you do not sign up for COBRA right away and later decide to do so, you will have to repay premiums because you may not have a gap in coverage.
The relief bill temporarily changes the policy.
According to Georgetown experts, you do not have to pay back premiums after the date you were originally eligible for COBRA.
However, you will only be covered for claims starting from 1 April.
When does coverage by COBRA make sense?
The biggest disadvantage of COBRA is usually the cost of laid off workers, which can run into the thousands of dollars per month. The legal aid bill eases the hurdle, at least until September.
One of the key benefits of COBRA is that you can retain your current doctors and healthcare providers. If experts believe that you have reached the deductible for the year, taking out your workplace insurance can be even cheaper compared to other plans.
Other insurance options for the unemployed include Medicaid and shopping for a plan on the market of the Affordable Care Act.
Medicaid can make sense if you expect your financial problems to continue for a long time and also give you no monthly premiums.
Meanwhile, some unemployed Americans may qualify for a free marketing plan on the ACA, or Obamacare exchange, following changes made to the most recent incentive package. For example, if you have collected unemployment insurance at all during the year, you may be eligible for a free silver plan.
Not only do you have to pay a premium, but your expenses can also be minimal.
“Because of this, a market plan may be a better option for you,” said Edwin Park, a research professor at Georgetown University’s McCourt School of Public Policy.
What will be my options at the end of September if I join COBRA?
Unfortunately, there is not yet a good answer to this.
At present, the government has not yet said that it will offer people who use the COBRA subsidy a special enrollment period at the end of September, except in narrow circumstances. (With special enrollment periods, people can enroll in the market outside the normal window for health insurance plans.)
Elected officials wrote to U.S. Secretary of Health and Human Services Xavier Becerra this month to create a special enrollment period for him when the subsidy expires.
If one is not fixed, they warn: “it will leave many consumers without a realistic option to find affordable coverage until the Open Enrollment Period for plans starting in 2022.”
Are you having problems accessing the new COBRA subsidy? Send me an email to [email protected]