Have you lost a job, and with it your employer-based health insurance? You can get 6 months of that insurance for free starting April 1.
Last month’s American Rescue Plan Act included the $1,400 stimulus payments, expanded unemployment insurance, and many other benefits. One other less well-known benefit pays your health insurance if you’ve lost your job and your health insurance with it. Today’s blog post talks about this new free health insurance.
What is This Health Insurance Benefit?
This benefit could potentially pay your and your family’s entire health insurance premiums for April through September of 2021. The White House, American Rescue Plan.
That could save you lots of money. You’d save by not having the pay the monthly insurance premiums. But you could especially save by having coverage for any health care costs that would arise during this time.
This new benefit is available to you if you lost your employer-based health insurance because of involuntarily losing your job. It also applies if you lost your health insurance because your work hours were reduced. However, this paid coverage does not kick in if you lost your job because of “gross misconduct.”
The paid coverage starts as of April 1, 2021. But you don’t need to have lost your job or had your hours reduced after that date. Your job loss or hours reduction could have happened as long ago as late 2019. U.S. Dept. of Labor, FAQS about COBRA Premium Assistance under the American Rescue Plan Act of 2021, April 7, 2021.
This Is a COBRA-based Benefit
COBRA is the federal law which enables people to continue their group health insurance after losing a job. Or, again, after losing coverage because of reduced work hours. ” COBRA generally . . . allows you (and your family) to continue the same group health coverage at group rates.” U.S. Dept. of Labor, COVID-19 FAQs for Participants and Beneficiaries, April 28, 2020. Group health insurance rates are usually lower than individual rates. However, your monthly premium cost still usually goes up substantially. That’s because you have to pay your former employer’s share, as well as your own.
So the good news is that the federal government will pay all of your COBRA monthly premiums for April through September if you qualify.
You can’t qualify if you are eligible for Medicare. Same if you’re eligible for any other group health plan. Examples are group plans by a new employer or a spouse’s employer.
To qualify for this new benefit paying for your COBRA insurance you first have to qualify for COBRA.
How to Qualify for COBRA
You should know whether you qualified for COBRA, the continued group health insurance coverage, after losing your job or hours. That’s because your employer almost for sure would have told you. More precisely, the law strictly requires employers to give employees or former employees information about their COBRA rights. COBRA applies to all employers with 20 or more employees.
Broadly speaking, you qualify for COBRA by meeting 3 conditions:
1) your group health plan must qualify,
2) you must have had a qualifying event, and
3) you must be a qualified beneficiary.
Your plan qualifies with the above-mentioned 20-employee minimum. Part-time employees count towards this 20-employee minimum, on a pro-rated basis depending on their hours worked. (For example, 10 half-time employees count as 5 employees for this.) Look to the number of employees in the prior calendar year. If there were 20 or more for more than 50% of the work days of that year, the plan qualifies. This includes private and local and state governmental employers; federal employees have a special COBRA-like law.
Qualifying events cause a person to lose group health insurance coverage. Involuntary termination (except for “gross misconduct”) and reduction in hours below the minimum for coverage are the main qualifying events.
To be a qualified beneficiary you must have been on your employer’s health insurance plan on the day before the qualifying event.
See the U.S. Dept. of Labor’s FAQs on COBRA Continuation Health Coverage for Workers for more information on qualifying for COBRA.
How to Get Your COBRA Health Insurance Premiums Paid
If you qualify, the insurance plan should send you “a notice of your eligibility to elect COBRA continuation coverage and to receive the premium assistance.” FAQS about COBRA Premium Assistance under the American Rescue Plan Act of 2021, pp. 4-5.
If you think you qualify but do not receive this notice, you should notify your employer or former employer. Use the simple 2-page form called Request for Treatment as an Assistance Eligible Individual on this webpage.