When employees lose their jobs, one of their biggest worries is how they will afford to pay for their healthcare and that of their families. Ordinarily, most employees who lose their jobs are able to maintain coverage on their existing group health plan through the month of their termination. After that, they may be eligible to enroll in a COBRA plan for an additional 18 months. Enrolling in a COBRA plan generally means that employees maintain their group health insurance coverage with their employer, but now they must pay 100% of the premium. This can be extremely costly for individuals already going through the difficulty of a job loss.
Fortunately, many employees who lose their job will now be able to enroll in a COBRA plan free of charge, at least through September. With the March 11th enactment of the American Rescue Plan Act (ARPA), employers now must pay for 100% of the applicable COBRA premiums for eligible former employees for the period from April 1 through September 30. These employers are then reimbursed by the federal government on a dollar-for-dollar basis through tax credits.
Who Is Eligible for COBRA Coverage?
Former employees are only eligible for “free” COBRA health insurance coverage if they experienced an involuntary termination (other than for gross misconduct) or a reduction of hours, causing them to lose their coverage with their employer. In addition to employees who lose their job between April 1 and September 30, employees who previously lost their job and are still within the 18-month COBRA window may newly enroll or re-enroll in the plan. Accordingly, those eligible will generally be those employees who were first eligible for COBRA coverage in November 2019 or later. The ARPA does not, however, extend the 18-month duration of COBRA benefits.
How Can I Enroll in A COBRA Plan?
Eligible former employees may elect to enroll or re-enroll in COBRA plans during the special enrollment period from April 1 and ending 60 days after the former employee has received the required notice from their former employer. Employers are required to provide such notice by May 30. If former employees are already covered by COBRA as of April 1, they do not need to re-enroll or take any other action. However, they may want to contact their former employer to request reimbursement of premiums paid and/or to ensure the employer takes over the payment of premiums.
If you have any concerns about your COBRA rights or if you feel that your former employer has improperly categorized your separation in violation of your rights, please contact our experienced employment law attorneys.