Be ready for sticker shock with COBRA, but ACA has a special enrollment period for people who have lost their jobs
The number of Americans filing for unemployment benefits is staggering. Sadly, these people have not only lost jobs and income but also their health insurance. If you’re among them or will be soon, I’d like to offer my sincere condolences and advice on how to get health insurance after a job loss.
Tragically, up to 35 million Americans could lose their health insurance in coming weeks as businesses lay off workers due to repercussions of the coronavirus pandemic, according to a new study by Health Management Associates, a health care research and consulting firm.
Here’s what a few experts recommend for continuing the insurance you had or buying new coverage:
If you recently lost job-based plan coverage, you can typically continue enrollment for up to 18 months (sometimes longer) under a federal law known as COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act. It requires firms with at least 20 employees to offer this option. You have up to 60 days to elect COBRA and another 45 days to pay the first premium (covering the period dating back to your coverage loss).
The drawback: The premiums are steep. Figure on something like $600 a month per person or more.
“That can be sticker shock, at a time when you’re financially stressed already,” said Rich Fuerstenberg, a senior partner at the benefits consultant Mercer.
“Typically, an employer picks up close to 80% of the [employee’s] premium. Now, you pay the entire cost of the premium, plus up to a 2% administration fee,” Fuerstenberg said.
“This will be the most expensive option,” says Karen Pollitz, a senior fellow at the Kaiser Family Foundation. “But if you can afford it, and if you’re already in treatment for an ongoing condition, it may be worthwhile to just remain in your job-based plan, not restart your deductible and keep access to the same doctors who are treating you today.”
If you now have a low income and need health insurance, “Medicaid is a good place to start,” said Pollitz.
In 37 states and Washington, D.C., Medicaid offers free, comprehensive health coverage to people whose income has dropped below 138% of the federal poverty line. That’s about $1,467 a month for a single person or $1,982 per month for a couple. In some of these states, adults with higher incomes may qualify.
A caveat: In 14 states, low-income adults generally can’t get Medicaid unless they’re over 65 or disabled.
If you qualify for Medicaid, you can apply anytime. Nearly all hospitals and many doctors accept Medicaid, although doctor participation rates vary by state. In most states, Medicaid coverage is delivered by managed care plans.
To see if you’re eligible, go to the federal health insurance marketplace at HealthCare.gov. Or go to the website for your state’s Medicaid agency directly.
The Affordable Care Act Marketplace
Normally, enrollment in the Affordable Care Act Marketplace is limited to the short window for Open Enrollment during the winter each year. But there’s an exception for people who’ve lost their jobs, known as the Special Enrollment Period, which allows them to apply because their layoff meant a loss of health insurance.
You usually must enroll within 60 days of when your coverage stopped and prove that you lost your health insurance.
Also, Affordable Care Act Marketplaces in 12 states and Washington, D.C., have reopened due to the pandemic and anybody there can sign up for a private health insurance policy, Pollitz said. The states are California, Colorado, Connecticut, Maryland, Massachusetts, Minnesota, Nevada, New York, Rhode Island, Vermont and Washington.
“In the marketplace, eligibility for subsidies is based on your projected annual income for 2020, so you’ll have to estimate that,” Pollitz said. “If you think your total income this year will be between $12,490 and $49,960 [$16,910 and $67,640 for a couple; up to $103,000 for a family of four], you can qualify for subsidies. Unemployment benefits count toward income.”
A caveat: Marketplace plans typically have high deductibles and most plans have a limited number of health provider networks, so you may need to change doctors after signing up.
Your former employer (possibly)
The benefits consultant Mercer found that many companies are providing subsidies to help their laid off and furloughed workers keep their health insurance coverage temporarily. Some may commit to doing so for only a couple of weeks, said Fuerstenberg.
If your employer does this, you may be required to pay your normal paycheck contribution.
Join a family member’s coverage
If you’re married to someone who has an employer-based health insurance plan or are recognized as the person’s domestic partner, you may be able to join that plan. You generally must do so within 30 days of losing your own coverage. Call the employer to learn the specific rules for the plan.
To sum things up, “research what each option entails and understand the associated costs, benefits and drawbacks,” said Shobin Uralil, co-founder and COO of Lively, a health savings account provider. “In addition to Healthcare.gov, you can research options at sites such as HealthSherpa, eHealth and Stride.”
Author: Kerry Hannon
Source: © 2020 MarketWatch, Inc.
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