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COBRA Is Free Till September 2021: Here’s What You Need To Know

The COVID-19 pandemic has wreaked havoc on mankind. Everyone knows that people worldwide have lost their lives to the deadly coronavirus. Besides that, many countries have experienced a steep decline in their economy. As a result, many have lost their jobs. But, there is a piece of good news for the people in the USA.

Americans whose employers have handed a pink slip are eligible to stay on or join the healthcare plan of their previous employer. They wouldn’t have to shell out a single penny till the 30th of September. This provision under the American Rescue Plan Act became effective from the 1st of April. How does it work? It works through COBRA, a federally administered program. For more details about it, continue reading.

Who is Eligible?

COBRA has a few eligibility criteria which you need to be aware of. The list includes moving from one job to another. A cut down in the working hours, job loss (voluntary or involuntary), divorce, and various other life-changing events impact lives. The United States Department of Labor enlists all these criteria. According to the relief bill, anyone can qualify if they have voluntarily or involuntary lost their jobs or faced a cut down in the working hours over the last one and a half years.

A cut down in the working hours encompasses the change of timing in business operation, an alteration from full-time to part-time employee status, taking a leave temporarily, or taking part in a legal labor strike. Those who have insurance cover under COBRA are eligible to avail of the benefits.

Who is Not Eligible?

If you have left your job voluntarily or chose to cut down your working hours, you won’t be considered eligible. Besides that, if you were found guilty of misconduct and were eventually fired, you and your family members who are dependent on you wouldn’t qualify for COBRA. In case you are already on health insurance, either through your employer or the government, subsidized COBRA is not for you. The cut-off age for those in your family who are dependent on you is 26.

In case a dependent is already 26 or above, they wouldn’t be considered eligible. Former spouses, who no longer are on the plan owing to divorce, will not receive the benefits of COBRA. Of course, they can lower costs in the case of Marketplace health insurance coverage. This has been made possible by the provision mentioned in the American Rescue Plan Act of 2021.

How to Enroll to Get the COBRA Benefits?

Employers have around 60 days in their hands to inform you that they are eligible for COBRA. According to the relief bill, if you have recently become eligible, your employer must send you a notification by 31st May. Suppose you are not notified within the stipulated period. In that case, the Labor Department asks you to contact your employer and request them to notify you whether you are eligible or not.

If you are intimated by your employer on the last day of the stipulated period, i.e., on 31st May, some chances might deprive you of 60 days of free coverage. So, you must contact your previous employer as early as you can if you don’t want to miss out on the privileges. The last date of enrolment is 30th July, if you are not in a hurry. If you have already signed up for a COBRA plan, subsidized premiums will start from 1st April and get over by 30th September.

What are the Other Important Factors?

Though the subsidy covers the health plan’s premium, you will have to shell out the deductibles and copays. If you have enrolled yourself for subsidized COBRA, you can get the benefits beyond 30th September.

However, you will need to shell out the premiums post that date. After the period of subsidization gets over, you might have the eligibility for Medicaid or Marketplace health insurance coverage. This is what the Department of Labor states.

If you are not eligible for COBRA, you can try out Affordable Care Act marketplace plans. If COBRA seems expensive, then this might be a great option for you. And it would help you stay away from worries of long hospital bills in the case of a medical emergency.

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