Jennifer L. Henn  |  August 3, 2020

Category: Insurance

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COBRA election period may be extended due to COVID-19.

More American workers are getting laid off or furloughed every day because of the economic crisis sparked by the coronavirus pandemic, forcing them to make a lot of hard decisions. When it comes to the question of whether to continue their employer-sponsored health insurance though, at least they’ll get a little longer than usual to decide.

The Consolidated Omnibus Budget Reconciliation Act, or COBRA, election period has been extended due to the pandemic. Usually, employees who lose their health benefits because of job loss or a reduction in hours have 60 days to decide whether to continue the insurance themselves and take over the payments. Federal officials though have extended that period to last 60 days past the end of the national emergency, whenever that is called to an end, National Public Radio news reports.

What Is COBRA and How Does It Work?

Federal health care laws require employers with 50 or more full-time workers to not only offer health insurance coverage to eligible employees, but pay some part of the cost as well. Employee eligibility is usually determined by the number of hours the employee works. When a worker loses their eligibility – either they stop working for the company or their hours are cut back – the company is allowed to stop paying for the health benefit and the Consolidated Omnibus Budget Reconciliation Act, or COBRA law, is triggered.

COBRA demands that the insured worker and any dependents who are also enrolled in the health plan of an employer with at least 20 employees are given the option of continuing the coverage at a group rate, which the worker must pay independently. The worker can stay on the health plan for as many as 18 months. Any of the worker’s dependents who are also enrolled can stay on the plan for up to 36 months.

The U.S. Department of Labor oversees and regulates COBRA, including the COBRA election period and the required notification of eligible participants. The notifications can be “difficult to understand because it includes a large amount of required legal information and language,” the consumer financial website Investopedia says.

COBRA election period may be extended due to COVID-19.COVID-19 Crisis Leads to Extended COBRA Election Period

On May 4, just about two months after the White House declared a state of emergency due to the coronavirus pandemic, the labor department and Internal Revenue Service issued an “Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak.” The document extended not only the COBRA election period, but also some deadlines regarding benefit claims and appeals.

The extended COBRA election period gives workers who lost their employer-subsidized health benefit up to 60 days from the date the national state of emergency is declared over to decide whether to continue the coverage.

The government also extended the payment deadlines for COBRA premium payments until after the state of emergency ends, according to the Society for Human Resource Management.

Millions of U.S. workers have lost their jobs, or has their hours severely cut, during the COVID-19 crisis. National unemployment statistics show the number of Americans out of work now rivals rates during the Great Depression, according to the Brookings Institution.

COBRA Election Period Extension Will Help Some, Not All

Continued health care coverage can provide a safety net to those who need it, but not all employees will benefit, the report by NPR says. That’s because COBRA insurance can be very expensive. The employee must pay their share, the amount previously covered by their employer and a 2 percent administrative fee.

A study by the Kaiser Family Foundation in 2013 said the average monthly COBRA bill was $490, another NPR report noted.

Costs vary according to the type of coverage offered by each plan, but price might have something to do with the fact that only about 10 percent of workers furloughed or laid off because of the pandemic chose the COBRA option in May and June, a survey by the Commonwealth Fund found.

COBRA Notice Is Also Extended, Experts Warn

In addition to extending the COBRA election period, the federal government also gave employers more time to notify workers of their eligibility for COBRA. Since the 60-day period to enroll won’t begin until the COVID-19 state of emergency ends, companies don’t have to send notifications about the COBRA option until the emergency is over.

Many big businesses pay outside companies to handle their employee benefits plans. Those companies specialize in administering benefits, NPR reported, and are more likely to have automated processes for COBRA notifications that would not be affected by the deadline extension. Eligible employees of smaller businesses might be more likely to experience a delay in COBRA notifications, the article said.

Join a Free COBRA Class Action Lawsuit Investigation

If you received a COBRA notice that did not fully disclose your rights and how to retain your health insurance following separation from your job, or you received no notice at all, you may be qualify to join this COBRA notice class action lawsuit investigation.

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This article is not legal advice. It is presented
for informational purposes only.

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