How to Qualify for 100% Subsidized COBRA Premiums


What is COBRA?

COBRA, or the Consolidated Omnibus Budget Reconciliation Act, allows you to remain affiliated with your company’s health insurance plan for up to 18 months, provided the company has 20 or more employees (this can be extended for an additional 18 months depending on certain specific events). You qualify if you have been laid off, have reduced hours, or even if you have been terminated unless the termination was the result of gross misconduct (which is loosely defined – some employers will ignore this and offer a COBRA coverage just to avoid the courts).

The acronym COBRA actually comes from “Consolidated Omnibus Budget Reconciliation Law”, an American law dated 1985. 

This provides that in the event of a change in professional situation or divorce which would lead to the end of his rights in terms of health coverage, the American citizen may continue to receive health insurance benefits for a given period.

Sounds good, doesn’t it? There’s a catch, though. While you keep your employer’s insurance under COBRA, you still have to pay the monthly premiums yourself. Since employers often cover around 80% of your premiums, that’s a steep price to pay  up to $7,470 for individuals and $21,342 for family coverage, on average, annually, according to Kaiser. Family Foundation.

COBRA will also not cover other employer policies like life insurance or disability insurance, which will also increase your costs. In the absence of any subsidy, other options like Medicaid or Obamacare might be preferable.

Who is eligible for the Enhanced COBRA Grant?

Per CNBC, the 100% premium subsidy applies to everyone who is already eligible for COBRA. It is also available to employees who did not elect COBRA coverage during their original election period, as well as those who initially elected COBRA but let their coverage expire. However, those who are eligible for other group health coverage or Medicare are not eligible for the subsidy.

This means that virtually anyone who lost their job at the start of the pandemic will qualify, as their 18-month COBRA period includes the period from April 1 to September 30, 2021, when the subsidy ends.

Also, beginning April 1, employers may offer you a special 90-day enrollment period to enroll in another group health plan, although premiums may not exceed what you are already paying. . This is an optional policy for employers, so you will want to check with your previous employer to see if this is offered.

As everywhere in the world, the life of a person in the United States is made up of ups and downs and is not without unforeseen events. Thus American law has provided provisions to ensure that a person remains insured despite the loss of his job: COBRA insurance.

What are the advantages and disadvantages of COBRA insurance?

COBRA insurance has many advantages. Among the biggest, is that of being able to keep exactly the same health coverage as that which the insured had during his period of employment. This leaves more time and security in periods of transition or for the search for a new job. Administratively speaking, the system is also intended to be very simple since nothing changes. The insured keeps the same insurance card and must generally follow the usual process that he knows well. Another benefit of COBRA insurance is that it covers pre-existing conditions.

In contrast, COBRA coverage usually lasts only 18 months after the initial change in circumstances. If the insured does not manage to find a job within this period, he risks finding himself without health coverage. Another big disadvantage of COBRA insurance for those who benefit from it and are looking for work: this coverage can have a higher cost for the employer than other coverages. It can therefore be more difficult to find a job and reintegrate into the professional environment. Finally, pay attention! Because if your former employer changes his insurance policy, you will also be affected.

Who can benefit from COBRA insurance?

In order to benefit from COBRA insurance, it is necessary to have worked the previous year in a company with at least 20 employees (employees of the federal system or religious organizations are not taken into account). As an expatriate in the United States, it remains essential to take out good private health insurance beforehand.

What about the self-employed and employees of small businesses?

COBRA insurance is only valid for people who have worked in companies with more than 20 employees, which is far from being the norm. If you have worked in a company with less than 20 employees or if you are self-employed, it is strongly advised not to find yourself without medical coverage even for a few days. EuropUSA can advise you on international medical insurance allowing you to be covered – in general with much better guarantees – when you change jobs and some insured take the opportunity to negotiate with their new employer the assumption of responsibility for part of the insurance premiums. International health insurance offers real advantages in terms of rates and guaranteed-price ratio compared to local American insurance.

If you were in a structure of more than 20 employees, international health insurance can also be interesting for you knowing that the insurance formulas with COBRA often turn out to be at high rates.

By aamritri

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