You Now Have More Time to Sign Up for COBRA After a Job Loss

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With the unemployment rate lingering in the double digits, the Kaiser Family Foundation estimates 26.8 million people could soon become uninsured if they don’t sign up for other health coverage. If you are one of the millions of Americans who have experienced job loss during the pandemic, you may be facing a tough health insurance decision—but as NPR reports, you may now have more time to plan a course of action.

According to federal law, if you lose job-based health insurance after a layoff or reduction in hours, you have 60 days to decide whether to keep your company’s plan by opting into COBRA. But a new rule says the 60-day window doesn’t begin until the COVID-19 “outbreak period” officially comes to an end—and that point hasn’t been determined as of yet.

The new extension gives you at least 120 days to elect to continue your previous coverage with your former employer under COBRA. Here’s the problem with that, though: If you choose the COBRA option, you will have to pay 102% of your company’s health insurance premiums—the full cost, plus a 2% admin fee.

There’s also a risk that your former employer won’t survive the pandemic. If the company goes out of business, your COBRA health insurance goes away, too.

Despite these high costs, 10% of workers laid off or furloughed from the pandemic have chosen COBRA, according to a recent report from The Commonwealth Fund. It may be a path worth considering if you don’t want to start over with a new health insurance deductible—particularly if you have already made a big dent in your 2020 payments. You may also prefer to keep the same network of doctors and hospitals.

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Other health insurance options

If COBRA is too expensive, you have other options to secure health insurance. You may be eligible for Medicaid—which could be free to low-cost, depending on your situation. You can even get retroactive coverage as far back as three months. You can learn more specifics about how to qualify here.

You may also shop for health insurance through Healthcare.gov—aka the Marketplace. You may qualify for a special enrollment period to sign up for a plan. Depending on your income, you could be eligible for cost-sharing reductions, which might make your monthly premiums more affordable.

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