People who lost health insurance because of the pandemic may qualify for COBRA subsidies

Health coverage remains a major concern for millions of Americans who are out of work. 

With that in mind, the new COVID relief package offers one temporary solution.  

Under the American Rescue Plan, people who lost their jobs because of the pandemic may be eligible for COBRA subsidy payments. The subsidy period lasts from April 1 to September 30, 2021. What this means is that the government will cover 100% of your COBRA payments (both your portion and your employer’s contribution) during this time.

What’s COBRA? It stands for Consolidated Omnibus Budget Reconciliation Act. It gives workers and their families the option to hold onto health benefits for a time after a job loss. Read more about COBRA here.

Who qualifies for a COBRA subsidy?

According to The National Law Review, you may qualify for a COBRA subsidy if you lost your job or had your hours cut prior to April 1, 2021, and either:

• Didn’t ask for COBRA coverage at the time, or
• Opted for COBRA before April 1, 2021, but stopped coverage before that date.

If either scenario applies, you may be able to apply for full coverage through your previous health plan anytime between April 1 and September 30, 2021. Full coverage may apply to you, your spouse, and eligible children. 

Employers have until May 31, 2021 to notify qualified workers about the subsidy opportunity. After that, you have 60 days to apply. 

Not everyone will qualify. For example, you won’t qualify if you were fired for gross misconduct. According to HRZone, gross misconduct includes any negative actions that result in immediate dismissal. 

Also, you won’t qualify for these subsidies if you gain coverage through another employer’s health plan. 

Finally, you can’t use the subsidies to extend the maximum 18-month COBRA period. For example, if you lost your job on January 1, 2020, and have been using COBRA for coverage, both COBRA and the subsidy end for you at the 18-month mark.

Got questions? Your previous employer may be able to offer more information.