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COVID Relief Bill Changes COBRA

What does President Biden’s new bill mean for COBRA insurance?

What Pres. Biden’s New Relief Bill Means for COBRA Insurance?

Just days before he was elected president, Joe Biden outlined his agenda for post-COVID-19 recovery efforts- which include provision of subsidized COBRA coverage. The then president-elect laid out an elaborate plan to address the healthcare challenges by increasing Affordable Care Act subsidies, while paid leave obligations for employers are also set to increase.

COBRA continuing coverage is one of the key highlights of Biden’s administration, with continuing coverage being extended until September 2021. COBRA continuing coverage will address healthcare needs for people who have lost jobs but do not specify the amounts to be allocated to each individual.

Government Will fully cover Laid-off Workers’ COBRA Premiums Through September

Last year, the Democrat-controlled house approved the first Heroes Act thus giving workers who had been laid off, had their hours cut or furloughed by offering them a 100% subsidy.

According to a report by the Kaiser Family Foundation, it is estimated that approximately three million people were laid off and subsequently lost their employer-sponsored health insurance between March and September 2020.

The American Rescue Plan is therefore address healthcare coverage through COBRA. While some COBRA policies during the COVID-19 era was confusing especially to employers, some organizations such as the America’s Health Insurance Plans (AHIP) have been agitating that the government continues with COBRA for several months.

A brief by the Kaiser Family Foundation found that by extending COBRA, the issue of non-insurance would reduce. If COBRA was to be extended up to two years, that period would cost the government an estimated $106 billion. However, extending COBRA could eventually address some of the main concerns that cause high premiums.

How Capping Health Insurance Premiums Will Affect Workers

The plan to cap premiums of the Affordable Care Act by Biden’s administration also seeks to address the issue of high health insurance premiums. The Trump administration was opposed to the Affordable Care Act and even went ahead and reduced premiums when Donald Trump was in office. This led to a decrease in Affordable Care Act marketplace premiums as they were only accessible to people eligible for premium tax credits.

Who are the Major Beneficiaries?

The current administration is hoping that by increasing premium tax credits, more than ten million Americans who rely on premium-related healthcare will spend much less. The new plan by Biden administration is to first address the veterans who took the greatest hit after the COVID-19 pandemic.

Prior to the crisis caused by COVID, the Veteran Health Administration had registered some success with very low non-adherence rate. After the COVID-19 crisis, the Veteran Health Administration was pivotal toward addressing the health crisis, especially toward the communities that were most affected.

The Veteran Health Administration also maintained coverage to veterans after most of them lost their employer-sponsored health insurance. Such efforts are what put the organization under the current financial strain.

What the new Relief Bill Means for COBRA insurance

Thanks to the $1.9 trillion stimulus package, Biden administration will maintain laid-off workers employer-sponsored health insurance up to September. However, what is unclear is how many Americans will benefit from the relief bill.

Some experts agree that the statistics seem to show that while the COBRA extensions have been good on paper, people haven’t been signing up at the rate that policymakers likely hoped for. While lack of knowledge of the ins and outs of this program is probably partially to blame, there are likely other reasons as well.

For one, COBRA can be expensive if you don’t know what your options are. After all, COBRA at its most basic definition means that you’ll have to pay your portion of the premium as well as the employer’s portion. Another issue is that people may not understand the signup process for COBRA and just don’t bother.

In order to find out what your options are or get a walkthrough of COBRA, click the button below or call our hotline at 888-375-8879 to speak directly to an agent..

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