Fired or Laid Off? Your Employer Now Has to Pay Your Insurance Costs Through September

 The American Rescue Plan has a lot to unpack. One of the provisions that has gotten the least amount of press attention is the fact that employers now have to pay your COBRA costs if you've been let go. This benefit starts April 1, 2021 and ends September 30, 2021. That's a heck of a lot of savings for unemployed workers.

Who is entitled: Anyone who loses their health insurance because they lost their job or had hours reduced, except those who voluntarily ended their employment. What is "voluntary" will probably be the subject of litigation. If you were forced to resign due to, for instance, discrimination, sexual harassment, or whistleblower retaliation, or your employer tells you that you have to resign, then that's constructive termination and you may still be eligible.

You didn't elect or coverage lapsed: If you already failed to elect COBRA or let it lapse because you couldn't afford it, don't despair. You can now elect COBRA. If you were entitled to elect COBRA continuation coverage before April 1, your insurance plan administrator has to send you notice within 60 days from April 1 of your entitlement to elect coverage now. If you are interested in a late election, I suggest contacting your plan administrator ASAP.

How much do you pay?: Zero from April 1 to September 30. After that, you have to pay your share of the premiums. Your employer will get a tax credit for paying it.

So, if you needed another reason not to quit, this is a biggie. If your employer tries to get you to sign something saying you quit voluntarily, better get some legal advice.

If You Have A Preexisting Condition, Choose COBRA or ObamaCare Over Your Mortgage

It used to be that when people lost their jobs, there was only one way to keep insurance coverage, and that was COBRA. The only problem is that when you lose your job, you have to pick and choose what bills to pay and COBRA is crazy expensive. Most people had to go bare. If they had preexisting conditions, it was literally a matter of life and death because they would never get insurance again.

Then came the Affordable Care Act, which is the same as ObamaCare if you haven't already figured that out. The ACA allowed people who lost their jobs to get alternative insurance that was much cheaper than COBRA. Plus, it both banned insurance companies from denying coverage due to preexisting conditions and also from charging more to those with preexisting conditions. So, yes, insurance rates went up for those who were healthy, but it saved billions in government-subsidized healthcare. The reason being that anyone who was uninsured had to go to publicly funded hospitals for all their healthcare needs.

Since the election, I've been warning people who lose their jobs to make sure they elect either ACA or COBRA, and under no circumstances to lose coverage if they have a preexisting condition because I thought preexisting condition coverage would be lost when Trump and the Republicans started to gut the ACA.

I've been accused of being an alarmist, but that's exactly what the latest proposal would do. While it would still prohibit insurers from denying health insurance to those with preexisting conditions, it allows them to raise premiums. A recent study made these findings:

Based on our analysis, we estimate that individuals with even relatively mild pre-existing conditions would pay thousands of dollars above standard rates to obtain coverage. For example, because an individual with asthma costs an issuer 106 percent more than a healthy 40-year-old, she would face a premium surcharge of $4,340. The surcharge for diabetes would be $5,600 per year. Coverage could become prohibitively expensive for those in dire need of care: Insurers would charge about $17,320 more in premiums for pregnancy, $26,580 more for rheumatoid arthritis and other autoimmune disorders, and $142,650 more for patients with metastatic cancer.

Because there are few things that can bankrupt you as quickly as medical bills, if you lose your job and have to choose between paying your mortgage and paying for insurance, the wise decision might just be to pay for insurance. While your mortgage company may work with you to allow you time to catch up, losing your coverage if the Republicans manage to repeal preexisting condition coverage may literally kill you.

If you care about this, call your Congress member and Senator now and tell them to stop this folly before they kill a bunch of people.

Guest Post: Will Your Employer Miss The October 1 Deadline For Obamacare Notice?

By Associate Attorney who now chooses to be anonymous, Donna M. Ballman, P.A., Employee Advocacy Attorneys

October 1, 2013 is the first day employees can officially sign up for the Affordable Care Act, a/k/a “Obamacare.” Although you can sign up for Obamacare starting on this date, no one will actually get coverage until January 1, 2014. The gap between enrollment and enactment provides the government and insurance companies time to ease into the new program and make any necessary adjustments for a smoother transition. Open enrollment in the program does not end until late March 2014.

Your employer is supposed provide written notice to all existing employees and any new employees hired, beginning on October 1, 2013. A notice is timely issued if provided within 14 days of an employee’s start date.Your employer is probably going to miss this deadline.

Many small businesses reported that they were unaware of the notice requirements and feared potential risk to penalties. As a result, the Department of Labor (DOL) posted a notice on its website stating that employers cannot be fined for failing to provide the notice. Unfortunately, although the notice is a “requirement,” DOL stated, “If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.” [Donna's comment: on the other hand, if employees miss any deadline, just see what happens to them. Fair? Ha!]

The main focus of Obamacare is the establishment of the Health Insurance Martketplace (“Marketplace”), which is set to start on January 1, 2014. The Marketplace provides “one-stop shopping” for consumers to find and compare private health insurance options. Section 1512 of the law requires employers to provide employees notice of the coverage options available to them through the Marketplace. Your employer must provide the notice to each employee regardless of their health plan enrollment status or whether or not the employee works part-time or full-time. However, employers are not required to provide notice to dependents or those who may became eligible for coverage but who are not employees.

The notice to employees must: (1) inform you of the existence of the Marketplace, description of services provided by the Marketplace, and ways to contact the Marketplace for assistance; (2) inform you that if the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60% of such costs, you may be eligible for a premium assistance tax credit and cost sharing reduction; and (3) if you purchase a qualified health plan through the Marketplace, you may lose any employer contribution to any health benefits plan offered by the employer, and all or a portion of such contribution may be excludable from income for Federal income tax purposes.

DOL provides model notices on their website, which is worth looking at if you are considering exploring the Marketplace options, especially since your employer may not send you the notice. The website provides two model notices, one for employers who do not offer a health plan and another for those who do offer a health plan to some or all employees. Employers are not required to use the model notices, as long as the written notice they do provide meets the requirements discussed above.

It is worth looking into the Marketplace even if you are already covered, because you may find more affordable or more comprehensive coverage there.

What You Need To Know About Your Employer's Health Insurance

No Federal law requires your employer to carry health insurance coverage for employees (a few states, like Massachusetts and Hawaii, are different). However, once they do have coverage, there are some Federal requirements employers must comply with. If your employment has ended, read the paperwork you get on COBRA to find out about your rights to continued coverage. If you're still employed or about to be employed, here's what you need to know about your insurance.

Non-discrimination: Your employer must not discriminate in providing or reducing coverage based on , for example, age, disability or pregnancy.

Plan description: The Employee Retirement Income Security Act (ERISA) requires your employer to provide a description of your plan and how to make claims.

Privacy of records: If your employer does have access to medical records, such as when it’s self-insured, it must comply with the privacy requirements of HIPAA.

Specific coverage requirements: Certain procedures must be covered once insurance is provided. For instance, if mastectomies are covered, then reconstructive surgery must also be covered. Insurance can’t restrict the length of hospital stays for the birth of a child to less than 48 hours for vaginal delivery or 96 hours for c-section.

Preexisting conditions: HIPAA limits exclusions for preexisting conditions to no more than 12 months, and allows plans to look back no more than 6 months. Pregnancy and genetic information can never be excluded. If you were covered by a prior plan and had less than a 63 day break in coverage, preexisting conditions won’t be excluded. Most children can’t be excluded based on preexisting conditions.

Health factors: You can’t be denied insurance or have benefits reduced due to your health status, physical or mental illness, claims experience, receipt of health care, medical history, genetic information, conditions arising from domestic violence, participation in hazardous activities, or disability.

Certificate of coverage: The employer must provide a certificate of coverage automatically at certain times, and upon request.

Young adults: Your plan must allow you to have your children covered up to age 26.

Lifetime limits: No lifetime limits on coverage are allowed anymore. Most plans won’t be able to have annual limits.

Rescission: If you become ill, the insurance company can’t look for unintentional mistakes on your application as an excuse to deny coverage.

Eliminate or reduce coverage: Your employer can eliminate coverage or change plans at will.

Donna’s tips:

a. Your employer has to disclose if it believes its plan is “grandfathered” and exempt from some of the new health care reform’s requirements. If it is grandfathered and significant changes are made to the plan, it might lose its grandfathered status and have new requirements.

b. Non-grandfathered plans must provide access to pediatricians and OB-GYNs and coverage of preventive services with no cost sharing.

c. Read your plan and understand it. Don’t wait until a crisis to understand your health care coverage and rights.