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Thursday, April 1, 2021

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.