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There are a number of snags in free COBRA health insurance for unemployed. Here’s what you want to know

Linda, a lawyer from California who was laid off from her job in January, is like millions of others in the pandemic who are living without health insurance.But she discovered that the government would fully subsidize her COBRA health insurance premiums from April until September, thanks to a provision in the latest stimulus package. She…

Linda, an attorney from California who was laid off from her job in January, is like millions of others at the pandemic that are living without health insurance.

But she discovered the government would completely redesign her COBRA medical insurance premiums from April until September, as a result of a provision in the latest stimulus package. She contacted her insurer to sign up. Linda (she requested not to use her entire name) was excited to visit the doctor after having a painful urinary tract infection that month, which she dreaded could spread to her kidneys.

The principles in the $1.9 trillion relief bill passed in March appeared straightforward enough: The government could cover individuals COBRA premiums for six weeks beginning on April 1. COBRA, or the Consolidated Omnibus Budget Reconciliation Act, generally allows individuals who leave a business with 20 or more employees to stay on their office insurance plan if they could pay both their part of their premium and also the share their company had been previously paying.

Of course, many newly unemployed individuals can’t afford to do so, but this provision from the stimulus package is geared toward changing that by decreasing people’s monthly premiums entirely for six months.

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But when Linda emailed her prior insurance in April inquiring if she was free to visit the physician for treatment of her infection, she had been surprised to be told that the government subsidy is not available yet.

“[F]orms and processes have not yet been provided nor finalized by the IRS or DOL,” she had been told, according to the email seen by CNBC. “Until notified otherwise, we must operate as’business as usual.'”

“It’s frustrating to say the least,” said Linda, who worries she’ll have to visit the emergency room to get her disease and rack up debt. She has also had to stop taking her medication for anxiety and depression due to its cost.

Healthcare advocates are concerned that many different people may be running into similar problems trying to access the temporary COBRA subsidy, which that the U.S. Department of Labor has said started on April 1.

Getting the brand new system up and running will require coordination between numerous government agencies, companies and insurers. Meanwhile, companies don’t even have to notify individuals who could be eligible until the end of May.

“It’s available for such a short period of time, and you don’t even learn about it until May 31?” Said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy. “A lot of people may miss out on the opportunity.”

The Department of Labor didn’t respond to a request for comment.

While the new subsidy is rolled out, here is what we understand.

What if my insurer says it can’t offer the subsidy yet?

The fantastic thing is that even in the event that you can’t register for a couple of weeks or months due to operational delays, should you meet the requirements for the COBRA subsidy, some qualified claims racked up after April 1 (and prior to the end of September) should be covered, experts say.

But expect to have to put in a while to get this sorted out.

Save all of your medical records during this period, stated Caitlin Donovan, a spokeswoman for your Patient Advocate Foundation, a nonprofit which helps patients access and pay for health care.

“Keep a folder with any paperwork you get, any checks you write, and ask for receipts,” Donovan said.

Doing this can make it much easier for you to submit any statements or invoices to your insurer when the subsidy kicks in, or to have reimbursed for any expenses you laid out and that qualify for policy.

If you’re worried about upfront expenses, try to explain to your doctors that you are awaiting your COBRA coverage to kick in, and also inquire whether they could wait to bill your insurer, specialists say.

Who qualifies for the subsidy?

You’ll be eligible if you involuntarily left a job that provided health insurance and you do not qualify for one more employer plan or Medicare, Donovan said.

“You would even qualify if you turned down COBRA before,” Donovan explained.

Any family members on your plan would also be completely covered. Should you still have your job, but your hours have been cut to the point at which you lost access to your organization’s health insurance plan, you may also be eligible for your six-month subsidy.

You should receive written notification of your eligibility, likely from the employer or health insurance company. If you haven’t heard anything, then reach out to a former insurer.

How can the subsidy alter my costs?

The authorities will pay for 100% of your COBRA premiums. You could still be on the hook for any co-pays and deductibles.

How long will the subsidy last?

The subsidy will last through Sept. 30, 2021.

Typically, you can not be on COBRA for more than 18 months in total, so some individuals could possibly be cut sooner than that date however, depending on when they began their policy.

What if I already turned down COBRA coverage?

Don’t worry. It is not too late for you to take advantage of the relief.

Laid-off workers typically have to join with COBRA within 60 days after their employment ends. But even if you, say, turned down the policy August 2020 because the premiums were too large, now you can return and enroll, based  into the Georgetown University Health Policy Institute.

Keep in mind though that once you receive notice of you eligibility for COBRA, you’ll need to sign up in 60 days.

Will I need to pay for months I wasn’t guaranteed through COBRA?

Usually in the event that you don’t enroll immediately off with COBRA and opt to do this after, you need to pay premiums since you are not permitted to have a gap in coverage.

The relief bill briefly changes that coverage.

According to the experts in Georgetown, you wouldn’t have to pay premiums right back to the date you were initially eligible to enroll in COBRA.

However, you will just be insured for claims starting April 1.

When does coverage via COBRA make sense?

The largest drawback of COBRA is usually the price for laid-off workers, which can be thousands of dollars each month. The relief bill clears that hurdle, at least through September.

One of the principal advantages of COBRA is that you get to keep your current physicians and health-care providers. If you’ve already met your deductible for the calendar year, maintaining your workplace insurance might be even cheaper compared with other plans, experts say.

Other insurance options to the unemployed comprise Medicaid and shopping for a plan on the Affordable Care Act’s market .

Medicaid can make sense if you anticipate your financial problems to remain for quite a while and will also leave you with no monthly premiums.

Meanwhile, some jobless Americans may qualify for a free market plan on the ACA, or Obamacare, trade, following modifications made in the latest stimulus package. By way of instance, in case you collected unemployment insurance at all during the year, you can qualify for a free silver program.

Not only won’t you need to pay a premium, but also your flat-rate costs may be minimal, also.

“As a result, a marketplace plan may be a better deal for you,” said Edwin Park, a research scientist at the Georgetown University McCourt School of Public Policy.

If I register for COBRA, what will my choices be at the end of September?

Unfortunately, there is not a fantastic reply to this yet.

Currently, the government has not said it provides people who make the most of their COBRA subsidy a particular registration period at the end of September, except in narrow circumstances. (Special registration periods make it possible for people to register for health insurance programs on the marketplace outside of the standard window.)

Elected officials have written this month into the U.S. Department of Health and Human Services Secretary Xavier Becerra, requesting him to make a special enrollment period once the subsidy expires.

If one isn’t set up, they warn,”this will leave many consumers without a realistic option to find affordable coverage until the Open Enrollment Period for plans beginning in 2022.”

Running to problems obtaining the new COBRA subsidy? Please email me at annie.nova@nbcuni.com

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