Federal subsidies for COBRA insurance are about to run out. Covered California offers help
At the end of September, roughly 138,000 Californians will lose federal subsidies that have covered the premiums for their COBRA health insurance coverage. Covered California is offering to help.
Thousands of Californians lost jobs or had their work hours drastically cut amid the COVID-19 pandemic as businesses cut back operations or shuttered completely. To maintain health insurance, they took advantage of a federal law, the Consolidated Omnibus Budget Reconciliation Act, that requires certain employers to allow them to extend their coverage.
Premiums for this insurance can be steep, however, and earlier this year, the U.S. Congress agreed as part of the American Rescue Plan Act to cover the premiums through Sept. 30.
With that cut-off date is fast approaching, leaders of Covered California announced Wednesday that they are opening a special enrollment period that will allow Californians about to lose their COBRA subsidy to sign up for an insurance plan through the state-based exchange.
The premiums will likely be much lower than the costs of COBRA, thanks to new federal subsidies for insurance plans offered through federal and state exchanges, said Covered California leaders, and many consumers will find that they can get coverage through the same insurers they had through their employer.
According to the Kaiser Family Foundation’s 2020 Employer Health Benefits Survey, the average monthly premium cost for an employer-sponsored health plan was $623 for an individual and $1,778 for a family. COBRA enrollees would have to pick up that entire bill.
At Covered California, however, individuals making less than $25,520 a year and a family of four earning less than $52,400 are paying an average monthly premium of $35, or about 5% of the average gross premium of $741, as a result of new federal assistance.
Middle-income households — those earning $51,040 to $76,560 for an individual or $104,800 to $157,200 for a family of four — are paying monthly premiums of $307. That’s about 28 percent of the gross premium.
“As California continues to grapple with the pandemic and its financial fallout, many COBRA recipients will find that financial help is critical to keeping their coverage, and that’s what Covered California offers,” said Peter V. Lee, executive director of Covered California.. “There is more financial help available to Californians than ever before to help them get covered and stay covered.”
Those who sign up through Covered California by Sept. 30 will have no gap in coverage because their enrollment would be effective Oct. 1. The special enrollment period for COBRA recipients will continue through Nov. 29, 2021.
