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1 1 (April 28, 2020)

handle is hein.crs/goveaxz0001 and id is 1 raw text is: Congressional Research Servke April 28, 2020 Health Insurance Options for Terminated Employees Many Americans have health insurance coverage that is provided through an employment setting. In light of the economic repercussions of the COVID-19 pandemic, many Americans may be terminated from jobs through which they receive health insurance. Such individuals may need to identify another source of health insurance to remain enrolled in plans that cover COVID-19-related services. Three potential comprehensive coverage options for terminated employees include the Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage, individual health insurance coverage, and Medicaid. An individual's eligibility for these coverage options depends on a number of factors (e.g., economic circumstances, family composition, federal/state policies). Even if an individual is eligible for such coverage, the costs associated with some options may be prohibitive given the individual's loss of income due to unemployment. This In Focus provides a brief overview of eligibility, benefits, and costs associated with these different health insurance coverage types. It primarily discusses coverage options for terminated employees who can no longer access their former employer-sponsored health insurance. For married couples in which one spouse's termination results in the loss of his/her (or his/her family's) health insurance coverage, the spouse (or family) may be able to enroll in coverage through the other spouse's employer if the other spouse is working and his/her employer offers health insurance coverage. In general, employers offering health insurance benefits to their employees are obligated to offer employees who were enrolled in coverage (not sponsored by the employer) a special enrollment period (SEP) in the event that the employee (and/or family) loses his/her other coverage and meets certain criteria. COBRA Continuation Coverage COBRA continuation coverage provides terminated employees, their spouse, and their dependent children with temporary access to a former employer's health insurance. Eligibility To be eligible for COBRA continuation coverage, an individual must satisfy the following criteria: (1) work (or be the spouse/dependent child of someone who works) for an employer that must offer COBRA continuation coverage, (2) experience a qualifying event, and (3) be covered by his/her former employer's sponsored health plan on the day before the qualifying event occurs. All employers that sponsor health insurance benefits are subject to COBRA requirements, except employers with fewer than 20 employees; church plans; and federal, state, and local governments. In general, most large employers will be subject to COBRA requirements as a result of being subject to the employer shared responsibility provisions, which incentivize large employers to offer health insurance coverage to their full-time employees. For COBRA purposes, an employee's termination for any reason other than gross misconduct is considered a qualifying event for the former employee and his/her spouse or dependent child if such event causes a loss in the former employer's sponsored coverage. A qualified individual must be allowed to elect COBRA coverage within (at least) 60 days from the later of two dates: the date coverage would be lost due to the qualifying event or the date the beneficiary is sent notice of his/her right to elect COBRA coverage. Coverage COBRA coverage must be identical to the coverage available to similarly situated active employees. This is often the same coverage that the individual had prior to the qualifying event. For terminated employees, coverage generally may last for at most 18 months. Employees may terminate their coverage at any point, and employers may terminate COBRA coverage early for specified reasons (e.g., an employer ceases to maintain any group health plan due to going out of business). Employers are not required to pay the cost of COBRA coverage, though they may choose to do so. As such, COBRA continuation coverage may be more expensive than other coverage options. Employers are permitted to charge the covered individual 100% of the premium (i.e., both the portion paid by the employee and the portion paid by the employer), plus an additional 2% administrative fee. Individual Health Insurance Coverage Individuals and families may purchase individual health insurance coverage directly from an issuer in the individual market. The individual market includes the health insurance exchanges (marketplaces), but individuals also can purchase coverage outside of the exchanges. Eligibility In general, individuals may purchase individual health insurance coverage sold in the state in which they reside. For exchange coverage, state residents also must be citizens or have other lawful status, and they must not be incarcerated (except those pending disposition of charges). https://crsreports.cong ress.gov

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