COVID-19 Impact on COBRA

The potential loss of health insurance is just one of the challenges arising out of the spread of COVID-19. But it’s one that can have an impact on multiple areas of a person’s life: physical, financial and emotional. With 40 million Americans having filed for unemployment benefits, as a result of the pandemic, there has been a corresponding spike in the numbers of those facing a potential health insurance crisis.

Hospitals and other providers that have treated COVID-19 patients should be aware that many of these patients may be eligible for federal benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

COBRA, enacted in 1985, requires employers to let an employee keep his or her current health insurance plan for up to 18 months after a change in job status. COBRA keeps employees insured in the wake of a job loss or voluntary departure, reduction in hours, furlough or similar event.

Private employers with at least 20 workers and an active health plan are required to make COBRA available. To maintain one’s insurance through COBRA, the employee must pay the entire insurance premium, including the portion previously paid by the employer. While this can be expensive, it can be cheaper than being uninsured for those without other options, such as getting on a spouse’s plan or finding one through the federal Health Insurance Marketplace.

Emergency Changes to Program

As part of the federal government’s response to the pandemic, President Trump on March 13 signed a national emergency proclamation extending deadlines for complying with various requirements and deadlines relating to employee benefit plans and back dated to March 1. This extension is likely to make more individuals eligible for COBRA, resulting in increased reimbursements to hospitals., the website for the federal health insurance exchange, has a page devoted to guidance on marketplace coverage amid the COVID-19 pandemic. It includes information for those with COBRA coverage, as well as those with other insurance challenges related to the coronavirus.

An April 15 story in Business Insider offers step-by-step directions for individuals interested in getting COBRA insurance:

1. Leave a company with 20 or more employees, or have your hours reduced. Unless your job loss or reduction in hours is because of “gross misconduct,” or your company’s health plan is no longer active, you are eligible for COBRA coverage.

2. Wait for a letter in the mail. This can take about 45 days; if you don’t want to wait, you can contact your company’s plan administrator. Be prepared, as this could take longer due to the rise in unemployment. It will be important to be proactive with employers to make sure they are sending out the election packets out as they also they also will have flexibilities due to COVID-19 national emergency.

3. Normally a recipient must elect within 60 days to receive coverage. The 60-day count begins after you receive your election notice. If your spouse or dependents were covered under the company plan, they also will be covered by COBRA. Due to COVID-19, the department of labor and the Employee Benefits Security Administration released flexibilities that will allow the COBRA election period to extend 60 days beyond the date the state of emergency ends.

4. Make a payment within 45 days. Failure to pay the first month’s premium within 45 days of mailing your election form could cost you the ability to receive COBRA coverage. Otherwise, you’ll be covered retroactively.

How Parallon Can Help

For hospitals, eligibility programs are a critical step in the revenue cycle process. Failure to optimize eligibility efforts can lead to suboptimal support for vulnerable populations, as well as uncompensated care and lost revenue. Especially during healthcare crises like the current one, hospitals’ revenue cycle departments should look beyond Medicaid to other reimbursement programs, including COBRA, for which patients may be eligible. Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) are also possibilities, as is third-party liability insurance.

Parallon can help hospitals determine patients’ eligibility, take advantage of extended deadlines and find a source for reimbursement. That’s a valuable resource for those that already may be overwhelmed by the challenges of pandemic-related healthcare.

Parallon’s eligibility team can work with you to find all alternative sources of reimbursements, including state-specific programs, while navigating the complexities of these programs and understanding the nuances of eligibility.