QUESTION: Some of our COBRA participants have asked what they should do for health coverage when their COBRA premium subsidy ends. How should we advise them?
ANSWER: Health coverage options available to assistance eligible individuals (AEIs) after their subsidy period ends are described in the subsidy expiration notice provided 15 to 45 days before the subsidy’s end (see our Checkpoint article). For most AEIs, notices should have been distributed by September 15, 2021. If you haven’t yet provided them, we recommend doing so immediately. The notice explains that when the subsidy period ends (generally, on September 30, 2021), qualified beneficiaries who are still within their maximum COBRA coverage period may choose to continue their COBRA coverage for the duration of their COBRA eligibility period by paying the plan’s regular COBRA premium. Alternatively, they may have HIPAA special enrollment rights under a spouse’s plan, or they can enroll in Exchange coverage during a 60-day special enrollment period caused by the loss of the subsidy. Some individuals may be eligible for Medicare or Medicaid.
Individuals and their families should be advised to consider the available options described in the notice and make the best choice based on their circumstances. Some individuals may wish to continue COBRA coverage because they have already met their deductible or out-of-pocket maximum for the year, or because they wish to keep the same provider network or level of coverage. For other individuals, Exchange coverage may be less expensive than unsubsidized COBRA and therefore a better choice, especially if they qualify for a premium tax credit. Individuals who can obtain coverage under a spouse’s plan may find that a better solution for their family. The subsidy expiration notice highlights some factors that individuals should consider when evaluating their coverage options.
For more information, see EBIA’s COBRA manual at Sections VI.H (“ARPA Premium Subsidy”) and XXVI.N (“Health Insurance Exchanges”). See also EBIA’s Health Care Reform manual at Section XXI.A.3 (“Annual and Special Enrollment Periods Required for Exchanges”) and EBIA’s HIPAA manual at Section X.B (“Special Enrollment Rights: Individuals Who Lose Other Coverage”).
Contributing Editors: EBIA Staff.