FREE COBRA FOR LAID-OFF RESIDENTS THROUGH SEPTEMBER 2021
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal program and is not managed by the Department of Vermont Health Access. For more information about COBRA, contact the United States Department of Labor.
What is COBRA?
COBRA is continuation health insurance coverage offered by employers with 20 or more employees. Federal law requires employers to provide this benefit. It lasts for 18 months for laid-off workers.
I’ve been laid off. How does the American Rescue Plan help me pay for my COBRA premiums?
The American Rescue Plan pays for 100% of your COBRA premiums through September 30, 2021. The federal government will pay your insurance company, or group health plan, directly.
If I enroll in COBRA, for how long will my COBRA premiums be paid?
The federal government will pay your COBRA premiums through September 30, 2021.
Does the American Rescue Plan extend my COBRA to longer than 18 months?
No. The American Rescue Plan does not extend COBRA. COBRA coverage lasts for 18 months.
I am eligible for coverage through my new job. Do I qualify for the federal government to pay my COBRA premiums through my former employer?
No. You do not qualify if you are eligible for other employer-sponsored coverage.
I quit my job. Do I qualify for the federal government to pay 100% of my COBRA premiums?
No. Only people who are laid off qualify for the federal government to pay 100% of their COBRA premiums. If you quit your job, you do not qualify. If you were fired for gross misconduct, you also do not qualify.
I was laid off and my job-based coverage ended December 31, 2020. I was eligible for COBRA but did not enroll. Can I still enroll to get free COBRA coverage?
Yes. Under the American Rescue Plan, you can enroll in COBRA if you are still within your federal COBRA 18-month coverage period—even if you did not enroll at first. Starting April 1, 2021, you can enroll in COBRA even if you didn’t enroll during your first 60-day COBRA election period when you were laid off. You can also reenroll if you dropped COBRA. The American Rescue Plan does not extend your 18 months of COBRA.
Is COBRA my only choice for health insurance after losing insurance through a job?
No. When you lose your health insurance, you have a 60-day Special Enrollment Period to get Vermont Health Connect health insurance can instead choose to enroll in a marketplace plan through Vermont Health Connect—and eligible Vermonters can also get financial help to lower health insurance premiums and out-of-pocket costs. When you choose COBRA, you may be charged up to 102% of your full COBRA premium. And although the federal government will pay 100% of COBRA premiums through September 2021, after the subsidy ends COBRA premiums will go back up.
Do payments toward my employer-sponsored coverage carry over to my marketplace plan?
No. Out-of-pocket costs typically do not carry over from employer-sponsored coverage or COBRA plans to marketplace plans. For this reason, some laid-off Vermonters might opt to turn down COBRA and enroll in a Vermont Health Connect plan, rather than waiting until October and having three separate sets of out-of-pocket costs in one calendar year.
What happens when the government stops paying my COBRA premium?
It’s a good idea to plan ahead for the end of the federal COBRA subsidy in September. You can either:
Continue your COBRA coverage for the remainder of your 18-month period—but must pay the full premium.
Enroll in a Vermont Health Connect plan. Eligible Vermonters can get financial help to lower the cost of coverage when they enroll through Vermont Health Connect.