HealthCare Options for Unemployed Workers
How President Biden's executive orders could affect health care coverage and the way we address the pandemic.
There are new incentives and opportunities to get health care insurance for workers who lost their jobs and employer-sponsored health care during the COVID-19 pandemic.
The Commonwealth Fund estimates nearly 15 million Americans are without health insurance and 7.7 million of them lost their coverage when they lost their jobs. Some of these workers have already obtained coverage through Medicaid and the Affordable Care Act (ACA) marketplace or by purchasing short-term health insurance.
If you have employees you've been unable to keep on the payroll, here are a few options for them to explore for obtaining health insurance.
Normally, the ACA Marketplace is only open for new health insurance coverage each year from Nov. 1 to Dec. 15 or if the applicant has recently experienced certain life events, such as getting married, having a baby or losing health coverage from previous employment.
However, one of President Joe Biden's executive orders was to temporarily reopen the ACA Marketplace (Obamacare) from Feb. 15, 2021 to May 15, 2021 for people without health insurance who live in one of the 36 states where HealthCare.gov is available.
Individuals who live in states where HealthCare.gov does not operate can apply and enroll in coverage through the marketplace websites established and maintained by five states, including California, Massachusetts and New York, and the territory of Puerto Rico.
Short-term health plans usually have much cheaper monthly premiums than ACA-compliant plans because they can deny coverage to people with preexisting health conditions, impose higher cost-sharing and exclude entire categories of services. Some short-term plans cover COVID-19 treatment, while others do not.
Congress defines people who have short-term plans as uninsured. Short-term plans usually are a better fit for healthy people who only need catastrophic coverage for a few months until they can afford better coverage.
COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act of 1985, is a federal law that guarantees employees who lose their employer-sponsored health coverage, mainly because they’ve lost their job, can keep it for up to 18 months.
However, employers are no longer subsidizing the cost, which makes the COBRA premium prohibitively expensive for many unemployed people. However, under a provision of the $1.9 trillion stimulus package, the government would pay for former employees to maintain health coverage from their old job through COBRA.
Trillion Dollar Stimulus Plan
President Biden's $1.9 trillion stimulus plan features a section that will affect health care in two ways. It will:
- Make upper-middle-income Americans eligible for premium subsidies on Obamacare marketplaces.
- Increase the financial help that already goes to lower-income enrollees.
The stimulus plan tackles one of the ACA's biggest weaknesses: affordability. A 2018 survey of uninsured Americans and those with Healthcare.gov plans showed that 42 percent of those who shopped for individual market coverage found it “very difficult or impossible to find an affordable plan.”
Current law limits premium subsidies to those earning less than 400 percent of the federal poverty line which is $51,520 for an individual and $106,000 for a family of four in 2021. Anyone who is above that earning level will pay significantly more for coverage.
The Biden plan removes, for two years, the income cap currently in place, and creates a new cap — 8.5 percent of an individual or family's income on premium contributions — for midlevel health plans. While it's not expected to attract more Americans who need insurance, it might reduce premiums for those who are already spending 15 percent or more of their income on premiums. The Center on Budget and Policy Priorities estimates that a family of four earning $110,000 would see monthly premiums for a midlevel health plan fall from $1,529 to $779.
The Biden plan recommends increasing the tax credits to lower health premiums or even "eliminate" them. For example, someone earning 150 percent of the federal poverty line ($19,140 for an individual), would go from paying as much as 4 percent of income for a midlevel health plan to paying nothing.
In the spirit of the Biden presidential campaign's promise to create a "Medicare-like public option" to expand coverage, Sens. Michael Bennet, D-Colo., and Tim Kaine, D-Va., are working to reintroduce their Medicare-X Choice Act. The plan would set up a Medicare public option for individuals and small businesses, initially in areas with limited access to coverage and then nationwide by 2025.
However, both Biden and House Speaker Nancy Pelosi, D-Calif., have said they oppose Medicare for All, and Republicans, who have resisted efforts to increase government involvement in health insurance, will likely block the proposal in the Senate.
Still, now that Democrats control the White House and have a slim majority in Congress, they expect to continue working to strengthen Obamacare through the Stimulus Act and in other ways.
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In this issue:
Pandemic Fears Are Changing Employee Benefit Preferences
Federal Government Allows 401(k) Distributions for Birth or Adoption
Individual vs. Group Long-Term Care Coverage for Employees
HealthCare Options for Unemployed Workers
COVID-19: Do You Have Liability?