Laid Off? Here’s the Form You Need for Free COBRA

Hospital staff working with protection mask

The latest pandemic relief bill created a federal subsidy so laid-off workers can keep their insurance at no cost through September, but it’s not automatic, and some people may not realize it’s an option until well into the six-month period. 

Key Takeaways

  • People eligible to keep their health insurance through COBRA can get their full premium cost waived through September, thanks to a temporary federal subsidy approved last month.
  • The benefit isn’t automatic, and employers have until May 31 to notify many of those eligible.
  • Workers don’t have to wait, however: There is a form you can submit now.

While the subsidy to so-called COBRA applies to premium costs between April 1 and Sept. 30, employers have until May 31 to make sure everyone knows about it, namely those employees who were laid off before April 1, according to guidance issued by the Department of Labor last week. In the meantime, people can fill out a form, available on the department’s website, submitting to the main eligibility requirements: that they had a “qualifying event” such as job loss or a reduction in hours and are not eligible for Medicare or another group health plan.

“Hopefully this will get some traction, and people will start signing up now and get these benefits as soon as possible,” said Karen Pollitz, a senior fellow at the Kaiser Family Foundation, a nonpartisan healthcare think tank.  The latest guidance on the Department of Labor’s website should help clarify things for workers as well as employers, she said—but only if the word gets out. 

While the free coverage is intended to be retroactive to as early as April 1 (it would begin on April 1 unless the employee lost their job after that,) this latest well-meaning modification to COBRA, already a tangled bureaucracy, just adds to how confounding the U.S. healthcare system can be to consumers, Pollitz said. 

The program is an enhancement to the Consolidated Omnibus Budget Reconciliation Act of 1985, better known as COBRA, which gives workers who would otherwise lose their coverage the right to continue the health benefits they got under their former employers, generally for 18 months, so long as they can foot the bill. 

Prohibitively Expensive

The problem is that the insurance bill can be prohibitively expensive, experts say, since employees have to pick up the share of the premiums formerly paid by the employer. The average cost for an employer-sponsored health plan for a family totaled $20,599 in 2019, according to a Kaiser Family Foundation analysis.That's, of course, now temporarily waived by the subsidy.

One potential downside of the delay in notification is that people who had already enrolled in other healthcare plans—through the government-run Obamacare marketplace, for example—would likely not be able to cancel that coverage retroactively in order to get the coverage through COBRA, according to the Department of Labor.  People who didn’t get COBRA right after losing their job are still eligible for the new subsidy as long as the 18-month period hasn’t elapsed.  

“It really is complicated,” Pollitz said. “And most people just can’t stand dealing with health insurance stuff. It’s way too technical and confusing, and often you are sick when you need to deal with it, so you really don’t have the wherewithal to figure it out.” 

People who wind up paying some COBRA premiums during the six-month period should call their program administrator or employer to either have their payments applied to future premiums or to get a refund, according to the Department of Labor.