COVID-19 Insurance Options

The Covid19 Pandemic has caused some to rethink the decision to go without health insurance. Layoffs or reduction of work hours have limited individuals’ ability to pay their health insurance premiums. Employers are facing tough decisions about continuing employees’ health insurance and other benefits.

CA Governor Newsom issued the “shelter in place” rule on March 18th, a few very long weeks ago. We have all heard about a $2 Trillion aid package, some of which is expected to soon trickle down to small businesses and individuals. But, bills are coming due and decisions need to be made.

The CA insurance commissioner has requested that all insurance carriers extend a 60 day grace period to insureds. This is only a request. Our multi-faceted insurance system does not allow one or two simple sentences to explain health insurance premium options, as it all depends on the source of the health insurance. I will break it down by category:

Employer Sponsored Health Plans: If insurance comes through your employer and you continue to be employed, there should be no change. If your employer is applying for Covid19 help under the aid packages, it is likely your insurance and employment will continue unchanged as well.

If you have been laid off or hours are reduced below the minimum eligibility for the health plan, you will have the option to continue under COBRA continuation rights. This would require you to pay the full premium plus 1-10%. Following termination or reduction of hours, you will receive a notice explaining this option, including the rates. You will have 60 days from the date of the notice to elect this coverage.

COBRA benefits could be especially valuable if you have already met the calendar year deductible or out of pocket maximum levels of your plan and no longer have any out of pocket expenses.

However, if you aren’t working, paying COBRA premiums isn’t likely to fit into your budget. Covered CA could be a valuable safety net. Loss of employer sponsored coverage creates a Special Enrollment Period (SEP). Be careful to understand that if you are showing little or no income at this time, you must update your income should it change. All subsidies are reconciled at the end of the 2020 tax year and if you earn more than the thresholds for your family size, you could be required to return any subsidy.

If your current income is zero or below 100% of the Federal Poverty Level, it’s likely your application will be referred to MediCAL.

Individual Coverage- On the Exchange: If you are currently covered through Covered CA, you may wish to update your income. Your premium cost share will then be adjusted to reflect your income. You have a 90 day grace period to pay premiums if currently insured. Be cautious. If you leave the Exchange with a plan that is arrears, and you wish to re-apply next year you may find that you need to bring the policy current.

Open Enrollment for the Exchange is extended to June, and available at www.coveredca.com or 800-300-1506. The phones have not been consistently operational, so online enrollment is likely the most appropriate.

It’s not a bad idea to reapply through the Exchange if your income will be dramatically reduced this year as that is the only way you will qualify for a subsidy retroactively when your tax return is reconciled.

Medicare: If currently enrolled in a Medicare Supplement, Part D Rx plan, or Medicare Advantage plan we have not had any clarification on carriers extending premium due dates past current grace period.

Employees over 65 who are either planning to retire or want to switch to Medicare at a time when many businesses are shuttered or teleworking creates a special challenge. The paperwork cannot be done electronically and requires the HR department to sign off and then it must be delivered to the local Social Security Administration office. NAHU has requested the Administration to find work-arounds that include electronic filing with the first day of the following month effective date and suspension of the Part B penalty during this emergency.

If the person has Part A and needs Part B, these forms are required to enroll and are available online: CMS L564/OMB 0938-0787 and CMS 40B /OMB 0938-1230. They can be mailed to the local Redding office, preferably by overnight or by certified mail to have proof of delivery (2660 Park Marina Dr). However, the office is closed and visitors are referred to 1-866-964-1236 for service by a sign on the door.

A simple Medicare enrollment maybe completed online at: https://www.ssa.gov/benefits/medicare/. NAHU reports that applications submitted during the month may receive a retroactive date back to the first of the month during the Covid19 situation.

Margaret R. Beck

Margaret Beck CLU, ChFC, CEBS started her insurance practice in Redding in 1978. She is the founder of Affiliated Benefit Services where businesses and individuals are assisted in choosing proper products, compliance with complex benefit laws and claims issues once coverage is placed.

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