How Does The ACA Impact COBRA?

Share this Post:

The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows individuals and their dependents to maintain their employer or group healthcare coverage after a certain qualifying event has occurred, like termination of employment or reduction in work hours, for a set period of time. Under COBRA, individuals are required to pay for the entire cost of the healthcare plan–employer plus employee contributions–plus a 2% administrative fee.

The Patient Protection and Affordable Care Act (ACA), passed in 2010, does not change the availability of COBRA continuation coverage, nor does it change the cost of COBRA to individuals. The ACA does, however, provide individuals who qualify for COBRA more affordable healthcare options.

Marketplace Open Enrollment

Individuals who initially qualify for COBRA continuation coverage during the ACA annual open enrollment period (November 1, 2018 - December 15, 2018) may sign up for healthcare through the federal or their state marketplace. Individuals who already have COBRA coverage may elect to enroll in a marketplace health plan during the open enrollment period. Applying for healthcare through the marketplace may allow an individual to qualify for Medicaid or the Children’s Health Insurance Program (CHIP). It may also allow an individual to get monthly premium reductions or lower out-of-pocket costs, benefits not available to those who elect COBRA continuation coverage.

Other Marketplace Options

Individuals who initially qualify for COBRA outside of the healthcare open enrollment period can still apply for healthcare through the marketplace during a special enrollment period (60 days following a qualifying event). Expiration of COBRA coverage also allows individuals to qualify for the special enrollment period.

It is important to note, however, that voluntarily dropping continuation coverage, or not paying COBRA premiums, are not considered loss of or expiration of coverage. Therefore, individuals who qualify for COBRA coverage outside of the healthcare marketplace open enrollment period should consider their options carefully. If you decide to take COBRA continuation coverage you may have to keep that coverage until the next open enrollment period begins.

So, while the ACA does not change the availability of COBRA continuation coverage, nor does it change the cost of COBRA to individuals, it does offer some other options to those who become eligible for COBRA coverage.

How RedQuote Can Help

If you want to learn more about available marketplace plans, RedQuote will help you compare the benefits and costs of your previous or current COBRA coverage with individual health plans currently available through the marketplace. Together, we can explore the options to find the right plan for your budget and family. Don’t hesitate to contact us today.

---

Published Sep 5, 2018.