Welcome to FAT Tuesdays, a weekly series featuring the BEST Financial Advice Tips each and every Tuesday throughout the month of April. This series offers quick and dirty financial hacks to help you get your finances in check and help you “move on down the road” to true financial freedom. This week, we’re tackling COBRA premiums, mainly how to reduce these payments without sacrificing the comprehensive health care coverage that you need and want.
Maybe you were one of the 7.7 million employees laid off in the wake of Covid-19. Or perhaps you were fortunate enough to keep your job but suffered a reduction in hours that resulted in the loss of your health benefits. Or maybe you made the choice to leave your job because, pandemic or not, it was time to move the hell on.
However you got here, you are now here and facing the exorbitant costs of COBRA.
But take heart. There are ways to reduce that COBRA premium so that you never have to choose between great health care coverage and, well, all of your other bills.
1. Unlock your COBRA subsidy.
Did you know that the recently-passed stimulus bill includes 100% subsidies for COBRA payments? We didn’t either until a very good friend who’s “in the know” kindly informed us. The American Rescue Plan Act (ARPA) contains a subsidy for laid-off workers and their covered relatives beginning April 1st and continuing throughout September 30th, 2021. In other words, if you got laid off in the past year or so, you may very well qualify to have your entire COBRA payment covered from now until the end of September!
This assistance is also available to employees whose hours were reduced, thus making them eligible for COBRA coverage.
To find out if you qualify, reach out to your health plan administrator or your HR benefits counselor.
2. Get Your ACA on!
If you don’t qualify for the COBRA subsidy, don’t fret. You can always go shopping in the Affordable Coverage Act (ACA) Marketplace for a cost-effective plan that comes with built-in consumer protections such as the highly lauded elimination of coverage refusal or prohibitively expensive coverage for individuals with pre-existing conditions.
Additionally, ACA offers financial assistance for qualifying individuals that reduces or completely eliminates the cost of the premium.
Check out healthcare.gov to find out more about available plans in your area.
3. Exercise Your Independence.
Yet another option is to explore independent health insurance plans. These policies are available outside of the ACA Marketplace and, as such, may not come with the same protections as ACA policies. However, this is still a great option for finding affordable coverage at rates that are more competitive than those offered by COBRA. If you go this route, you may want to go through a knowledgeable insurance agent who can help you find the right plan quickly and efficiently.