Big (but Temporary) Changes to COBRA

Have you or a loved one lost your employer-sponsored health insurance as a result of COVID-19?  If so, you are not alone.  According to an August 26 report by CBS News, it is estimated that more than 12 million people have lost their health insurance during the coronavirus pandemic.

Evaluating your choices after losing employer-sponsored health insurance can be difficult.  As a reminder, COBRA, the Consolidated Omnibus Reconciliation Act, gives workers and their dependents the right to continue health benefits provided by their former employer’s plan for up to 18 months in most circumstances.

A recent change to COBRA rules may help people who have lost coverage.  As a result of the pandemic, the Department of Labor has extended the period of time a person may elect COBRA coverage from 60 days to effectively 120 days after the COVID pandemic is no longer considered a national emergency.  That is a significant change!  The national emergency was declared on March 1, and at this time, there is no end date in sight.

What does this mean?  If a person did not specifically “opt-out” of COBRA coverage at the time of separation, and they lost their employer health insurance on or after March 1, they can still elect COBRA anytime if they are currently without health insurance.  Until four months after the national emergency declaration is lifted, there is no deadline to retroactively get COBRA coverage.  The significant caveat is that they must pay all the COBRA premiums going back to their date of separation.  While that is likely an expensive proposition, this could be useful if someone has been without coverage and now is facing a serious or expensive illness.

If you have lost employer-based coverage, it is important to examine all of your choices, including switching to a spouse’s plan if possible, applying for coverage through the Affordable Care Act, purchasing a short-term health care plan, and even Medicaid (if applicable).  Also, while the COBRA deadline may have changed, you are still subject to a 60-day time frame if you want to sign-up for new coverage on your state’s health insurance marketplace after leaving your employer.  While navigating health insurance options is difficult at best, having more time to determine if COBRA is appropriate during the pandemic can serve as a safety net under certain circumstances.

There have been a head-spinning number of rule changes this year, so maybe that is the reason that this COBRA change has received very little coverage in the media, but we thought it was important to bring it to your attention.

We understand how important health care decisions are to your overall financial health and would be happy to discuss your particular situation if you have any questions.

This article contains general information that is not suitable for everyone. The information contained herein should not be constructed as personalized investment advice. Past performance is no guarantee of future results. Reading or utilizing this information does not create an advisory relationship. An advisory relationship can be established only after the following two events have been completed (1) our thorough review with you of all the relevant facts pertaining to a potential engagement; and (2) the execution of a Client Advisory Agreement. There is no guarantee that the views and opinions expressed in this article will come to pass.  Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.

Strategic Wealth Partners (‘SWP’) is an SEC registered investment advisor with its principal place of business in the State of Illinois. The brochure is limited to the dissemination of general information pertaining to its investment advisory services, views on the market, and investment philosophy. Any subsequent, direct communication by SWP with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of SWP, please contact SWP or refer to the Investment Advisor Public Disclosure website (www.adviserinfo.sec.gov).

For additional information about SWP, including fees and services, send for our disclosure brochure and Client Relationship Summary as set forth on Form ADV from SWP using the contact information herein. Please read the disclosure brochure carefully before you invest or send money (http://www.stratwealth.com/legal).

Investments
ESG Investing: Is It Right For You?
I have always been an avid outdoorsman, spending much of my free time camping and hiking in the mountains. And over the years, I've looked for ways to incorporate these interests into my investment portfolio. When I was younger, I did this by investing in companies related to the outdoor industry. However, today technology has made it possible to take a much more impactful approach through ESG investing.
Read More
Current Events
Should I Stay or Should I Go?
There’s no sugarcoating it; the current state of the markets has many of our clients thinking like the 1981 punk rock classic by The Clash: Should I stay or should I go now? If I go, there will be trouble And if I stay it will be double So come on and let me know Should I stay or should I go?* I don’t suspect that the song was meant as a commentary on portfolio management strategies. (In fact, the band has never disclosed any real meaning to the lyrics.)  Nonetheless, I do think it provides an appropriate framework for examining today’s investment world. So, let’s take a look at the cases for “going” and for “staying.”
Read More
Financial Planning
Money Lessons from SWP Wealth Advisors
In honor of Financial Literacy month in April, SWP Wealth Advisors shared money lessons they have learned throughout their lives.  In this piece, you will find a compilation of these lessons.
Read More