Americans who lost a job in the last 18 months are able to stay on or join their former employer's healthcare plan for free through Sept. 30. That provision of the American Rescue Plan Act went into effect April 1.
More than 2 million people could benefit, according to the Congressional Budget Office.
The way it works is through the federally administered program known as COBRA. If you work at a company with more than 20 employees and lose your job, you can remain on your employer-sponsored health insurance plan for 18 months through COBRA.
But under normal circumstances, COBRA can be significantly more expensive than employer-sponsored insurance because instead of your employer covering some of the premium, you pick up the tab. COBRA costs include the premium of your plan plus a 2% administrative charge, meaning that this year you could have been looking at monthly outlays of $635 if you're single or $1,800 for a family, according to Thomas Rice, professor of health policy and management at the UCLA Fielding School of Public Health.
But COBRA is now free through the end of September. Here's what you need to know.
Qualifying criteria for COBRA include any of the following: "voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce and other life events," according to the U.S. Department of Labor.
Under the relief bill, anyone is eligible who has involuntarily lost their job or health insurance or had their hours reduced within the last 18 months. A reduction in hours covers the business's change in hours of operations, a shift from full-time to part-time status, if you take a temporary leave of absence or if you participated in a lawful labor strike.
Benefits are available to all those normally insurable under COBRA, meaning you and the family members who were already on your health plan.
Who doesn't qualify?