You’ve probably seen the numbers. Week after week during the coronavirus pandemic, millions of people have been filing for unemployment. In fact, ABC News reports that, as of July 23, we’ve had 18 straight weeks in which “weekly jobless claims surpassed 1 million.” Since the pandemic began, “Approximately 50 million U.S. workers have filed for unemployment insurance,” and “at least 16 million workers are still receiving benefits.”
As you might imagine, with all of those job losses, a LOT of people are also losing their group health coverage. A new analysis by Families USA finds that “5.4 million laid-off workers became uninsured” due to job losses between February and May of this year. “These recent increases in the number of uninsured adults are 39% higher than any annual increase ever recorded,” and this is happening “during the country’s worst public-health crisis in more than a century and the sharpest and deepest economic downturn since World War II.”
In short, a lot of people are struggling right now, and many experts expect things to get worse before they get better.
As insurance advisors, we certainly have a role to play here. People need help, and brokers have a responsibility to guide consumers through their options. At AHCP, we frequently write about the different solutions available to individuals without employer-sponsored health coverage, and we can even connect brokers with many of these solutions, so please let us know if you need assistance getting appointed with some of the carriers we work with. Below is a short list of coverage options you may want to discuss with your clients.
COBRA Continuation: Employees who lose their group health coverage as a result of a layoff or reduction in work hours usually have the option to continue the coverage for themselves and their family members for up to 18 months by signing up for COBRA. COBRA provides a temporary continuation of group health coverage that is lost due to a qualifying event, and in order for a former worker to qualify for COBRA, the company must have 20 or more employees and continue to offer group health coverage. If an employer cancels the group health plan altogether, COBRA would not be available. Depending on the state, fully-insured smaller employers not subject to COBRA might offer state continuation, which is sort of like a mini-version of COBRA. During the COVID-19 pandemic, the federal government is allowing workers who lose their health coverage additional time to sign up and pay for COBRA (until two months after the end of the national emergency), so people have much longer than the normal 60 days to make this decision. During the COBRA continuation period, beneficiaries pay the full health insurance premium—the amount they were previously paying, plus the amount the employer was paying, plus up to a two percent administrative fee.
HIPAA Special Enrollment: Because COBRA requires former employees to pay the full health insurance premium without the benefit of an employer contribution, workers who lose their employer-based health coverage may want to consider signing up for their spouse’s coverage instead. HIPAA provides a 30-day special enrollment opportunity onto a spouse’s plan when someone loses job-based health coverage. People who have the option to continue their existing coverage under COBRA or join their spouse’s plan should compare the benefits and premium for both options before making a decision.
ACA Special Enrollment: Of course, the Affordable Care Act also gives people who lose their group health coverage an opportunity to sign up for individual health coverage, either through the Marketplace or in the outside market. This Special Enrollment opportunity lasts for 60 days. When discussing the various options with your clients, you should always compare the costs and benefits of an individual policy with the COBRA and HIPAA opportunities the client may have. Your clients may find that an individual health plan could save them some money. This is especially true if the client qualifies for a premium tax credit. Over the next year, more and more people will qualify for financial assistance to help them pay for their health insurance, so you’ll want to make sure that you complete the certification to sell Marketplace plans for the next calendar year so that you can assist those who do qualify for a tax credit.
Short-Term Medical Plan: Those who do not qualify for a premium tax credit may want to consider a short-term medical plan. While short-term policies were originally intended for people who expect to be without other health coverage for a short period of time, like many of the folks who are recently unemployed but looking for other opportunities, today’s short-term plans can actually provide a longer-term solution. That’s because the Trump administration changed the rules to allow short-term plans to last for up to 360 days and to be renewed for up to two additional years. While short-term plans will require applicants to answer a few medical questions and do not cover pre-existing conditions, they can provide benefits for unexpected emergencies and other common medical services. Best of all, the premium may be significantly lower than for ACA-compliant major medical plans. Short-Term health plans are able to keep their prices low by limiting what they cover. It may be a good option if you don’t need coverage for pre-existing conditions, are not pregnant or planning a family, and do not need mental health services. To learn more about how short-term plans are growing in popularity amid the COVID-19 outbreak, take a look at our May 28th blog post.
Fixed Indemnity Plan: One thing we have to keep in mind is that many of the individuals who recently lost their health coverage also lost the income they would need to pay another policy, so it’s possible that all of the above options will be outside your clients’ budgets. For that reason, it’s worth discussing some lower-priced options like fixed indemnity plans or even limited-benefit plans with them. While these policies do not provide comprehensive coverage and should not be the first choice to replace a full health insurance plan, they do provide some protection in the event of an illness or injury and are certainly better than having no coverage at all. The most attractive feature of these plans to your clients will be their low monthly premiums, so they are definitely worth discussing with clients who are looking to save some money. You might consider pairing a fixed indemnity plan with a telehealth benefit, which would give clients access to health care providers by phone, and a discount prescription card so they can save money on their prescriptions.
Health Care Sharing Ministry: Last but not least, some of your clients may want to consider a health care sharing ministry. While a health care sharing ministry is not health insurance, it does provide some protection against medical bills. These sorts of programs have grown in popularity in recent years and might be a good option for clients who do not qualify for a premium tax credit and whose medical conditions prevent them from signing up for short-term coverage.
Final Thoughts
While this is not an exhaustive list of options available to your clients, it is a good start. The main point is that everyone’s situation is a little different, and during this difficult time you should make sure that you’re discussing all available coverage options with your clients and make sure they know what type of insurance they are buying.
It’s also worth mentioning that, while this pandemic is affecting people in all states, The Hill reports that about “half of the coverage losses” we’ve seen so far have “occurred in five states: California, Texas, Florida, New York and North Carolina.” In other words, the opportunity is not the same in every location, so this might be a good time to consider getting licensed in other areas. You’re probably already working remotely, so expanding your reach to other states isn’t a bad idea.