We have received a number of questions from clients about their ability to maintain group health benefits and other employer-provided benefits for employees affected by temporary layoffs and reductions in work hours related to COVID-19. In the absence of changes in applicable law or an agreement by insurance companies to temporarily change policies, employers who are unwilling or unable to subsidize COBRA premiums may have few alternatives to assist employees in the process. case of loss of health cover. However, the fact that laid-off employees will have little means to pay COBRA premiums (or perhaps even the co-pay of regular employees even if they remain active in the group plan) may prompt the government and the insurance industry to bring relief.
In the absence of this relief, here’s how it works: When employees are made redundant, have their working hours reduced, are placed on leave or are temporarily laid off, they may cease to be considered “active employees”. in the sense of the collective health of a company. plan. In this case, employees are usually offered continuous COBRA coverage (or similar coverage under state law for very small employers), and they can stay on the health plan only if employees pay the costs. generally expensive COBRA premiums. For fully insured plans, the insurance company may refuse to pay medical bills submitted by a worker who is not authorized to remain on the plan outside of COBRA.
While self-insured plans may have some flexibility to maintain coverage in these circumstances, their stop loss insurers may impose the same conditions, and employers must obtain the written consent of their stop loss insurers if they wish to extend coverage outside of the normal plan. provisions. Employers should check their insurance policies to determine if and for how long employees who have reduced their working hours or are not actively working can remain covered by the health plan.