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ACA SEP: COVID-19 Opens New Opportunity with Employer Coverage Ending

The impact of COVID-19 has had on the workforce is staggering. In less than one month more than 15% of American workers have been displaced, outpacing the worst month of the Great Depression, according to the Department of Labor. In the week ending April 4th, 6.6 million Americans filed for unemployment insurance.

A total of 16.8 million people have filed for unemployment benefits in the last three weeks.

One very large concern for Americans facing layoffs: health insurance.

What are the options for those who lose their job? Can they keep their current plans, can they apply for metal tier plans (also known as Obamacare plan or ACA plan), or could they qualify for Medicaid? In most cases, employees losing their jobs can maintain their current plan through COBRA but it could be expensive. The loss of health insurance due to loss of employment does qualify for a 60-day special exemption through the ACA, and depending on your client’s income, they could qualify for a subsidy to help reduce the costs. Depending on your state, your client could possibly qualify for Medicaid.

What are my client’s options?

If your client loses their job and their coverage, they will have 3 options. This is an amazing opportunity for you to make outreach to your book of business and inform clients about this SEP opportunity, and verify their employer-sponsored coverage has not ended.

COBRA

COBRA will allow clients to continue the insurance they had with their employer, but they will be responsible for paying the entire premium. With job loss hitting households, budgets will unlikely allow for families to afford the entire premium on health insurance plans. It’s also important to remind your clients if they select COBRA they will be unable to switch and enroll in an ACA plan later (e.g., if they decide the premium payment is too expensive) unless there is an additional qualifying life event.

Affordable Care Act: Metal Tier Plans

The Affordable Care Act allows Americans to have access to affordable health insurance plans based on their income-level. ACA plans have 8 essential health benefits and provide 100% coverage on all preventive services. While some networks and provider participation can be limited, it can be very low-cost for your clients and their families. Based on the FPL (Federal Poverty Level), your client not only could receive a premium subsidy (lowering the cost of the premium), as well as a cost-sharing credit (assisting with the out-of-pocket and coinsurance expenses).

Marketplace subsidies and Medicaid-eligibility depend on income and household size. Below is a table of eligibility in the Marketplace based on income in states that have expanded Medicaid, which include: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, D.C., Delaware, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Maryland, Maine, Michigan, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Dakota, New York, Ohio, Oregon, Rhode Island, Utah, Virginia, Vermont, Washington, and West Virginia.

One Person Household Two Person Household Three Person Household Four Person Household
If monthly household income is $1,467 or less:

Apply for Medicaid

If monthly household income is $1,982 or less:

Apply for Medicaid

If monthly household income is $2,497 or less:

Apply for Medicaid

If monthly household income is $3,013 or less:

Apply for Medicaid

If annual house income is:

$17,609 – $51,040

Enroll in Marketplace

You will qualify for a subsidy

If annual house income is:

$23,791 – $68,960

Enroll in Marketplace

You will qualify for a subsidy

If annual house income is:

$29,974 – $86,880

Enroll in Marketplace

You will qualify for a subsidy

If annual house income is:

$36,156 – $104,800

Enroll in Marketplace

You will qualify for a subsidy

If annual house income is

$51,040 or higher

You won’t qualify for a subsidy

If annual house income is

$68,960 or higher

You won’t qualify for a subsidy

If annual house income is

$86,660 or higher

You won’t qualify for a subsidy

If annual house income is

$104,800 or higher

You won’t qualify for a subsidy

Note: The exception to the table is California, as California has added new subsidies for middle-income individuals and families. Refer to Covered California, as individuals making up to $75,000 may qualify for a subsidy.

Medicaid

Each state’s guidance on Medicaid eligibility varies, and this may be a free or lower-cost option for your clients. If your client qualifies for Medicaid, based on the FPL and your state’s qualification rules and regulations; check and see if your Department of Health & Human Services has set up and online enrollment tool.

For ease of access, we’ve created a quick reference for you! Below is a table of eligibility based on income in states that have not expanded Medicaid, which include: Alabama, Florida, Georgia, Kansas, Missouri, Mississippi, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Wisconsin, and Wyoming.

One Person Household Two Person Household Three Person Household Four Person Household
If monthly household income is $1,063 or less:

Apply for Medicaid

If monthly household income is $1,436 or less:

Apply for Medicaid

If monthly household income is $1,810 or less:

Apply for Medicaid

If monthly household income is $2,183 or less:

Apply for Medicaid

If annual house income is:

$17,609 – $51,040

Enroll in Marketplace

You will qualify for a subsidy

 If annual house income is:

$23,791- $68,960

Enroll in Marketplace

You will qualify for a subsidy

If annual house income is:

$29,974 – $86,880

Enroll in Marketplace

You will qualify for a subsidy

If annual house income is:

$36,156 – $104,800

Enroll in Marketplace

You will qualify for a subsidy

If annual house income is:

$51,040 or higher

You won’t qualify for a subsidy

If annual house income is:

$68,960 or higher

You won’t qualify for a subsidy

If annual house income is:

$86,660 or higher

You won’t qualify for a subsidy

If annual house income is:

$104,800 or higher

You won’t qualify for a subsidy

Note: Since these states did not expand Medicaid, some people might fall into the Medicaid Gap, where they make too much to qualify for Medicaid and too little to qualify for a Marketplace subsidy. A good alternative to consider during this time, discuss short-term medical and minimum essential coverage options.

Now is a great opportunity to be of service to families that are in need and confused. With the coronavirus impacting areas and requiring hospitalization in many cases, it’s imperative to ensure your clients are covered in the event they receive a positive diagnosis. For supplemental benefits, you can learn more about adding hospital indemnity plans to your portfolio.

Learn more about this SEP, carriers providing subsidy-eligible plans in your market, hospital indemnity plans, and how to start your contribution marketing campaign with individuals in your book of business – give us a call at 800-962-4693.

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