Democrats Propose Paying For Laid-Off Workers' Health Care

By Emily Brill
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Law360 (April 14, 2020, 7:01 PM EDT) -- House Democrats introduced legislation Tuesday that would pay for workers who have lost their jobs due to the coronavirus pandemic to stay on their employers' health insurance plans for up to 15 months.

A House Education and Labor Committee staffer confirmed that Democrats will push to include the measure in the next coronavirus relief package after Congress' break ends May 4.

If the bill becomes law, the federal government would cover 15 months of premiums for workers who stay on their employer's health plan after a layoff, furlough or reduction in hours that occurred on or after March 1.

When Americans leave their jobs, they're allowed to stay on their employer's health plan for up to three years. This extension is called COBRA coverage, because Congress authorized it through the Consolidated Omnibus Budget Reconciliation Act of 1985.

Although Americans receiving that coverage get the same health insurance they did before, they pay more for it, because their former employer is no longer funding part of it.

The increased costs often prove prohibitively expensive, deterring workers from signing up for COBRA coverage, House Democrats said Tuesday.

They said that by fully subsidizing 15 months of premiums for COBRA coverage, they hope to encourage people to sign up.

"High and unaffordable COBRA premiums prevent [workers] from continuing their health coverage," said bill co-sponsor Rep. Debbie Dingell, D-Mich., in a statement Tuesday. "During a public health crisis such as this, access to quality and affordable health care is essential and critical."

Nearly 17 million Americans have applied for unemployment since the coronavirus pandemic began, according to U.S. Department of Labor data.

Since many industries hit hard by the coronavirus — such as retail, service and hospitality — often don't provide health insurance, it's unclear how many of those 17 million people lost employer-provided coverage. But a study from the Economic Policy Institute released last month estimated that 3.5 million Americans were at high risk of losing their health insurance in the last two weeks of March alone.

The House Democrats' bill, called the Worker Health Coverage Protection Act, was introduced by Dingell, Rep. Steven Horsford, D-Nev., and Rep. Bobby Scott, D-Va. It promises to subsidize COBRA coverage for 15 months or until workers enroll in another health insurance plan. In its current form, it also promises that workers will get access to the Affordable Care Act marketplace through a "special enrollment period" after their subsidized COBRA premiums run out.

The bill would require employers to issue "clear and understandable written notices" informing workers of their COBRA coverage options. It would commit the U.S. Department of Labor to providing guidance on how to construct those notices.

It would also require the agency to "conduct an outreach campaign to raise awareness to workers, employers, plan administrators and others of the availability of premium reductions."

Dingell, Horsford and Scott said the Worker Health Coverage Protection Act is modeled after 2009's American Recovery and Reinvestment Act, the stimulus package enacted by former President Barack Obama in response to the Great Recession.

--Editing by Stephen Berg.

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