The Trump administration recently released guidance that will allow the newly unemployed to retroactively opt into COBRA months from now, which could increase the risk of adverse selection and thus harm fully insured and self-funded employer plans’ risk pools. With millions of Americans suddenly unemployed, and employers reeling from sudden drops in revenue, a coalition of large companies is lobbying for the federal government to subsidize employer plans’ COBRA benefits.
Meanwhile, a proposal passed by the House would have the federal government pay full COBRA premiums for approximately nine months, making the program free to anyone eligible for it. That plan, included in the Heroes Act (H.R. 6800), could be a boon to employers and insurance carriers, but it faces challenges in the Senate and could harm individual insurance markets.