The current economic turbulence and uncertainty, caused in large part by the business reaction to COVID-19, has forced employers to rethink how they manage benefits for workers who suffer job loss (including—aside from termination of employment—layoffs, temporary furloughs, and leaves of absence). One of the key benefits (other than cash) provided to employees who suffer job loss is continued healthcare coverage.
Of course, COBRA gives terminated employees the ability to continue coverage generally for up to 18 months after a termination or reduction in hours of employment. However, COBRA coverage is costly—qualified beneficiaries must pay 102% of the full cost (employer and employee cost) of coverage. Congress is considering some type of legislated subsidy for COBRA coverage (as happened during the economic challenges in 2009). But for now, the cost of COBRA coverage is a big issue.