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COBRA coverage strategy

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  • COBRA coverage strategy

    I will be leaving my current employer June 30. I will be starting benefits with my new employer on either August 14 or September 1. The longest time period without coverage will be 60 days. My understanding of cobra coverage is that it is basically an expensive continuation of your previous employer‘s coverage. I would pay the premiums plus some administrative costs on top. It also appears that if you accept coverage, it can be done up till 45 days out and then be retroactive so long as you pay up on the premiums. Would it be reasonable for me to roll the dice for 45 days. If we have a health need or concern, then I can sign up and retroactively enforce it. If I can’t get coverage with my new employer until September 1, that would be 60 days out and thus I would likely have to enroll just to be safe. Any thoughts on cobra coverage strategy with a gap of 6-8 weeks?

  • #2
    What I did was wait 2 months, then got a cheap plan on the marketplace for 2 months until the new health plan kicked in. Losing employer based health insurance qualifies for a special enrollment period so you can enroll outside open enrollment. This way was cheaper than getting COBRA.


    • #3
      I thought COBRA was able to be retroactive up to 60 days after you left your job? Retroactively applying COBRA sounds like it should cover you if you need it.


      • #4
        You actually have 105 - ~120 days, but I wouldn't push it past 90 days. You can easily accomplish 60 days.
        • You have 60 days from receipt of of the COBRA notice/enrollment package to elect coverage. Most companies take 10 - 15 days to deliver this.
        • Then you have 45 days to activate the coverage by making payment. The election is not binding until payment.
        • While the coverage is 100% retroactive to the loss of converge date. You will have no coverage and may have to pay for any services while floating on this retroactive coverage.
        • You will most certainly have to pay up front for prescriptions and other products. How your providers deal with loss of coverage will vary.
        • Where I live very few standard providers require up front payments. I have floated on COBRA coverage more times than I want to admit and have yet to pay up front.
        • For an extra measure of protection and to calm a nervous family members. Who fears you might get hit by a bus*, lightening, etc.. You can complete the election and payment in separate envelopes with instructions to mail on specific dates (a week - two before the respective deadlines.
        • The last couple of times in the last 15 years I lost coverage. Online election/payment was available. I created accounts and provided two different family members with detailed instructions, dates and login credentials.
        *Twenty years ago, I spent 75% - 80% of two years in Buenos Aires coordinating a project for the Argentine government. Like many European countries, many of the streets are narrow with very narrow sidewalks. The buses literally barrelled down those streets. I was convinced they were trying to take pedestrians out.