Cobra question

[arnee05]

My wife and my job changes will make it necessary to get COBRA coverage for a month or 2. For our family of 4 it will, of course, be expensive. Has anyone heard of filing the cobra papers and not paying the premium unless you need it? Ive heard it can be retroactively paid/initiated if you need it for those 2 months and if no medical needs arise during that time you can get by without paying the several thousand dollars a month for coverage. I don't want to put my family at any unnecessary risk to save a couple thousand dollars nor do I want any issues with lapse in insurance coverage causing issues after we start new jobs.

Anyone have thoughts/experience with this?

[jfoxcpacfp]

arnee05 wrote:

My wife and my job changes will make it necessary to get COBRA coverage for a month or 2. For our family of 4 it will, of course, be expensive. Has anyone heard of filing the cobra papers and not paying the premium unless you need it? Ive heard it can be retroactively paid/initiated if you need it for those 2 months and if no medical needs arise during that time you can get by without paying the several thousand dollars a month for coverage. I don’t want to put my family at any unnecessary risk to save a couple thousand dollars nor do I want any issues with lapse in insurance coverage causing issues after we start new jobs.

Anyone have thoughts/experience with this?

Click to expand...

Yes, you can file for COBRA retroactively. As long as you have a short gap in coverage (less than 3 months in a row) then you will not pay the penalty for lack of coverage. That means you can go almost 3 months (2 full months as long as you have coverage for at least 1 day in the 3rd month) without coverage.

[LBKCLU]

If you are changing jobs and have not yet signed an employment contract, you should negotiate to try and have your future employer to pay for the COBRA if they will be providing you with coverage after you start working.

I'm not sure if this is your situation but it is a thought.

[EH]

This doesn't sound like a great option in case of a sudden catastrophic event, i.e. serious MVA, etc. I've just paid the COBRA cost in this situation, but do know others that have filed paperwork and not paid. I'm pretty risk adverse when it comes to not having health care though.

[arnee05]

Thanks all,

LBKCLU - I did get some COBRA compensation, trying to have my cake and eat it too.

EH - that's th crux of my question - if I chose to not pay COBRA right away and did have an urgent medical need, it sounds like it can be activated retroactively? I'm rather risk averse too with a young family but if I can get what I need anyway after the fact, why not hold off on paying the 2k cobra premium in the event that I don't need it?

[spiritrider]

You have 60 days from the date you receive  the Cobra packet from your last employer to make a COBRA election. This is usually 10 -14 days after the end of your prior coverage. You then have 45 days from the election until you have to pay  the first premiums.

So technically you could get 115-119 days before having to engage retroactive coverage. However, I would never risk such a thing. If you missed the deadlines and have a significant medical emergency your liability could be substantial. Also, as pointed out, a gap of three months or more will result in an ObamaCare penalty.

So to be safe wait a maximum of 60 days after loss of coverage before electing COBRA. You will still have the 10-14 day notice period as a safety margin. Then wait a maximum of 30 days of the payment period. You will still have 15 days as a safety margin.

NOTE: Never decline COBRA coverage, just let the time period lapse. It is never required and why preclude something no matter what the low probability of need is. For that matter electing COBRA incurs no liability. Without payment the election elapses

[arnee05]

Makes sense, thanks. My gap in coverage is 30 days, max.

[nachos31]

How does this wait and file COBRA retroactively if needed strategy work under rules from the Affordable Care Act that I interpret as requiring year-round insurance coverage?

[spiritrider]

There is a "short gap" exemption to any Obamacare penalty for lack of coverage. It is two complete months of no coverage. If you have just one day of coverage in any month, that month is considered a full month of coverage.

However, there is only a coverage gap if you do NOT elect and pay for COBRA coverage. The coverage is fully retroactive as if there was not even a one day gap.

[canadianoutlaw]

Its the time of the year where this will come up soon if it hasn't already on the Forum - any changes to COBRA or the community's position on it that we should be aware of?

I finish residency this June and have taken a job to start August 1st (academics). We'd obviously like to avoid a gap in health insurance for the month of July.

The conservative approach seems to be to 1) pay COBRA premium during that time but that the 2) loop hole still exists where one can pay retroactively if needed. Any other thoughts?

[ticker]

I did the "String out COBRA but don't pay for it" method last year. 3.5 months (had to buy a month of an Obamacare policy to avoid the tax).  I didn't need to use insurance during the gap, but ran it by a health insurance salesman who said it should work out fine.  I saved about $9k by not paying for COBRA.

So, I can attest that not using health insurance for which you are not paying works out great!

[adventure]

arnee05 wrote:

Anyone have thoughts/experience with this?

Click to expand...

I was given advice to sign the papers, sign the check, put them in an envelope by the front door. If you need it, make sure someone gets it to the mailman, otherwise, toss it in some months.

[kyleena]

Just want some clarification: If you get ill, needed to go to the emergency room and be admitted inpatient within the first 60 days after losing coverage and haven't elective COBRA yet, could you still elect for COBRA when discharged (still within first 60 days) and then pay the premium, and get the benefits for that ER visit and hospitalization? Thanks in advance for a response.

[rbc001]

Same question - are the rules previously discussed (ability to not elect for COBRA, then apply for retroactive coverage w/in 60 days if coverage is needed) still applicable?  Thanks!

[jfoxcpacfp]

kyleena wrote:

Just want some clarification: If you get ill, needed to go to the emergency room and be admitted inpatient within the first 60 days after losing coverage and haven’t elective COBRA yet, could you still elect for COBRA when discharged (still within first 60 days) and then pay the premium, and get the benefits for that ER visit and hospitalization? Thanks in advance for a response.

Click to expand...

Yes, but you'll have to pay the retroactive premiums.

rbc001 wrote:

Same question – are the rules previously discussed (ability to not elect for COBRA, then apply for retroactive coverage w/in 60 days if coverage is needed) still applicable?  Thanks!

Click to expand...

Yes, see above.