Health insurance gamble?

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dm1898
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Health insurance gamble?

Post by dm1898 » Thu Oct 05, 2017 9:49 am

Hello bogleheads,

I've been a longtime reader, but this is my first time posting. I have a unique health insurance question that I've been struggling with and would like some feedback.

The situation is my wife is a nurse at a local hospital and our family of 4 get our medical insurance from her employer. She recently went on maternity leave when she had our second daughter. She has been on the job for less than a year and thus was not eligible for FMLA when she went on maternity leave on Sept 4th. Our medical benefits were unchanged for the duration of September, but we were informed beforehand that for October we would need to apply for COBRA benefits at the tune of $2100 for the month. Obviously this was not the best news but I had no issue paying out the full amount to be covered. I made sure my wife was in contact with the HR department leading up to the leave to be sure we would not have any issues with these benefit changes. Well despite our best efforts the HR department has dropped the ball and we are currently not covered by COBRA, and will be unable to get coverage until HR corrects the issue. We call them everyday and they really don't have an answer as to when things will be lined up.

Obviously with a newborn at home, a wife that just had a C-section, and a 1.5 year old I would like to have health insurance, but at the same time if HR doesn't get us setup with cobra until half way through the month I'm reluctant to spend the $2100. The only scheduled appointment that can't get pushed back is a routine checkup for the newborn that I'm willing to just pay the cash price on if it comes to that. We only have to make it until November 1st at which time my wife will be starting back at work and coverage will continue.

HR keeps telling my wife that even if we are not covered and have an insurance claim, that when they sort everything out we will be retroactively covered. That sounds wrong to me and I feel like it is just them trying to make us go away.

What would you do?

MP123
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Re: Health insurance gamble?

Post by MP123 » Thu Oct 05, 2017 11:16 am

Having a baby and loosing heath insurance are both Qualifying Life Events which make you eligible for special enrolment in ACA (Obamacare) plans. That might be another option besides Cobra. My guess is it might be Nov 1 before you get it all set up though...

I agree that retroactive coverage sounds a little unlikely but maybe you can talk to someone higher up in the HR dept and verify that? What if your wife should become ill and not be able to return to work? Would you still have (non-retroactive) coverage?

With a newborn and a wife with recent surgery I don't think I'd want to gamble on health insurance.

SheReadsHere719
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Re: Health insurance gamble?

Post by SheReadsHere719 » Thu Oct 05, 2017 11:28 am

dm1898 wrote:
Thu Oct 05, 2017 9:49 am
HR keeps telling my wife that even if we are not covered and have an insurance claim, that when they sort everything out we will be retroactively covered. That sounds wrong to me and I feel like it is just them trying to make us go away.
HR is actually correct on this; COBRA includes 60-day retroactive eligibility coverage. If something happened and a claim was submitted to your insurance but denied, then the onus would be on HR to correct your eligibility status and get the claim paid (provided you paid the premiums).

Since your window without insurance is < 60 days (9/4 - 11/1), you would be covered retroactively for the full period. Helpful links: https://www.cms.gov/CCIIO/Programs-and- ... a_qna.html

https://www.dol.gov/sites/default/files ... nsumer.pdf

Hope that helps.

dm1898
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Re: Health insurance gamble?

Post by dm1898 » Thu Oct 05, 2017 11:50 am

Interesting points on the retroactive issue.

So a little more to the story then....

My wife is currently on maternity leave like I said, but when she returns to work on Nov 1st she will be starting a new job. The new job is with the same hospital but in another department that will change the insurance to a different carrier. Would it still be wise to hold off and see if we have any issues, and then if not forego the coverage?

dm1898
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Re: Health insurance gamble?

Post by dm1898 » Thu Oct 05, 2017 11:52 am

Also we were covered by the regular policy for all of September as far as I know. The only month Cobra should be involved is October.

I really appreciate all of your help!

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dm200
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Re: Health insurance gamble?

Post by dm200 » Thu Oct 05, 2017 11:57 am

dm1898 wrote:
Thu Oct 05, 2017 11:50 am
Interesting points on the retroactive issue.
So a little more to the story then....
My wife is currently on maternity leave like I said, but when she returns to work on Nov 1st she will be starting a new job. The new job is with the same hospital but in another department that will change the insurance to a different carrier. Would it still be wise to hold off and see if we have any issues, and then if not forego the coverage?
Since this is a "new job", does that mean she will be treated as a "new employee" and, perhaps, not be eligible for health insurance for some waiting period?

JBTX
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Re: Health insurance gamble?

Post by JBTX » Thu Oct 05, 2017 11:58 am

dm1898 wrote:
Thu Oct 05, 2017 11:50 am
Interesting points on the retroactive issue.

So a little more to the story then....

My wife is currently on maternity leave like I said, but when she returns to work on Nov 1st she will be starting a new job. The new job is with the same hospital but in another department that will change the insurance to a different carrier. Would it still be wise to hold off and see if we have any issues, and then if not forego the coverage?
Make sure if you start Nov 1st you are eligible for insurance Nov 1st. In some cases it may make sense to start one day before the month end to be sure you are eligible for the subsequent month.

Somebody pointed out, but then deleted the post, that in theory she will be back to work before your cobra eligibility signup period runs out. You could choose to wait and if you have no medical expenses during the two months never sign up. You would have to make sure that the one month lapse in coverage does not affect your eligibility for coverage (it shouldn't but better safe than sorry). But I'd really be careful with such a strategy and make sure you can get medical care during that one month if you needed it.

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dm200
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Re: Health insurance gamble?

Post by dm200 » Thu Oct 05, 2017 12:00 pm

I would not risk it.

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HueyLD
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Re: Health insurance gamble?

Post by HueyLD » Thu Oct 05, 2017 12:11 pm

To the OP,

If you are healthy and single with no dependent, you can take the gamble and wait out the 60-day COBRA period.

However, with a high risk baby delivery and the entire family's health to deal with, $2100 is a cheap insurance. COBRA is a slow process and if any major health issue should arise and for some reason COBRA paperwork never got processed, you could end up in the bankruptcy court.

DON'T RISK IT!

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Pajamas
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Re: Health insurance gamble?

Post by Pajamas » Thu Oct 05, 2017 12:14 pm

HueyLD wrote:
Thu Oct 05, 2017 12:11 pm
To the OP,

If you are healthy and single with no dependent, you can take the gamble and wait out the 60-day COBRA period.

However, with a high risk baby delivery and the entire family's health to deal with, $2100 is a cheap insurance. COBRA is a slow process and if any major health issue should arise and for some reason COBRA paperwork never got processed, you could end up in the bankruptcy court.

DON'T RISK IT!
Delays on the part of the administrator don't affect your rights under COBRA. Health care coverage is an issue of payment. Coverage can be back-dated and that routinely happens.

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dm200
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Re: Health insurance gamble?

Post by dm200 » Thu Oct 05, 2017 12:15 pm

Delays on the part of the administrator don't affect your rights under COBRA.
Having rights is one thing. The process of being paid fully and on time is another.

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HueyLD
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Re: Health insurance gamble?

Post by HueyLD » Thu Oct 05, 2017 12:19 pm

It happened to me in the past. I signed up for COBRA, but they claimed that the paperwork was NEVER received. I should have sent the paperwork certified with returned receipt requested.

Fortunately, I was healthy and single and could afford to pay out of pocket for some unexpected (and relatively minor) illness.

I guess some people like the excitement of living on the edge.

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Epsilon Delta
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Re: Health insurance gamble?

Post by Epsilon Delta » Thu Oct 05, 2017 12:21 pm

dm1898 wrote:
Thu Oct 05, 2017 9:49 am
Well despite our best efforts the HR department has dropped the ball and we are currently not covered by COBRA, and will be unable to get coverage until HR corrects the issue. We call them everyday and they really don't have an answer as to when things will be lined up.
It is not exactly clear what happened here.

If you actually applied for COBRA and HR "dropped the ball"* it would not be surprising if when they pick up the ball it will be as if they got things right in the first place and you have had COBRA coverage from the date the employer insurance ended and they will retroactively bill you accordingly. It is not entirely clear you have to pay that retroactive bill, but if you don't things may get messy.

If you simply asked for the COBRA forms but did not formally apply then the situation is as others have described, and you can choose to retroactively apply or not according to how many health care costs were incurred.

Note that if a health care provider charged you a discounted "insured" rate if you decide to decline the insurance they may retroactively increase the bill.

* Or if they didn't "drop the ball", but simply moved the ball along the strange path that it's supposed to follow.

dm1898
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Re: Health insurance gamble?

Post by dm1898 » Thu Oct 05, 2017 1:20 pm

So the new job actually begins on Oct 30th, and from what we understand she will be eligible for medical insurance immediately.

What took place with HR is that they were supposed to have the COBRA paperwork ready to go for October 1st. They did get us signed by Oct 1st but they failed to include my wife and the new baby on the plan. So basically I could sign up for COBRA right now but it would only cover myself and my older daughter. We are waiting for them to correct that and get the paperwork together so the whole family can be covered.

It seems the process is all online now, so once they have us confirmed in the system I can just go on and pay the premium and begin coverage. So barring any major accidents or issues, if we have a reason to go to the hospital theoretically I could just log in and make the payment to activate it?

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Pajamas
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Re: Health insurance gamble?

Post by Pajamas » Thu Oct 05, 2017 1:23 pm

dm1898 wrote:
Thu Oct 05, 2017 1:20 pm

It seems the process is all online now, so once they have us confirmed in the system I can just go on and pay the premium and begin coverage. So barring any major accidents or issues, if we have a reason to go to the hospital theoretically I could just log in and make the payment to activate it?
Yes, and it could even be after the fact as long as the deadline hasn't passed, but you need to make allowances for any problems like your payment method being rejected. That's where it could get sticky.

People play this game with COBRA all the time, but there is a slight possibility that they have have an accident or an illness and are in a coma, say, or otherwise unable to make the payment by the deadline.

Spirit Rider
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Re: Health insurance gamble?

Post by Spirit Rider » Thu Oct 05, 2017 6:16 pm

SheReadsHere719 wrote:
Thu Oct 05, 2017 11:28 am
dm1898 wrote:
Thu Oct 05, 2017 9:49 am
HR keeps telling my wife that even if we are not covered and have an insurance claim, that when they sort everything out we will be retroactively covered. That sounds wrong to me and I feel like it is just them trying to make us go away.
HR is actually correct on this; COBRA includes 60-day retroactive eligibility coverage. If something happened and a claim was submitted to your insurance but denied, then the onus would be on HR to correct your eligibility status and get the claim paid (provided you paid the premiums).

Since your window without insurance is < 60 days (9/4 - 11/1), you would be covered retroactively for the full period. Helpful links: https://www.cms.gov/CCIIO/Programs-and- ... a_qna.html

https://www.dol.gov/sites/default/files ... nsumer.pdf
The sixty (60) day election period does not begin until the earlier of the end of coverage or the receipt of the Cobra notification/enrollment package. Then you have 45 days from when the employer receives your election until the payment of premium is required.

If you meet these requirements your COBRA enrollment is valid and the insurance company must retroactively pay all claims.

munemaker
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Re: Health insurance gamble?

Post by munemaker » Thu Oct 05, 2017 7:29 pm

dm1898 wrote:
Thu Oct 05, 2017 9:49 am
Hello bogleheads,

Well despite our best efforts the HR department has dropped the ball and we are currently not covered by COBRA, and will be unable to get coverage until HR corrects the issue. We call them everyday and they really don't have an answer as to when things will be lined up.

HR may not have dropped the ball. Some people logically think HR is going to contact you and sign you up for COBRA (if that is your decision) before separation from the company. Based on my experience, that's not how it works. Generally HR contracts this to an outside administrator who contacts you by US mail a couple weeks after separation and offers to sign you up. It is no big deal because the coverage is retroactive to your separation date.

A friend of mine told me the same story recently: "My wife went part time and HR forgot to offer her COBRA until after she separated."

I know this because in my last job, I asked HR about COBRA before I retired, and they told me I would receive information in the mail, and any claims are retroactive to the date of separation, so not to worry. I ended up using ObamaCare for medical, but used COBRA for dental and vision, and it was retroactive as they claimed.

Dottie57
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Re: Health insurance gamble?

Post by Dottie57 » Fri Oct 06, 2017 9:09 am

dm1898 wrote:
Thu Oct 05, 2017 11:50 am
Interesting points on the retroactive issue.

So a little more to the story then....

My wife is currently on maternity leave like I said, but when she returns to work on Nov 1st she will be starting a new job. The new job is with the same hospital but in another department that will change the insurance to a different carrier. Would it still be wise to hold off and see if we have any issues, and then if not forego the coverage?
I myself would pay the insurance now.

Katietsu
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Re: Health insurance gamble?

Post by Katietsu » Fri Oct 06, 2017 10:23 am

The only gamble you are taking is if a catastrophe occurs and nobody can handle activating the insurance within the 60 day time period. You really can have an expensive surgery tomorrow and sign up for Cobra on Thanksgiving and be covered. My husband played this gamble once. He did not use the insurance during the uncovered month and chose therefore to never pay the Cobra. We had a third person in addition to each of us who had all the paperwork ready to go in case of the unlikely comatose type situation. Given that you project new coverage on November 1, well before the Cobra election period ends, I personally would risk it. I believe you can even sign up, but not pay and then say you didn't wNt it after all. But, I have not personally done this one. Read about Cobra election periods.

an_asker
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Re: Health insurance gamble?

Post by an_asker » Fri Oct 06, 2017 10:36 am

Katietsu wrote:
Fri Oct 06, 2017 10:23 am
The only gamble you are taking is if a catastrophe occurs and nobody can handle activating the insurance within the 60 day time period. You really can have an expensive surgery tomorrow and sign up for Cobra on Thanksgiving and be covered. My husband played this gamble once. He did not use the insurance during the uncovered month and chose therefore to never pay the Cobra. We had a third person in addition to each of us who had all the paperwork ready to go in case of the unlikely comatose type situation. Given that you project new coverage on November 1, well before the Cobra election period ends, I personally would risk it. I believe you can even sign up, but not pay and then say you didn't wNt it after all. But, I have not personally done this one. Read about Cobra election periods.
That sounds about right.

Long long ago (OK, nearly two decades ago), I got a job at a benefits company that "majored" in COBRA coverage benefits. As part of the new employee orientation, this was one of the items we were all taught. Needless to say, I don't remember the specifics, but you have x number of days to opt for COBRA and then an additional y number of days by which to submit your first payment. At that point, assuming that you are now covered at the new place of employment, you can make a choice - through x+y days past separation from the job, if you've spent more in medical bills than the COBRA payments, then you go ahead and make that payment and continue with COBRA. Else, don't mail in the payment and you're good to go.

Of course, all this was before Obamacare - I have no idea how the penalty of not having insurance ties in with all this!

michaeljc70
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Re: Health insurance gamble?

Post by michaeljc70 » Fri Oct 06, 2017 10:40 am

Katietsu wrote:
Fri Oct 06, 2017 10:23 am
The only gamble you are taking is if a catastrophe occurs and nobody can handle activating the insurance within the 60 day time period. You really can have an expensive surgery tomorrow and sign up for Cobra on Thanksgiving and be covered. My husband played this gamble once. He did not use the insurance during the uncovered month and chose therefore to never pay the Cobra. We had a third person in addition to each of us who had all the paperwork ready to go in case of the unlikely comatose type situation. Given that you project new coverage on November 1, well before the Cobra election period ends, I personally would risk it. I believe you can even sign up, but not pay and then say you didn't wNt it after all. But, I have not personally done this one. Read about Cobra election periods.
This. I don't view it as a gamble. The retroactive policy is the law.

I would watch that appointment that cannot be pushed back. If you've ever looked at EOBs, you know what full prices are like. I think for my "free" physical there was $1200 in lab work and that doesn't count the doctor.

Katietsu
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Re: Health insurance gamble?

Post by Katietsu » Fri Oct 06, 2017 10:47 am

No ACA penalty in this case unless as long as new insurance in place by December 31. Read rules for short term coverage gap. Will likely need to claim the short term coverage gap exemption-so one extra form when you file taxes. Would need to remember to do this.

inbox788
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Re: Health insurance gamble?

Post by inbox788 » Fri Oct 06, 2017 1:32 pm

Did she use the hospital that she works at? It would be ridiculous if the hospital HR or other red tape caused her to be billed by that hospital for services and go unpaid. If you're unable to work your way through HR and get a timely and satisfactory result, maybe it's time to work up another chain. It's a matter of finding the right administrator that can contact the HR boss to figure out where things are stuck and what to do to get them moving before the time is up. Ultimately, if the insurance doesn't pay, you will have to (collections) or the hospital will absorb a loss (lawsuit), so it benefits everyone (but the insurance company) if you can square away the problems. Besides HR, you have 2 other limbs to climb, beginning with wife's big boss (above supervisor or manager). The other limb is the doctor who provided services and their billing department. If it's all under one hospital roof, it all converges in the hospital CEO office.

TropikThunder
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Re: Health insurance gamble?

Post by TropikThunder » Fri Oct 06, 2017 10:53 pm

inbox788 wrote:
Fri Oct 06, 2017 1:32 pm
Did she use the hospital that she works at? It would be ridiculous if the hospital HR or other red tape caused her to be billed by that hospital for services and go unpaid. If you're unable to work your way through HR and get a timely and satisfactory result, maybe it's time to work up another chain. It's a matter of finding the right administrator that can contact the HR boss to figure out where things are stuck and what to do to get them moving before the time is up. Ultimately, if the insurance doesn't pay, you will have to (collections) or the hospital will absorb a loss (lawsuit), so it benefits everyone (but the insurance company) if you can square away the problems. Besides HR, you have 2 other limbs to climb, beginning with wife's big boss (above supervisor or manager). The other limb is the doctor who provided services and their billing department. If it's all under one hospital roof, it all converges in the hospital CEO office.
OP and his family have not incurred any uncovered charges yet. DW went on leave 09-04, had regular employee coverage until 09-30 and was then supposed to be switched to the COBRA version. The switch has not happened, but none of them have needed medical treatment since DW went on leave. All of OP's efforts are to get it activated now in case they need any treatment before the new employee coverage starts 11-01.

dm1898
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Re: Health insurance gamble?

Post by dm1898 » Sun Oct 08, 2017 12:13 pm

Thank you all for the advice. I think we will forego the insurance as of now and give the paperwork to my father in case we were all incapacitated and could pay for the coverage. Thank you for all of your insight, there really is a wealth of knowledge on these boards.

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