New job/health plan a month after coverage ends, pay COBRA?

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cflannagan
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New job/health plan a month after coverage ends, pay COBRA?

Post by cflannagan » Thu Jan 23, 2014 11:15 am

Can someone who is knowledgeable with COBRAs in general chime in?

I was recently laid off, and my health plan coverage ended on 12/31/2012.

I am hired through another company, my start date is January 31 (going with their recommendation, that way all my benefits begin on February 1 including the new health plan).

COBRA docs, if I understand them correctly, basically say I have 63 days to pay for continuing coverage, or to find new plan.

There is some medical expenses for the month of January ($500 for some prescription which is full uninsured costs- ouch!). But paying for COBRA for month of January would cost me about $1,500.

I have no PCEs (pre-existing conditions) neither does anyone in my family (mentioning this just in case this is somehow a factor in this discussion).

Is there any reason why I should pay for COBRA continuing coverage for the month of January, assuming by the time January ends there are no other medical/prescription expenses incurred?

Thanks in advance!

SpaceCowboy
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Re: New job/health plan a month after coverage ends, pay COB

Post by SpaceCowboy » Thu Jan 23, 2014 12:00 pm

The simple answer seems to be No.
Cobra essentially gives you an option on the first 2 months. If your reimburseable health costs are less than the premiums, there is no need to pay for the insurance.
In your case, since you have new insurance beginning 2/1, you can know with certainty what your January health costs are before having to make the decision on whether or not to pay the January premium. You have 60 days from the date they give you your Cobra notice to make the decision.

Spirit Rider
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Re: New job/health plan a month after coverage ends, pay COB

Post by Spirit Rider » Thu Jan 23, 2014 1:19 pm

You have 63 day from when you receive the COBRA packet to elect coverage. The election comes with no obligation. You then have 45 days to pay your premium. Your timeline is well within these deadlines.

Even if you had pre-existing coverage it would not matter. Cobra coverage is retroactive to the date you lost coverage if you met the deadlines. It is considered uninterrupted coverage.

Bacchus01
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Re: New job/health plan a month after coverage ends, pay COB

Post by Bacchus01 » Thu Jan 23, 2014 2:04 pm

They pretty much nailed it above.

One thing to consider is whether you had an FSA. If you did, you can elect Cobra just for your medical FSA and use your full FSA dollars to pay that $500 expense.

It might work something like this (I'll use some round numbers). You elected $2400 FSA for the year, or $200 a month. You elect COBRA for January and must pay the $200. You then file your claim on the $500 and the entire $500 is paid out. You make $300 on this.

Perfectly legal and reasonable.

If you didn't have an FSA, well, nevermind.

wholeinone04
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Re: New job/health plan a month after coverage ends, pay COB

Post by wholeinone04 » Thu Jan 23, 2014 2:12 pm

Yea absolutely not. COBRA is a total rip-off unless you get laid off and your company covers it for you :)

Take the 2 free months of COBRA and only pay after/if you need to go to the hospital and the bill is greater than your premium would be.

http://yourpfpro.com/get-2-free-months- ... nce-cobra/

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dm200
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Re: New job/health plan a month after coverage ends, pay COB

Post by dm200 » Thu Jan 23, 2014 2:15 pm

cflannagan wrote:Can someone who is knowledgeable with COBRAs in general chime in?

I was recently laid off, and my health plan coverage ended on 12/31/2012.

I am hired through another company, my start date is January 31 (going with their recommendation, that way all my benefits begin on February 1 including the new health plan).

COBRA docs, if I understand them correctly, basically say I have 63 days to pay for continuing coverage, or to find new plan.

There is some medical expenses for the month of January ($500 for some prescription which is full uninsured costs- ouch!). But paying for COBRA for month of January would cost me about $1,500.

I have no PCEs (pre-existing conditions) neither does anyone in my family (mentioning this just in case this is somehow a factor in this discussion).

Is there any reason why I should pay for COBRA continuing coverage for the month of January, assuming by the time January ends there are no other medical/prescription expenses incurred?

Thanks in advance!
I think you mean 12/31/2013.

You still have from now until Feb 1 "at risk" for expenses or incur a pre-existing condition. Chances are (but not certain) the Feb 1 plan does not exclude pre-existing conditions, but it might be delayed or exempted under the ACA. What is (or is not) a "pre-existing" condition could get complicated - so I would find out if there is that possible exclusion in the new plan. There is also, possibly, the issue of continuous coverage "proof" and I just don't know if that goes away or not if not insured for the month of January. While the $1,500 vs. $500 looks large (and it is), I would also evaluate any possible aggravation factor if the gap in coverage causes any complications with the new employer's plan.

If you (or a family member) has $500 prescription costs, doesn't that mean a "pre-existing" condition possibility/probability?

Spirit Rider
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Re: New job/health plan a month after coverage ends, pay COB

Post by Spirit Rider » Thu Jan 23, 2014 2:30 pm

dm200 wrote:You still have from now until Feb 1 "at risk" for expenses or incur a pre-existing condition. Chances are (but not certain) the Feb 1 plan does not exclude pre-existing conditions, but it might be delayed or exempted under the ACA. What is (or is not) a "pre-existing" condition could get complicated - so I would find out if there is that possible exclusion in the new plan. There is also, possibly, the issue of continuous coverage "proof" and I just don't know if that goes away or not if not insured for the month of January. While the $1,500 vs. $500 looks large (and it is), I would also evaluate any possible aggravation factor if the gap in coverage causes any complications with the new employer's plan.

If you (or a family member) has $500 prescription costs, doesn't that mean a "pre-existing" condition possibility/probability?
Separate from COBRA, HIPPA since 1996 also provided a 63 day protection against exclusion for pre-existing conditions. So a one month gap would not subject anyone to pre-existing condition exclusion.

Which is now mute because under the ACA starting in 2014, you can not be denied coverage nor charged higher premiums for health status. The only two considerations for premium cost are age and smoking status.

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dm200
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Re: New job/health plan a month after coverage ends, pay COB

Post by dm200 » Thu Jan 23, 2014 2:57 pm

Spirit Rider wrote:
dm200 wrote:You still have from now until Feb 1 "at risk" for expenses or incur a pre-existing condition. Chances are (but not certain) the Feb 1 plan does not exclude pre-existing conditions, but it might be delayed or exempted under the ACA. What is (or is not) a "pre-existing" condition could get complicated - so I would find out if there is that possible exclusion in the new plan. There is also, possibly, the issue of continuous coverage "proof" and I just don't know if that goes away or not if not insured for the month of January. While the $1,500 vs. $500 looks large (and it is), I would also evaluate any possible aggravation factor if the gap in coverage causes any complications with the new employer's plan.

If you (or a family member) has $500 prescription costs, doesn't that mean a "pre-existing" condition possibility/probability?
Separate from COBRA, HIPPA since 1996 also provided a 63 day protection against exclusion for pre-existing conditions. So a one month gap would not subject anyone to pre-existing condition exclusion.

Which is now mute because under the ACA starting in 2014, you can not be denied coverage nor charged higher premiums for health status. The only two considerations for premium cost are age and smoking status.
OK, thanks for the clarification about the 63 day "gap".

While I do know that the ACA requires fully compliant plans to ditch any pre-existing condition exclusions, I thought that, with the delay of various parts of the ACA relating to employer plans, that existing employer plans could continue this exclusion for some period. I could be wrong, though.

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Re: New job/health plan a month after coverage ends, pay COB

Post by technovelist » Thu Jan 23, 2014 3:06 pm

You can retroactively activate COBRA if you elect that within approximately 60 days of termination, and then have additional time to pay. So you can just wait to see if you have covered expenses before deciding whether to pay.

I've done this in the past with no issues, but of course you should do your own research.
In theory, theory and practice are identical. In practice, they often differ.

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cflannagan
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Re: New job/health plan a month after coverage ends, pay COB

Post by cflannagan » Thu Jan 23, 2014 10:01 pm

I discussed this question with the HR guy (at my new job) earlier today and he confirms what others said in this thread - no reason to pay COBRA now, wait until February 1 (or earlier) to see if I need to pay $1,500 COBRA (so far, I will save $1,000 by not paying for it).

I also called Ameriflex today (my new FSA company) to see if they will cover medical expenses incurred during month of January, even though the FSA plan begins on February 1. The rep said it's up to my employer, which is odd because I thought normally the FSA company (Ameriflex in this case) is the one who makes final determination whether or not they will cover it. Nevertheless, I forwarded the question to the HR guy. I will also submit the claim for $500 Rx costs in January and see what they actually do with it when February comes around.

Bacchus01
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Re: New job/health plan a month after coverage ends, pay COB

Post by Bacchus01 » Fri Jan 24, 2014 9:39 am

For your FSA claim in January, they definitely should not cover that. You were not covered at the time.

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cflannagan
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Re: New job/health plan a month after coverage ends, pay COB

Post by cflannagan » Fri Jan 24, 2014 10:22 am

Bacchus01 wrote:For your FSA claim in January, they definitely should not cover that. You were not covered at the time.
Yup, I'm not counting on it either. If they don't, at least I gave it a try.

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