COBRA alternative for 1 month? (it's $2,400 per month!)

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MikeT
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COBRA alternative for 1 month? (it's $2,400 per month!)

Post by MikeT » Sat Jan 13, 2018 6:30 am

  • My last day at my current employer is 1/26/18.
  • My first day with my new employer will be 1/29/18.
  • Health coverage at my new employer won't start until 3/1/18.
  • COBRA from my old employer would cost $2,400 / month for my spouse and me.
  • We have no doctor's appointments scheduled for February so I really just need catastrophic coverage, not a full-service plan.
  • Our current coverage is with AETNA
QUESTIONS:
--------------
1. Do you think AETNA would sell me a personal high deductible policy for the month since we've been continuously insured through our PPO workplace policy for 10 years?

2.Any better solution than paying $2,400 for 1 month of catastrophic protection?

TIP:
-----
HR from my current employer told me that although I have 45 days to pick COBRA, unless the premium is paid no coverage exists (which makes total sense). He mentioned that some people think they'll wait 45 days before signing up and if nothing bad happened, simply not sign up save a month's premium.

Thanks for any tips!
Mike

TwstdSista
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by TwstdSista » Sat Jan 13, 2018 6:46 am

I believe the waiting period for COBRA will cover you. Yes, no insurance technically exists for that time period. But they will back track it if you elect to pick up the coverage.

Example: you see a doctor and need a prescription. For the doctor's $300, have them reissue the bill to the insurance once COBRA is elected and paid and Walla! You are covered. For the prescription, pay the full price at the pharmacy, then you submit to the insurance once COBRA is elected (and paid) and the insurance company should reimburse you.

This was my understanding of the issue when we opted for the one month of no coverage maybe five years ago.

(PS -- I know the correct term is "viola!" but I do not care)

Chip
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by Chip » Sat Jan 13, 2018 6:52 am

TwstdSista wrote:
Sat Jan 13, 2018 6:46 am
(PS -- I know the correct term is "viola!" but I do not care)
I always thought a viola was a stringed instrument a little larger than a violin.

I had an adverse reaction to that spelling of voila! :twisted:

MikeT
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by MikeT » Sat Jan 13, 2018 7:00 am

If I slip / fall on the ice and show up in the emergency room 2/15, I suspect the very first thing the hospital will do is confirm my health insurance is in effect.

I strongly suspect that if I haven't paid for coverage, no coverage exists.

Providing care on 2/15 and then billing the insurance company as if the date of service was 3/15 (after I purchased coverage) sounds like insurance fraud.

I can't imagine the hospital conspiring with me to defraud the insurance company.

-MIke

sc9182
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by sc9182 » Sat Jan 13, 2018 7:05 am

Like TwstdSista indicated, believe it's 60 days before you can decide to send/not-to-send payment.

You are covered till following 60 days, but presuming your payment reaches/posted within that period. If you fall and Hospitalise, wise-up and send payment asap within 60 days!! (try with credit card on phone so you have proof, rather than oft conveniently cited lost check in mail, or 2-3 days to post/clear check funds etc excuses)

Hope your new employer has a large group coverage.

My memory from 4 years ago, before ACA rules. With TCJA, you may not be penalized for coverage GAP period, but I dunno.

Updated: 60 days (originally thought 30 days)
Last edited by sc9182 on Sat Jan 13, 2018 7:39 am, edited 1 time in total.

TwstdSista
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by TwstdSista » Sat Jan 13, 2018 7:20 am

Chip wrote:
Sat Jan 13, 2018 6:52 am
TwstdSista wrote:
Sat Jan 13, 2018 6:46 am
(PS -- I know the correct term is "viola!" but I do not care)
I always thought a viola was a stringed instrument a little larger than a violin.

I had an adverse reaction to that spelling of voila! :twisted:
Bah! I can't even correct myself properly. Very funny!

bberris
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by bberris » Sat Jan 13, 2018 7:28 am

You have 60 days after the qualifying event (quitting your job) to claim and pay for cobra insurance. if you are in the emergency room, the first thing they ask is where you fell! You tell them you are going on your employers insurance as soon as you get around to it. They must treat you in an emergency. This is not insurance fraud, it's federal law.

An alternative to cobra would be obamacare. It might be just as expensive, or more expensive than cobra. You can sign up outside the open enrollment because of the qualifying event. But there is no backdating of obamacare.

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samsoes
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by samsoes » Sat Jan 13, 2018 7:35 am

COBRA coverage is retroactive to the date you were no longer covered. You have 60 days from the date on the notice to elect and pay for COBRA (pay attention to the election and coverage dates - they are unforgiving if you miss them, but they are at least 60 days out.)

I've done the following during brief periods of no insurance when waiting for a new employer's insurance to kick-in. It is not insurance fraud. It's a common technique in such cases.

(I'm single and live alone. You scenario may be different.)

FIll-out the COBRA paperwork, write the check, seal the envelope and leave it on the kitchen table. (Heck, put a stamp on it). Put a note on it - "if I get sick or injured, mail this." Tell your family about it. If the envelope is mailed, coverage is retroactive to the day your regular insurance ceased, even if you incur claims.

Of course, don't have any appointments/procedures scheduled during that time. If you do have to go to the doc, consider paying cash since a standard office visit may be cheaper than triggering the COBRA in your case.

When your new insurance is in-force,shred the COBRA paperwork and payment.

Violins! :mrgreen:
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. | (Avatar is the statue of Gen. Warren at Little Round Top @ Gettysburg National Military Park.)

fsrph
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by fsrph » Sat Jan 13, 2018 7:47 am

MikeT wrote:
Sat Jan 13, 2018 7:00 am
If I slip / fall on the ice and show up in the emergency room 2/15, I suspect the very first thing the hospital will do is confirm my health insurance is in effect.

I strongly suspect that if I haven't paid for coverage, no coverage exists.

Providing care on 2/15 and then billing the insurance company as if the date of service was 3/15 (after I purchased coverage) sounds like insurance fraud.

I can't imagine the hospital conspiring with me to defraud the insurance company.

-MIke
It's not insurance fraud. The hospital is not delaying the date of the service for a month. You have at least 60 days to elect cobra. You don't elect it immediately. If you elect it after 55 days, and pay the two months premiums, you are covered retroactively for the previous 55 days. At least that's how I understand it.

Francis
"Success is getting what you want. Happiness is wanting what you get." | Dale Carnegie

ASpenderInRecovery
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by ASpenderInRecovery » Sat Jan 13, 2018 8:01 am

MikeT wrote:
Sat Jan 13, 2018 6:30 am
  • My last day at my current employer is 1/26/18.
  • My first day with my new employer will be 1/29/18.
  • Health coverage at my new employer won't start until 3/1/18.
  • COBRA from my old employer would cost $2,400 / month for my spouse and me.
  • We have no doctor's appointments scheduled for February so I really just need catastrophic coverage, not a full-service plan.
  • Our current coverage is with AETNA
QUESTIONS:
--------------
1. Do you think AETNA would sell me a personal high deductible policy for the month since we've been continuously insured through our PPO workplace policy for 10 years?

2.Any better solution than paying $2,400 for 1 month of catastrophic protection?

TIP:
-----
HR from my current employer told me that although I have 45 days to pick COBRA, unless the premium is paid no coverage exists (which makes total sense). He mentioned that some people think they'll wait 45 days before signing up and if nothing bad happened, simply not sign up save a month's premium.

Thanks for any tips!
Mike
Had a very similar situation when changing jobs 1.5 years back. No coverage for roughly 30 days. COBRA was exorbitant. My suggestion is you search around for a solid short-term coverage plan and find one that fits your requirements. In my case, I found a good policy through United Healthcare that was easily 50% the cost of COBRA and although I didn’t need it it was worth the peace of mind. Make sure once you find a good plan you understand the terms of when the coverage starts because some require some time to kick in and if done too late defeat the point of paying for them because you will still have a gap and then end up partially paying for double coverage. Last piece of advice is if possible try to get any appointments done or prescriptions filled before 1/26 to help reduce costs. If you explain the situation to doctors and pharmacies they may help accomodate.

MikeT
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by MikeT » Sat Jan 13, 2018 8:11 am

So, if you elect COBRA 55 days after and pay for 2 months, are you paying for the 2 months that just passed, or in advance for the next 2 months?

Thx
Mike

bberris
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by bberris » Sat Jan 13, 2018 8:15 am

The past two months. It's retroactive. You can't skip a month or two and then start it. If you elect COBRA, it is continuous coverage from the qualifying event.

Veritas Simplex
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by Veritas Simplex » Sat Jan 13, 2018 8:18 am

The 55 days which have passed. Essentially, using the grace period for paying the premium.

MikeT
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by MikeT » Sat Jan 13, 2018 8:21 am

Interesting: my cable company makes me pay for service in advance.

I'm surprised Cobra doesn't: why wouldn't people wait to see if they had a catastrophic illness and only pay if they did?

MikeT
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by MikeT » Sat Jan 13, 2018 8:26 am

Hmm. According to this article:
http://www.mymoneyblog.com/cobra-and-re ... erage.html

"You have 60 days after you lose your benefits to elect to pay for COBRA coverage. However, even if you enroll on Day 60, your coverage is retroactive to Day 1. Of course, you’ll have to pay the retroactive premiums for that period. Thus, you could technically waive your COBRA coverage initially, and then wait to see if you incur any medical bills. If you manage to get on a new health plan on Day 30 or Day 55 with no medical bills, then you’ll still be guaranteed full coverage going forward and you won’t have paid anything during your gap. If you can’t find new coverage within 63 days or rack up medical bills higher than the premiums, then you can rescind your waiver and retroactively activate your COBRA benefits. Effectively, you get a do-over."

fsrph
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by fsrph » Sat Jan 13, 2018 8:36 am

MikeT wrote:
Sat Jan 13, 2018 8:26 am
Hmm. According to this article:
http://www.mymoneyblog.com/cobra-and-re ... erage.html

"You have 60 days after you lose your benefits to elect to pay for COBRA coverage. However, even if you enroll on Day 60, your coverage is retroactive to Day 1. Of course, you’ll have to pay the retroactive premiums for that period. Thus, you could technically waive your COBRA coverage initially, and then wait to see if you incur any medical bills. If you manage to get on a new health plan on Day 30 or Day 55 with no medical bills, then you’ll still be guaranteed full coverage going forward and you won’t have paid anything during your gap. If you can’t find new coverage within 63 days or rack up medical bills higher than the premiums, then you can rescind your waiver and retroactively activate your COBRA benefits. Effectively, you get a do-over."
I agree with the principle of the article. But I would not initially waive cobra coverage. Just hold on to the cobra paperwork and decide later if you need coverage.

Francis
"Success is getting what you want. Happiness is wanting what you get." | Dale Carnegie

MikeT
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by MikeT » Sat Jan 13, 2018 8:45 am

I also found this thread which substantiates the retroactive-ness of Cobra if you require emergency room during that gap period:

https://ask.metafilter.com/270130/a-hea ... a-loophole

The tread has several people chime in who actually used the "cobra loop-hole"

e.g. "When I left my job before last, I was in a similar situation and thought I would just go without insurance until the new insurance kicked in. However, I had an emergency, and I received healthcare in the month after my employer insurance ended. When I elected COBRA 44 days after separation from that employer, all the healthcare I had received was covered retroactively. Both my medical providers and my previous employer told me that this was not up to the whim of the employer, but was mandated by the federal government."

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samsoes
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by samsoes » Sat Jan 13, 2018 8:48 am

MikeT wrote:
Sat Jan 13, 2018 8:21 am
Interesting: my cable company makes me pay for service in advance.

I'm surprised Cobra doesn't: why wouldn't people wait to see if they had a catastrophic illness and only pay if they did?
That's what I've done in short term situations.

If COBRA was a longer-term solution, however, then there's no reason to wait to signup and pay.

But be aware, once the government-mandated grace period ends, subsequent payment due dates are strictly enforced and merciless. One day late, and it's all over.
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. | (Avatar is the statue of Gen. Warren at Little Round Top @ Gettysburg National Military Park.)

lostinjersey
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by lostinjersey » Sat Jan 13, 2018 8:58 am

I work in benefits. The COBRA loophole is a thing. You can take your chances and may never need it. If you want more peace of mind, catostrophic policies are also a thing. You can call Aetna or UHC or BCBS or any other health insurance provider, and they will sell you a two-month policy for a few hundred bucks. Finally, Obamacare is a third thing and your state’s exchange will offer you coverage based on your old policy ending. So lots of options for your gap period.

sc9182
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by sc9182 » Sat Jan 13, 2018 9:00 am

MikeT wrote:
Sat Jan 13, 2018 8:21 am
Interesting: my cable company makes me pay for service in advance.

I'm surprised Cobra doesn't: why wouldn't people wait to see if they had a catastrophic illness and only pay if they did?
Either OP is overly concerned, or not feeling comfortable of sufficient research/info on this topic.

Understand his point about premium cost$$ is not cheap, but OP considers what if a catastrophic medical event happens within that 40 days or so.

BTW, your new employer coverages first payment is not reaching its insurance company for at least 7-30 days after you join or finish enrollment either. Should you be overly concerned of possible GAP (it is not, but only if you are worrying about it), may be paying COBRA $$$ for 2-3 months could give additional peace - until you see first health insurance premium deducted on your new employer plan (btw - new employer likely to have 30 days enrollment period and may be you haven't made decision timely and what if you fell down again before the first proof of payment/deduction and/or receive new cards? (being jovially sarcastic about payment/coverage proof)

Talk to your current HR, and with your current provider and decipher their COBRA language - might give additional data points.

MikeT
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by MikeT » Sat Jan 13, 2018 9:46 am

I just remembered that one of my facebook friends is Director of HR. I just asked him and he was very clear that it is indeed retroactive as a matter of federal law. He even added: "Your HR rep must be a rookie, because his assertion is a rookie error."

MikeT
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by MikeT » Sat Jan 13, 2018 9:49 am

He also added: "How could someone pay for coverage when they won’t even get the paperwork with costs until up to a couple weeks after they’re off employment? Sheesh."

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dm200
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by dm200 » Sat Jan 13, 2018 9:55 am

In the period when COBRA has been available, I have always signed up and paid right away. I did not want to assume the various risks of the perfectly legitimate "gaming" of COBRA retroactive signup.

Many decades ago, before COBRA - I had to be partially uninsured for a short period - and fortunately nothing happened.

Yes - $2,400 is a LOT - but think of what might happen.

wrongfunds
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by wrongfunds » Sat Jan 13, 2018 10:02 am

dm200 wrote:
Sat Jan 13, 2018 9:55 am
In the period when COBRA has been available, I have always signed up and paid right away. I did not want to assume the various risks of the perfectly legitimate "gaming" of COBRA retroactive signup.

Many decades ago, before COBRA - I had to be partially uninsured for a short period - and fortunately nothing happened.

Yes - $2,400 is a LOT - but think of what might happen.
Oh great :-( If you want to be scared about the life in general, BH is the best place to be! Somebody will always give you reason to be very afraid regardless of the facts. :-(

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dm200
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by dm200 » Sat Jan 13, 2018 10:04 am

wrongfunds wrote:
Sat Jan 13, 2018 10:02 am
dm200 wrote:
Sat Jan 13, 2018 9:55 am
In the period when COBRA has been available, I have always signed up and paid right away. I did not want to assume the various risks of the perfectly legitimate "gaming" of COBRA retroactive signup.
Many decades ago, before COBRA - I had to be partially uninsured for a short period - and fortunately nothing happened.
Yes - $2,400 is a LOT - but think of what might happen.
Oh great :-( If you want to be scared about the life in general, BH is the best place to be! Somebody will always give you reason to be very afraid regardless of the facts. :-(
Oh, yes - sometimes I worry too much.. Then again, sometimes (and I have suffered financially) not enough. Remember that with COBRA you are depending on a former employer to do things right.

sc9182
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by sc9182 » Sat Jan 13, 2018 10:18 am

Many a things are possible. What if your ex-employer, or the insurance co suddenly goes under while you are still between jobs?

Doesn't hurt to be careful, what is plan B - thought about CHIP or Medicaid type coverages for kids and mom (since your current year income is small, under 1 month and without a holding a job for a period anyway)

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samsoes
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by samsoes » Sat Jan 13, 2018 10:19 am

dm200 wrote:
Sat Jan 13, 2018 10:04 am

Remember that with COBRA you are depending on a former employer to do things right.
Employers typically hand-off the administration to third-party COBRA administrators (Ceridian comes to mind; there are others). It's too easy for employers - even Megacorps - to go afoul of the complex rules and end-up in a heap of trouble.
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. | (Avatar is the statue of Gen. Warren at Little Round Top @ Gettysburg National Military Park.)

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dm200
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by dm200 » Sat Jan 13, 2018 10:51 am

samsoes wrote:
Sat Jan 13, 2018 10:19 am
dm200 wrote:
Sat Jan 13, 2018 10:04 am
Remember that with COBRA you are depending on a former employer to do things right.
Employers typically hand-off the administration to third-party COBRA administrators (Ceridian comes to mind; there are others). It's too easy for employers - even Megacorps - to go afoul of the complex rules and end-up in a heap of trouble.
The last time I used COBRA, a small company did everything themselves.

MikeT
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by MikeT » Sat Jan 13, 2018 11:19 am

Here is the link to the official Dept of Labor Cobra info:
https://www.dol.gov/sites/default/files ... nsumer.pdf

From Q15:

"When you elect continuation coverage, you cannot be required to send any payment with your election form.
You can be required, however, to make an initial premium payment within 45 days after the date of your
COBRA election (that is the date you mail in your election form, if you use first-class mail). Failure to make
any payment within that period of time could cause you to lose all COBRA rights. The plan can set premium
due dates for successive periods of coverage (after your initial payment), but it must give you the option to
make monthly payments, and it must give you a 30-day grace period for payment of any premium.
You should be aware that if you do not pay a premium by the first day of a period of coverage, but pay the
premium within the grace period for that period of coverage, the plan has the option to cancel your coverage
until payment is received and then reinstate the coverage retroactively back to the beginning of the period of
coverage. Failure to make payment in full before the end of a grace period could cause you to lose all COBRA
rights. "

quantAndHold
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by quantAndHold » Sat Jan 13, 2018 11:31 am

MikeT wrote:
Sat Jan 13, 2018 8:21 am
Interesting: my cable company makes me pay for service in advance.

I'm surprised Cobra doesn't: why wouldn't people wait to see if they had a catastrophic illness and only pay if they did?
COBRA gives you 60 days to sign up, but once you’re signed up, the premiums are due at the beginning of the month. In practice, that means that when you sign up, you send a check for the current and any previous months, AND the next month.

You are correct, though. Given the price of the coverage, and the loophole where he can sign up after the fact, it totally makes sense to wait and see, and only pay if someone actually needs the coverage. The only thing to be ready for is that even if you have elected coverage, you will probably not show up as insured in their computer until some time after the insurance company receives the first check. So most providers will require you to pay up front, then submit claims to the insurance company once the coverage is reinstated, so OP needs to be prepared for that.

If the gap was going to be longer than the grace period, then it would make sense to sign up immediately. My experience was that even though I signed up immediately and sent the check the second I got the first bill, i still had to pay out of pocket and get reimbursed for about three weeks before the COBRA administrator notified the insurance company and the insurance company reinstated my coverage.

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dm200
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by dm200 » Sat Jan 13, 2018 12:03 pm

quantAndHold wrote:
Sat Jan 13, 2018 11:31 am
MikeT wrote:
Sat Jan 13, 2018 8:21 am
Interesting: my cable company makes me pay for service in advance.

I'm surprised Cobra doesn't: why wouldn't people wait to see if they had a catastrophic illness and only pay if they did?
COBRA gives you 60 days to sign up, but once you’re signed up, the premiums are due at the beginning of the month. In practice, that means that when you sign up, you send a check for the current and any previous months, AND the next month.

You are correct, though. Given the price of the coverage, and the loophole where he can sign up after the fact, it totally makes sense to wait and see, and only pay if someone actually needs the coverage. The only thing to be ready for is that even if you have elected coverage, you will probably not show up as insured in their computer until some time after the insurance company receives the first check. So most providers will require you to pay up front, then submit claims to the insurance company once the coverage is reinstated, so OP needs to be prepared for that.

If the gap was going to be longer than the grace period, then it would make sense to sign up immediately. My experience was that even though I signed up immediately and sent the check the second I got the first bill, i still had to pay out of pocket and get reimbursed for about three weeks before the COBRA administrator notified the insurance company and the insurance company reinstated my coverage.
It is also not uncommon that the starting date of a new job can slip for a few weeks or a month.

mouses
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by mouses » Sat Jan 13, 2018 12:28 pm

wrongfunds wrote:
Sat Jan 13, 2018 10:02 am
dm200 wrote:
Sat Jan 13, 2018 9:55 am
In the period when COBRA has been available, I have always signed up and paid right away. I did not want to assume the various risks of the perfectly legitimate "gaming" of COBRA retroactive signup.

Many decades ago, before COBRA - I had to be partially uninsured for a short period - and fortunately nothing happened.

Yes - $2,400 is a LOT - but think of what might happen.
Oh great :-( If you want to be scared about the life in general, BH is the best place to be! Somebody will always give you reason to be very afraid regardless of the facts. :-(
Decades ago before COBRA, I got into an argument excuse me discussion with a young guy who had a stay at home wife and small kids. I was advocating her having some job training. He was, I will always be there she will never have to work.

A short time later he resigned on a Friday to go to work for a new company on Monday, no health insurance or company provided life insurance over the weekend, during which he had a massive heart attack and died, leaving an unskilled wife, small children, and apparently little in savings.
Last edited by mouses on Sat Jan 13, 2018 12:31 pm, edited 1 time in total.

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dm200
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by dm200 » Sat Jan 13, 2018 12:31 pm

As short time later he resigned on a Friday to go to work for a new company on Monday, no health insurance or company provided life insurance over the weekend, during which he had a massive heart attack and died, leaving an unskilled wife, small children, and apparently little in savings.
Wow ...

Spirit Rider
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by Spirit Rider » Sat Jan 13, 2018 12:48 pm

Even though I have great respect for dm200, I am going to have to be the Yin on this Yang. I feel as though their response on every COBRA thread represents a FUD campaign. There really are no practical risks to using COBRA for gap pending-coverage if you simply make the election and payments on time if it becomes necessary

The often quoted; "what if you get hit by a bus and are in a coma?" changes nothing. Besides being a little over-dramatic and extremely unlikely. If you are using COBRA for this purpose simply let someone know. A healthcare proxy, next of kin, hospital (they want to get paid), etc.. can elect and submit payments on your behalf. Unlike dm200, I have used COBRA for gap pending-coverage five times and saved thousands of dollars.

One time I even successfully went three months before new employer insurance kicked in. I did have one provider visit and a couple of prescriptions during that time. However, they were well below what the COBRA premiums would have been for those three months Your coverage will lapse, you will have to pay full price for the prescriptions up front and you will get provider bills of the full amount.

In the times I eventually elected and paid for COBRA coverage, both the premiums and the coverage was retroactive. You will get the difference between what you paid for the prescriptions and your responsibility amount after the negotiated rate is applied for provider bills as if you have been on the coverage all along.

Thankfully somebody (MikeT) actual posted some information that had been omitted and countered misinformation. You have far more that a 60 day gap. It could be up to as much as 120 days, but then I would have to agree with dm200 as taking too great a risk.

26 CFR 54.4980B-6 - Electing COBRA continuation coverage, Q&A 1:
  1. ...The election period must not end before the date that is 60 days after the later of -
    1. The date the qualified beneficiary would lose coverage on account of the qualifying event; or
    2. The date notice is provided to the qualified beneficiary of her or his right to elect COBRA continuation coverage.
26 CFR 54.4980B-6 - Paying for COBRA continuation coverage, Q&A 5:
  1. Except as provided in this paragraph (a) or in paragraph (b) or (d) of this Q&A-5, timely payment for a period of COBRA continuation coverage under a group health plan means payment that is made to the plan by the date that is 30 days after the first day of that period. Payment that is made to the plan by a later date is also considered timely payment if either -
  2. Notwithstanding paragraph (a) of this Q&A-5, a plan cannot require payment for any period of COBRA continuation coverage for a qualified beneficiary earlier than 45 days after the date on which the election of COBRA continuation coverage is made for that qualified beneficiary.
In all five times I have been eligible for COBRA, the Notice Packet arrived about two weeks after the employer coverage ended regardless of the actual separation date. So the maximum timeline from loss of coverage is generally:
  • 15 days receive COBRA packet
  • 75 days must elect COBRA. 60 days after receipt of packet. Although some companies will specify a fixed date.
  • 120 days must pay for COBRA. 45 days after election.
  • 30 day grace period on every monthly payment. Coverage will lapse and be retroactively reinstated. So you don't really want to do it, but if you forget a late payment < 30 days it does not terminate COBRA.
I suggest you elect COBRA 7 - 10 days before the 60 day election deadline and make payment 7 - 10 days before the payment deadline. When submitting the election and payment, I always sent them by priority mail. It is a few bucks but here again minimizes risk. My last couple of times you could elect and make the first payment online and schedule all future payments by ACH.

So I am really not that far from dm200. Bogleheads target the highest risk adjusted returns. Using COBRA to cover a coverage gap is exactly that. I just believe that any of the minimal risks can be mitigated.

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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by MikeT » Sat Jan 13, 2018 12:56 pm

Thank you everyone for the robust discussion.

I'm really glad I didn't take my HR Director's word on face value; that would have cost me $2,400 unnecessary dollars!

Bogleheads ROCK !!!

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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by 123 » Sat Jan 13, 2018 1:00 pm

I wouldn't feel guilty about what seems to be a COBRA loophole (late sign-up with retroactive coverage). I'm sure the insurance companies have built that risk into their overall pricing structure (basically the rates they charge employers).
Last edited by 123 on Sat Jan 13, 2018 1:01 pm, edited 1 time in total.
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dm200
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by dm200 » Sat Jan 13, 2018 1:01 pm

MikeT wrote:
Sat Jan 13, 2018 12:56 pm
Thank you everyone for the robust discussion.
I'm really glad I didn't take my HR Director's word on face value; that would have cost me $2,400 unnecessary dollars!
Bogleheads ROCK !!!
OK - hope all works well for you.

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dm200
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by dm200 » Sat Jan 13, 2018 1:03 pm

123 wrote:
Sat Jan 13, 2018 1:00 pm
I wouldn't feel guilty about what seems to be a COBRA loophole (late sign-up with retroactive coverage). I'm sure the insurance companies have built that risk into their overal pricing structure.
Oh, yes, I agree. This "situation" is clearly built into the whole COBRA rules/regs/law. In fact, it may somewhat reduce former employers' direct costs by former employers not filing for COBRA - BUT I suspect those calculations may be complex.

Isabelle77
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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by Isabelle77 » Sat Jan 13, 2018 1:32 pm

mouses wrote:
Sat Jan 13, 2018 12:28 pm
wrongfunds wrote:
Sat Jan 13, 2018 10:02 am
dm200 wrote:
Sat Jan 13, 2018 9:55 am
In the period when COBRA has been available, I have always signed up and paid right away. I did not want to assume the various risks of the perfectly legitimate "gaming" of COBRA retroactive signup.

Many decades ago, before COBRA - I had to be partially uninsured for a short period - and fortunately nothing happened.

Yes - $2,400 is a LOT - but think of what might happen.
Oh great :-( If you want to be scared about the life in general, BH is the best place to be! Somebody will always give you reason to be very afraid regardless of the facts. :-(
Decades ago before COBRA, I got into an argument excuse me discussion with a young guy who had a stay at home wife and small kids. I was advocating her having some job training. He was, I will always be there she will never have to work.

A short time later he resigned on a Friday to go to work for a new company on Monday, no health insurance or company provided life insurance over the weekend, during which he had a massive heart attack and died, leaving an unskilled wife, small children, and apparently little in savings.
Another almost horror story. When I was a small child my dad did the same thing, resigned on a Friday and was supposed to start on the following Tuesday (I believe), my baby sister had her first grand mal seizure that weekend, stopped breathing, and wound up spending several weeks in the hospital, running a million tests. My dad's new megacorp covered the expenses but it could have bankrupted my parents otherwise. Oh and my sister's fine in case you were wondering :)

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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by MikeT » Sat Jan 13, 2018 1:34 pm

glad your sister is fine, that must have been terrifying !!

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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by dm200 » Sat Jan 13, 2018 3:54 pm

Since many employer plans seem to cover the employee/family until the end of the month of termination, maybe you should try to leave one employer well before the end of the month to have continued coverage.

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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by Good Listener » Sat Jan 13, 2018 4:54 pm

The board posters are all correct about the 60 day period of being able to retroactively claim coverage. I was in the situation once and had a one month hiatus and elected COBRA and paid it in advance. Why? Because things can get very hairy if you decide at say 50 or 55 days that you need the coverage or must have it and if the paperwork may not be received or post at the insurance company on time. In the extreme imagine a bad event on day 57, you lose. And there is zero latitutde on the 60 days from the insurance company I would imagine.
Last edited by Good Listener on Sat Jan 13, 2018 7:23 pm, edited 1 time in total.

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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by dm200 » Sat Jan 13, 2018 4:57 pm

Good Listener wrote:
Sat Jan 13, 2018 4:54 pm
The board posters are all correct about the 60 day period of being able to retroactively claim coverage. I was in the situation once and had a one month hiatus and elected COBRA and paid it in advance. Why? Because things can get very hairy if you decide at say 50 or 55 days that you need the coverage or must have it and it the paperwork may not be received or post at the insurance company on time. In the extreme imagine a bad event on day 57, you lose. And there is zero latitutde on the 60 days from the insurance company I would imagine.
Yes - the (potential) risks of cutting it too close..

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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by deltaneutral83 » Sat Jan 13, 2018 5:18 pm

I went through this very transition, I had called United Health to to write me a disaster policy to begin on day 59 after I left my previous employer. This was several years ago. The United plan wasn't up to snuff for ACA, and I was told that this United disaster plan (essentially a $19k Deduc that cost $60 a month for me individually) would be allowed for a maximum of 90 days. So I essentially had five months ( minus one day) of health ins to bridge. My new insurance kicked in just after the 4th month since I left the old employer. I called United the day the new company policy went into effect and received the pro rated amount back for that month from United, you shouldn't have two policies at the same time.

I'm much more concerned with stoplights screwing up and all lights in an intersection being green than I am about COBRA not being 60 days retroactive. It's simply one's emotions that causes one to pay COBRA premiums within that 60 days without incurring medical expenses. In fact, if it's simply a visit to get a necessary prescription, it may even be cheaper to pay cash than paying two months of COBRA premiums.

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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by jcchen » Sat Jan 13, 2018 5:22 pm

to clarify dm200's post, my employer deducts premiums monthly so if i quit a few days into the month, I am covered til month end.
Eg, last day is Feb 2 so have old job's subsidized (non cobra) insurance til Feb 28. Then start work at new job Feb 5.

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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by samsmith » Sat Jan 13, 2018 5:24 pm

slightly off topic - but is cobra (or other insurance ever tax deductible?) I assume not?

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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by overthought » Sat Jan 13, 2018 6:17 pm

dm200 wrote:
Sat Jan 13, 2018 3:54 pm
Since many employer plans seem to cover the employee/family until the end of the month of termination, maybe you should try to leave one employer well before the end of the month to have continued coverage.
This. Old employer coverage is effective through end of the month employee leaves. New employer coverage often kicks in the first day of the month after employee's start date. So while it seems "clean" to end on the last working day of a month, it's actually better to end on the first working day of a month. I just changed jobs and specifically chose my resignation date as 2 Jan rather than 29 Dec to ensure coverage through the January gap. To their credit, this idea came from old company's HR dept. Though in my case it turned out to be unnecessary because new employer coverage turned out to be effective on the date of hire...

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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by MikeT » Sat Jan 13, 2018 7:27 pm

Since I'm starting my new job Jan 29, my new job's healthcare March 1st.
If I started my new job on Feb 2nd, the new job's healthcare would be April 1st.

However, if my last day at old employer was Feb 1, my old employer would have had to pay Feb's health insurance for me (total waste) since we all now realize that if I don't end up in the emergency room, no one pays for Feb's $2,400 !!

-Mike

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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by TwstdSista » Sat Jan 13, 2018 7:32 pm

The "employer coverage through the end of the month" concept is not a hard and fast rule.

My girlfriend's husband got laid off on January 2. Health insurance coverage went through midnight on January 2. There was a mad scramble to fill prescriptions to cover any "gap" while they figure out their next plan.

And yes, they did indeed confirm that there was no coverage on January 3rd (barring them electing COBRA coverage down the road).

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Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Post by MikeT » Sat Jan 13, 2018 7:40 pm

That's twisted sista.

Seems mean to cancel healthcare like that. I guess their insurer offers prorated refunds. I bet my old old employer's doesn't otherwise they would probably not want to to pay for all of Feb for someone who leaves on Feb 2.

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