Between Jobs: Obamacare vs COBRA?

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tjhar
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Between Jobs: Obamacare vs COBRA?

Post by tjhar » Wed Oct 10, 2018 11:56 am

If I am between jobs and like to take a break, how do I handle health insurance?

Scenario
Let's presume the scenario as following. I resign in early Nov, my company healthcare extends through end of month (verified this is company's policy). Assume, I want to start new job in Jan and that's when insurance kicks in, I'll be uninsured in Dec.

Questions
1) My understanding is that COBRA used to be the thing, because of pre-existing conditions, but with Obamacare that's now no longer necessary? Has there been legislation/policy changes in recent years that removes the guarantee that Obamacare will cover your insurance regardless of any pre-existing condition?
2) COBRA is retroactive. This is both good and bad. That means I can wait after 30 days to sign up and pay premium, or in this case I can "wait and see" if I need insurance in Dec and signup for it. But the problem with this line of argument is that if you get into accident and in a coma for say 3 mths, you're screwed because by then the COBRA signup window is gone.

Based on these two lines of thought, do you agree Obamacare is probably the safest route? I'm assuming that I can signup for Obamacare in late Nov, and get covered from Dec 1st (and not retroactive COBRA).

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dm200
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Re: Between Jobs: Obamacare vs COBRA?

Post by dm200 » Wed Oct 10, 2018 12:01 pm

tjhar wrote:
Wed Oct 10, 2018 11:56 am
If I am between jobs and like to take a break, how do I handle health insurance?
Scenario
Let's presume the scenario as following. I resign in early Nov, my company healthcare extends through end of month (verified this is company's policy). Assume, I want to start new job in Jan and that's when insurance kicks in, I'll be uninsured in Dec.
Questions
1) My understanding is that COBRA used to be the thing, because of pre-existing conditions, but with Obamacare that's now no longer necessary? Has there been legislation/policy changes in recent years that removes the guarantee that Obamacare will cover your insurance regardless of any pre-existing condition?
2) COBRA is retroactive. This is both good and bad. That means I can wait after 30 days to sign up and pay premium, or in this case I can "wait and see" if I need insurance in Dec and signup for it. But the problem with this line of argument is that if you get into accident and in a coma for say 3 mths, you're screwed because by then the COBRA signup window is gone.
Based on these two lines of thought, do you agree Obamacare is probably the safest route? I'm assuming that I can signup for Obamacare in late Nov, and get covered from Dec 1st (and not retroactive COBRA).
Do not assume that health insurance starts when you start the new job. It might be the first of the following month or the first of the next month.

I would go with COBRA because it involves no change of coverage for you and is easy to enroll. ACA, on the other hand can be a more tortuous process.

Although there is this retroactive aspect to COBRA - I always signed up right away and paid - I thought that was the least risky.

tjhar
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Re: Between Jobs: Obamacare vs COBRA?

Post by tjhar » Wed Oct 10, 2018 12:03 pm

dm200 wrote:
Wed Oct 10, 2018 12:01 pm

Do not assume that health insurance starts when you start the new job. It might be the first of the following month or the first of the next month.

I would go with COBRA because it involves no change of coverage for you and is easy to enroll. ACA, on the other hand can be a more tortuous process.

Although there is this retroactive aspect to COBRA - I always signed up right away and paid - I thought that was the least risky.
The biggest issue I see with COBRA is retroactive. I wouldn't mind if I am covered exactly on Dec 1st.

In this situation, assume the very first day when you are off the employer insurance, you get into an accident and into a coma for 6mth. Will COBRA cover that? My understanding is that they only send COBRA paperwork in the middle of the month where you are uninsured!!!

yohac
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Re: Between Jobs: Obamacare vs COBRA?

Post by yohac » Wed Oct 10, 2018 12:06 pm

Obamacare covers pre-existing conditions. I wouldn't wait till late November to sign up though. Seem to recall that you needed to sign up by the 15th of previous month, but I could be wrong.

You have 60 days to sign up for COBRA, normally starting right after your termination. In your scenario, I would probably sign and seal the COBRA paperwork and give it to someone else to drop in the mail, in the event of your ill-timed coma.

RickBoglehead
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Re: Between Jobs: Obamacare vs COBRA?

Post by RickBoglehead » Wed Oct 10, 2018 12:10 pm

Agree on the 60 days, which won't elapse before you start a new job (or so you plan). Then you have 45 more days to make payment.

It will take your company time to even send the paperwork.

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dm200
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Re: Between Jobs: Obamacare vs COBRA?

Post by dm200 » Wed Oct 10, 2018 12:16 pm

tjhar wrote:
Wed Oct 10, 2018 12:03 pm
dm200 wrote:
Wed Oct 10, 2018 12:01 pm
Do not assume that health insurance starts when you start the new job. It might be the first of the following month or the first of the next month.
I would go with COBRA because it involves no change of coverage for you and is easy to enroll. ACA, on the other hand can be a more tortuous process.
Although there is this retroactive aspect to COBRA - I always signed up right away and paid - I thought that was the least risky.
The biggest issue I see with COBRA is retroactive. I wouldn't mind if I am covered exactly on Dec 1st.
In this situation, assume the very first day when you are off the employer insurance, you get into an accident and into a coma for 6mth. Will COBRA cover that? My understanding is that they only send COBRA paperwork in the middle of the month where you are uninsured!!!
It has been quite a few years since I had COBRA, but I thought I as able to sign up very quickly.

In the scenario you cite, maybe designating a friend/relative with a Power of Attorney to handle this for you.

yohac
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Re: Between Jobs: Obamacare vs COBRA?

Post by yohac » Wed Oct 10, 2018 12:23 pm

tjhar wrote:
Wed Oct 10, 2018 12:03 pm
My understanding is that they only send COBRA paperwork in the middle of the month where you are uninsured!!!
That should not be the case. You should get it within a few days after termination.

Golfview
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Re: Between Jobs: Obamacare vs COBRA?

Post by Golfview » Wed Oct 10, 2018 12:27 pm

If you look into the Obama care you may want to start in the new year because depending on what your income is so for this year you may or may not qualify for the subsidy and if you don't you'll be on the hook for a higher cost plan then the cobra!be careful going forward.

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dm200
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Re: Between Jobs: Obamacare vs COBRA?

Post by dm200 » Wed Oct 10, 2018 12:27 pm

yohac wrote:
Wed Oct 10, 2018 12:23 pm
tjhar wrote:
Wed Oct 10, 2018 12:03 pm
My understanding is that they only send COBRA paperwork in the middle of the month where you are uninsured!!!
That should not be the case. You should get it within a few days after termination.
Depending on the company and other details, you might be able to pick it up in person sooner.

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samsoes
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Re: Between Jobs: Obamacare vs COBRA?

Post by samsoes » Wed Oct 10, 2018 12:28 pm

Contrary to media hype, no changes have been made in ACA coverage (pre-existing conditions, or anything else).

What has changed is the money machinations behind the scenes which cause premiums to rise sharply and may result in insurers leaving the marketplaces. If you keep your MAGI in the sweet-spot, you could end up paying very low premiums with low deductibles. For this year, you're likely way past the sweet-spot, since it will be November.

I'd opt for COBRA for December, and then ACA effective Jan 1 during the upcoming open enrollment period, and carefully manage my income throughout 2019 to land in the sweet spot.

If you don't sign up for ACA during the open enrollment period, you'll be stuck with COBRA until the next open enrollment effective policy year 2020.

(Note: Also changed is the coverage penalty. The mandate to have health insurance is still law, but the penalty amount will be $0 in 2019.)
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Dottie57
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Re: Between Jobs: Obamacare vs COBRA?

Post by Dottie57 » Wed Oct 10, 2018 12:32 pm

dm200 wrote:
Wed Oct 10, 2018 12:01 pm
tjhar wrote:
Wed Oct 10, 2018 11:56 am
If I am between jobs and like to take a break, how do I handle health insurance?
Scenario
Let's presume the scenario as following. I resign in early Nov, my company healthcare extends through end of month (verified this is company's policy). Assume, I want to start new job in Jan and that's when insurance kicks in, I'll be uninsured in Dec.
Questions
1) My understanding is that COBRA used to be the thing, because of pre-existing conditions, but with Obamacare that's now no longer necessary? Has there been legislation/policy changes in recent years that removes the guarantee that Obamacare will cover your insurance regardless of any pre-existing condition?
2) COBRA is retroactive. This is both good and bad. That means I can wait after 30 days to sign up and pay premium, or in this case I can "wait and see" if I need insurance in Dec and signup for it. But the problem with this line of argument is that if you get into accident and in a coma for say 3 mths, you're screwed because by then the COBRA signup window is gone.
Based on these two lines of thought, do you agree Obamacare is probably the safest route? I'm assuming that I can signup for Obamacare in late Nov, and get covered from Dec 1st (and not retroactive COBRA).
Do not assume that health insurance starts when you start the new job. It might be the first of the following month or the first of the next month.

I would go with COBRA because it involves no change of coverage for you and is easy to enroll. ACA, on the other hand can be a more tortuous process.

Although there is this retroactive aspect to COBRA - I always signed up right away and paid - I thought that was the least risky.
Use cobra. Sign up right away- I didn’t and had to pay for a doctor’s visit. Doctor’s office doesn’t want to refund.

tjhar
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Re: Between Jobs: Obamacare vs COBRA?

Post by tjhar » Wed Oct 10, 2018 12:44 pm

Dottie57 wrote:
Wed Oct 10, 2018 12:32 pm
Use cobra. Sign up right away- I didn’t and had to pay for a doctor’s visit. Doctor’s office doesn’t want to refund.
So if I setup to resign in the first week, that means the paperwork should arrive by end of the month, and COBRA will kick in on Dec? Nov is covered by employer's insurance.

bhsince87
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Re: Between Jobs: Obamacare vs COBRA?

Post by bhsince87 » Wed Oct 10, 2018 12:56 pm

Not enough information to decide.

What is the cost of COBRA and the cost of the ACA plan?

What is your income level? Is it just you, or you +spouse+ family?

What are the deductable and copays of your current plans vs the ACA plan? Have you met the deductable this year on your current plan?

What Drs, hostpitals, etc does your current plan cover versus the ACA?

Do you have another job lined up already, and if so, how long untill you start there and when does it's insurance kick in?

How long can you stay on COBRA?

If you can't answer these, i'd just stay on COBRA until you can work through the details.
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Dottie57
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Re: Between Jobs: Obamacare vs COBRA?

Post by Dottie57 » Wed Oct 10, 2018 1:22 pm

tjhar wrote:
Wed Oct 10, 2018 12:44 pm
Dottie57 wrote:
Wed Oct 10, 2018 12:32 pm
Use cobra. Sign up right away- I didn’t and had to pay for a doctor’s visit. Doctor’s office doesn’t want to refund.
So if I setup to resign in the first week, that means the paperwork should arrive by end of the month, and COBRA will kick in on Dec? Nov is covered by employer's insurance.

Sign up ASAP, and you will be fine. Paper worker has to arrive in a timely fashion. I **think** it’s 10 days. Ask HR for timing.

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dm200
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Re: Between Jobs: Obamacare vs COBRA?

Post by dm200 » Wed Oct 10, 2018 1:28 pm

While ACA might be financially better, from my wife's experience signing up and getting off when Medicare kicked in - it was not a "seamless" process. Lots of phone calls, several attempts to be enrolled before it worked, etc. In my opinion, this ACA hassle would be worth it for a longer time to be on ACA, for a short period - I would go with COBRA.

tjhar
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Re: Between Jobs: Obamacare vs COBRA?

Post by tjhar » Wed Oct 10, 2018 2:02 pm

bhsince87 wrote:
Wed Oct 10, 2018 12:56 pm
Not enough information to decide.

What is the cost of COBRA and the cost of the ACA plan?

What is your income level? Is it just you, or you +spouse+ family?

What are the deductable and copays of your current plans vs the ACA plan? Have you met the deductable this year on your current plan?

What Drs, hostpitals, etc does your current plan cover versus the ACA?

Do you have another job lined up already, and if so, how long untill you start there and when does it's insurance kick in?

How long can you stay on COBRA?

If you can't answer these, i'd just stay on COBRA until you can work through the details.
- How do I find out the COBRA plan costs? My employer health insurance costs $120+/mth, so I'm guessing it's $500/mth unsubsidized? ACA is $250-350/mth.

- It's just me, but I'm too rich for the subsidy thing

- I've not used my plan for any major thing this year. Deductible, OOP limits are better for employer plan by several $1000

- COBRA vs ACA will be different network, I've not look into details

- Yes, the plan is have a job lined up. I'll check that but no more than 2 month gap in employer covered insurance.

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dm200
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Re: Between Jobs: Obamacare vs COBRA?

Post by dm200 » Wed Oct 10, 2018 2:06 pm

- Yes, the plan is have a job lined up. I'll check that but no more than 2 month gap in employer covered insurance.
Yes - check it out. As I posted, many employers delay employee coverage for several months after being employed.

RickBoglehead
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Re: Between Jobs: Obamacare vs COBRA?

Post by RickBoglehead » Wed Oct 10, 2018 2:09 pm

tjhar wrote:
Wed Oct 10, 2018 2:02 pm
bhsince87 wrote:
Wed Oct 10, 2018 12:56 pm
Not enough information to decide.

What is the cost of COBRA and the cost of the ACA plan?

What is your income level? Is it just you, or you +spouse+ family?

What are the deductable and copays of your current plans vs the ACA plan? Have you met the deductable this year on your current plan?

What Drs, hostpitals, etc does your current plan cover versus the ACA?

Do you have another job lined up already, and if so, how long untill you start there and when does it's insurance kick in?

How long can you stay on COBRA?

If you can't answer these, i'd just stay on COBRA until you can work through the details.
- How do I find out the COBRA plan costs? My employer health insurance costs $120+/mth, so I'm guessing it's $500/mth unsubsidized? ACA is $250-350/mth.
Most employers pay close to 90% of insurance cost, your cost will likely be $1,200 or higher a month.

Gryphon
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Re: Between Jobs: Obamacare vs COBRA?

Post by Gryphon » Wed Oct 10, 2018 2:26 pm

tjhar wrote:
Wed Oct 10, 2018 2:02 pm
- How do I find out the COBRA plan costs? My employer health insurance costs $120+/mth, so I'm guessing it's $500/mth unsubsidized? ACA is $250-350/mth.
Your employer is the only one who can tell you what your COBRA premiums will be - it varies widely from one firm to the next.

As for the timing: When I left my job last year near the end of January, I was covered by my former employer's insurance until the end of February. They wouldn't let me sign up for COBRA coverage until after I was officially off the payroll (so no signing up before I left), but I was able to sign up for it in early February before the employee insurance coverage ended. The retroactive signup provision is there for people who get fired or laid off with no notice, but you're not required to wait until after your old insurance runs out.
Last edited by Gryphon on Wed Oct 10, 2018 2:34 pm, edited 1 time in total.

bhsince87
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Re: Between Jobs: Obamacare vs COBRA?

Post by bhsince87 » Wed Oct 10, 2018 2:31 pm

Your employer will tell you how much the actual cost will be. I guess that could be sort of a tricky thing to ask though, if you don't want them to know you're thinking about leaving.

I think most employers are required to put the total cost on W-2s at the end of the year. You might want to look on your W-2 from last year. Then add maybe 8% for an YOY increase and 2% for admin costs that they are allowed to charge you.

ACA costs can be found at healthcare.gov. You answer some questions and it provides you with a list of options in your area. Our state still has 2018 numbers, but it should be close.
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LawyersGunsAndMoney
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Re: Between Jobs: Obamacare vs COBRA?

Post by LawyersGunsAndMoney » Wed Oct 10, 2018 2:39 pm

The question would be cost of COBRA plan vs. cost of ACA Exchange plan.

COBRA cost will be the full, unsubsidized cost of your employer's health-plan. HR should be able to provide this to you. Should also be aware that employer may change health plans or premiums (ours renews Nov 1st for upcoming year).

When I have used COBRA in the past, I have signed the paperwork and cut the check, and then left that in an envelope in the possession of my wife - so in the event that I was disabled and unconcious in some kind of an event/accident, all she would have to do is mail in my retroactive enrollment.

ACA open enrollment is (I believe) Nov 1-Dec 15th, but if you lose employer-based insurance on Dec 1, you would be eligible for a special enrollment period for the following 60 days through Jan 30th. If you elect to take COBRA but then cancel it - that does NOT trigger a special enrollment period for ACA Exchange-based plans.

Lastly - some companies provide employees with COBRA paperwork on their way out the door on final day. Others can take weeks to send.

TravelGeek
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Re: Between Jobs: Obamacare vs COBRA?

Post by TravelGeek » Wed Oct 10, 2018 2:57 pm

bhsince87 wrote:
Wed Oct 10, 2018 2:31 pm
I think most employers are required to put the total cost on W-2s at the end of the year. You might want to look on your W-2 from last year. Then add maybe 8% for an YOY increase and 2% for admin costs that they are allowed to charge you.

Yes, box 12, code DD.

I just came back from mailing my COBRA election and check. It took my former employer's outsourced COBRA administrator a week to get the paperwork to me.

Now that I have signed up for COBRA for the rest of the year (primarily for ease of continuity), I will evaluate the available ACA plans during the upcoming enrollment period.

TravelGeek
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Re: Between Jobs: Obamacare vs COBRA?

Post by TravelGeek » Wed Oct 10, 2018 3:01 pm

RickBoglehead wrote:
Wed Oct 10, 2018 2:09 pm
tjhar wrote:
Wed Oct 10, 2018 2:02 pm

- How do I find out the COBRA plan costs? My employer health insurance costs $120+/mth, so I'm guessing it's $500/mth unsubsidized? ACA is $250-350/mth.
Most employers pay close to 90% of insurance cost, your cost will likely be $1,200 or higher a month.
COBRA cost is $1300 for my EPO plan, covering my wife and myself. Additionally (and optionally), $110 for dental and $30 for vision. ACA wouldn't cover those, I believe.

Mitchell777
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Re: Between Jobs: Obamacare vs COBRA?

Post by Mitchell777 » Wed Oct 10, 2018 3:05 pm

Check the ACA price. A couple years ago it was ~ $1500 per month for me (1 person), no dental and no vision. That was because my income was > $49K. COBRA cost me $665/month incl dental and vision. Similar deductibles ($1500 I think)

Church Lady
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Re: Between Jobs: Obamacare vs COBRA?

Post by Church Lady » Wed Oct 10, 2018 3:47 pm

I'm assuming that I can signup for Obamacare in late Nov, and get covered from Dec 1st (and not retroactive COBRA).
My COBRA will expire at end of November. I have to get coverage for the month of December. I could choose ACA or retiree health care for one month. Then I have to choose and enroll AGAIN for 2019 coverage. For one month of coverage, I'll go with retiree health care. I'll put the research effort into evaluating my options for 2019. Without knowing costs, I'd suggest you do COBRA to finish out 2018 and use your time and energy to research 2019 coverage options.

For me, COBRA was cheaper than unsubsidized ACA.

Good luck!
He that loveth silver shall not be satisfied with silver; nor he that loveth abundance with increase: this is also vanity. Ecclesiastes 1:8

HereToLearn
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Re: Between Jobs: Obamacare vs COBRA?

Post by HereToLearn » Wed Oct 10, 2018 4:30 pm

Another reason you may want to elect COBRA coverage is that amounts satisfied toward your deductible and out-of-pocket will carry over to the COBRA plan for the remainder of the year, whereas if you elect ACA plan now, you will have to satisfy a new deductible in 2018 and again in Jan 2019.

michaeljc70
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Re: Between Jobs: Obamacare vs COBRA?

Post by michaeljc70 » Wed Oct 10, 2018 6:22 pm

My employer insurance ran out 8/30. I chose to do the "wait and see" with retro Cobra option. No insurance Sept/Oct unless I need it and the claims paid would amount to > cost of 2 months COBRA. For 11/1, I will be going to an ACA plan. The ACA plan will save me about $1000 for two months, but will basically cover only big expenses ($7200 deductible).

I am not sure how long you plan on being "between jobs" or what you make. If your income is low enough, you can get a subsidy on ACA plans. The ACA plans, generally, are more expensive with worse coverage than an employer plan. I will get no subsidy this year, but if I don't work next year (up in the air), I will get a subsidy so it doesn't make sense to go with COBRA for me as we really have no big pre-existing conditions or immediate healthcare needs.

If you're really worried about winding up in a coma or something like that, sign the Cobra form, add a check and put it in a stamped envelope and give it to someone to hold in case of emergency.

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teen persuasion
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Re: Between Jobs: Obamacare vs COBRA?

Post by teen persuasion » Wed Oct 10, 2018 9:44 pm

We learned the hard way :oops: when DH was between jobs that you must be approved before the 15th of the prior month for ACA coverage to be effective on the first of the month. That is, apply and be approved before Nov 15th to begin coverage on Dec 1.

Also learned that ACA subsidies and state Medicaid use conflicting income tests. ACA looks at annual AGI, but Medicaid looks at monthly income. I'd calculated our annual AGI, and thought we'd qualify for ACA subsidies, but DH's zero income for the months when between jobs meant we qualified for Medicaid, whether we wanted it or not. If Medicaid eligible, you are automatically ineligible for ACA subsidies.

If you opt to pursue ACA coverage, use a healthcare navigator - they know all the gotchas to applying.

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dm200
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Re: Between Jobs: Obamacare vs COBRA?

Post by dm200 » Thu Oct 11, 2018 9:31 am

teen persuasion wrote:
Wed Oct 10, 2018 9:44 pm
We learned the hard way :oops: when DH was between jobs that you must be approved before the 15th of the prior month for ACA coverage to be effective on the first of the month. That is, apply and be approved before Nov 15th to begin coverage on Dec 1.

Also learned that ACA subsidies and state Medicaid use conflicting income tests. ACA looks at annual AGI, but Medicaid looks at monthly income. I'd calculated our annual AGI, and thought we'd qualify for ACA subsidies, but DH's zero income for the months when between jobs meant we qualified for Medicaid, whether we wanted it or not. If Medicaid eligible, you are automatically ineligible for ACA subsidies.

If you opt to pursue ACA coverage, use a healthcare navigator - they know all the gotchas to applying.
That is especially a problem in states that have not approved Medicaid expansion. Lots of folks in such states have too little income to qualify for ACA subsidies and too much to get Medicaid. Our state, finally, has approved Medicaid expansion effective January 1.

miriamele
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Re: Between Jobs: Obamacare vs COBRA?

Post by miriamele » Thu Oct 11, 2018 1:21 pm

Previous posters are correct - you have 60 days to elect COBRA from your qualifying event (loss of coverage) and 45 days to make your first payment. So this can be stretched to 105 days. If you do this then the coverage is retroactive with no gap. You may have issues getting out of pocket expenses reimbursed but the coverage is there. Basically a safety net in case something 'big' happens.

As for cost, it is 102% of the total cost of the coverage. So comparing with ACA plans is a good idea but also consider any disruption and change of providers in the decision. In terms of new coverage, I believe the max wait is 90 days and I usually see first of the month following hire or first of the month following 30 days.

Good luck with the big changes.

DelcoEE
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Re: Between Jobs: Obamacare vs COBRA?

Post by DelcoEE » Thu Oct 11, 2018 2:34 pm

Mitchell777 wrote:
Wed Oct 10, 2018 3:05 pm
Check the ACA price. A couple years ago it was ~ $1500 per month for me (1 person), no dental and no vision. That was because my income was > $49K. COBRA cost me $665/month incl dental and vision. Similar deductibles ($1500 I think)
You make a very good point. It is important thing to estimate MAGI. I think if your MAGI is greater than 4X federal poverty level (FPL) you fall off the subsidy cliff.

This article will give you some insight even though it is around 5 years old

Stay Off the Obamacare ACA Premium Subsidy Cliff

https://thefinancebuff.com/stay-under-o ... cliff.html

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