COBRA Experts Needed: Newborn Coverage

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G-Money
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COBRA Experts Needed: Newborn Coverage

Post by G-Money » Tue Jun 12, 2018 2:43 pm

I will be leaving my current job at the end of the month. Health insurance at my new employer begins on the 31st day of employment. We’re expecting a baby in mid-July. Spouse and children are and will be covered under my health insurance policy.

What I think I know:
  • Coverage under COBRA can be elected within 60 days of separation, with the first premium payment due 45 days after separation.
  • Coverage can be elected for spouse (who was covered under plan during employment) without electing coverage for employee or other beneficiaries (for example, other children).
  • Newborns can obtain coverage under COBRA within 30 days of birth
Now for my questions:
  • Does the employee need to elect coverage for himself and/or all other beneficiaries for a newborn to be eligible to get coverage under COBRA? Or is it sufficient for the non-employee spouse to be the only one covered?
  • Does the requirement to pay premiums within 45 days of separation apply to subsequently-added newborns? How does this work as a practical matter? Assume the baby is born later in the month, i.e., late July, and the Social Security # is not obtained until more than 45 days after separation.
Although this is not my first rodeo as a parent, I’ve never needed to navigate COBRA before. Any help would be greatly appreciated.
Don't assume I know what I'm talking about.

BeneIRA
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Re: COBRA Experts Needed: Newborn Coverage

Post by BeneIRA » Tue Jun 12, 2018 5:17 pm

G-Money wrote:
Tue Jun 12, 2018 2:43 pm
I will be leaving my current job at the end of the month. Health insurance at my new employer begins on the 31st day of employment. We’re expecting a baby in mid-July. Spouse and children are and will be covered under my health insurance policy.

What I think I know:
  • Coverage under COBRA can be elected within 60 days of separation, with the first premium payment due 45 days after separation.
  • Coverage can be elected for spouse (who was covered under plan during employment) without electing coverage for employee or other beneficiaries (for example, other children).
  • Newborns can obtain coverage under COBRA within 30 days of birth
Now for my questions:
  • Does the employee need to elect coverage for himself and/or all other beneficiaries for a newborn to be eligible to get coverage under COBRA? Or is it sufficient for the non-employee spouse to be the only one covered?
  • Does the requirement to pay premiums within 45 days of separation apply to subsequently-added newborns? How does this work as a practical matter? Assume the baby is born later in the month, i.e., late July, and the Social Security # is not obtained until more than 45 days after separation.
Although this is not my first rodeo as a parent, I’ve never needed to navigate COBRA before. Any help would be greatly appreciated.
1. COBRA coverage has to be elected within 60 days of the coverage termination or when the notice is sent out. Most companies outsource COBRA these days, so typically companies go by the notice period, which typically gives you a few extra days.

2. Correct, coverage can be continued for your Spouse only. However, and this is a big however, some plans will reset the deductible/out of pocket maximum if you change tiers mid-year, which this would be. Make sure to call the insurance company and check your summary plan description for more information. Some people get some nasty surprises when they change tiers or plans mid year and get a very large hospital bill in the mail.

3. You have 45 days from the date of enrollment to make the first payment even if you add on new dependents via a qualified life event. So, you can't enroll on day 50, wait until day 90 and then notify the COBRA administrator that on day 80, you had a baby and to add them, so you get 45 more days to pay. You would still have to pay. in that case, on day 95.

What you should do if you are concerned with coverage at your new employer: Wait until five or so days before the end of the 60 day window, which would be printed on your COBRA Enrollment Notice. Enroll your newborn immediately after they are born, wait until day 90 (5 days before the end of the window to make the first payment) to decide if you want to pay the coverage for those three months.

Here is a huge misconception with newborns. You do not need the SSN to add them to coverage. There is an exception to add newborns to coverage without an SSN. Do not wait until you get their SSN.

Best of luck and congratulations!

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G-Money
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Re: COBRA Experts Needed: Newborn Coverage

Post by G-Money » Tue Jun 12, 2018 8:48 pm

Thanks BeneIRA!

Good catch regarding the possibility of the deductible resetting. I’ll look into it to see what my plan says. Thanks also for clarifying the rules regarding social security numbers.
BeneIRA wrote:
Tue Jun 12, 2018 5:17 pm
What you should do if you are concerned with coverage at your new employer: Wait until five or so days before the end of the 60 day window, which would be printed on your COBRA Enrollment Notice. Enroll your newborn immediately after they are born, wait until day 90 (5 days before the end of the window to make the first payment) to decide if you want to pay the coverage for those three months.
This makes sense to me! Thanks!

Bonus question: Am I correct that I won’t owe any ACA penalty if everyone in my household has insurance for at least 11 months in 2018? My spouse and probably the newborn will obviously have it for 12, but the rest of us are unlikely to need coverage in July while we are in the window to elect COBRA before new employer’s insurance kicks in.
Don't assume I know what I'm talking about.

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Pajamas
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Re: COBRA Experts Needed: Newborn Coverage

Post by Pajamas » Tue Jun 12, 2018 9:10 pm

Yes, no penalty if you are not covered for one or two months.

https://www.healthcare.gov/health-cover ... m-the-fee/

mouses
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Re: COBRA Experts Needed: Newborn Coverage

Post by mouses » Wed Jun 13, 2018 2:55 am

G-Money wrote:
Tue Jun 12, 2018 2:43 pm
I will be leaving my current job at the end of the month. Health insurance at my new employer begins on the 31st day of employment.
I've never had a job where health insurance didn't start immediately... What is this nonsense? All their new employees and their families are supposed to be uninsured for a month?

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G-Money
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Re: COBRA Experts Needed: Newborn Coverage

Post by G-Money » Wed Jun 13, 2018 9:08 am

Pajamas wrote:
Tue Jun 12, 2018 9:10 pm
Yes, no penalty if you are not covered for one or two months.

https://www.healthcare.gov/health-cover ... m-the-fee/
Thanks!
Don't assume I know what I'm talking about.

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Pajamas
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Re: COBRA Experts Needed: Newborn Coverage

Post by Pajamas » Wed Jun 13, 2018 10:12 am

mouses wrote:
Wed Jun 13, 2018 2:55 am
G-Money wrote:
Tue Jun 12, 2018 2:43 pm
I will be leaving my current job at the end of the month. Health insurance at my new employer begins on the 31st day of employment.
I've never had a job where health insurance didn't start immediately... What is this nonsense? All their new employees and their families are supposed to be uninsured for a month?
90 days is not uncommon and that limit exists only since 2014 because of the ACA. The 90 days may start only after an orientation period and the ACA also tightened that common loophole by limiting the orientation period to 30 days, so the maximum wait should be only 120 days now.

mouses
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Re: COBRA Experts Needed: Newborn Coverage

Post by mouses » Wed Jun 13, 2018 12:05 pm

Pajamas wrote:
Wed Jun 13, 2018 10:12 am
mouses wrote:
Wed Jun 13, 2018 2:55 am
G-Money wrote:
Tue Jun 12, 2018 2:43 pm
I will be leaving my current job at the end of the month. Health insurance at my new employer begins on the 31st day of employment.
I've never had a job where health insurance didn't start immediately... What is this nonsense? All their new employees and their families are supposed to be uninsured for a month?
90 days is not uncommon and that limit exists only since 2014 because of the ACA. The 90 days may start only after an orientation period and the ACA also tightened that common loophole by limiting the orientation period to 30 days, so the maximum wait should be only 120 days now.
I don't understand how this works. Is ACA supposed to cover people in that interval? Or does it say immediate employer insurance is not necessary?

ShowMeTheER
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Re: COBRA Experts Needed: Newborn Coverage

Post by ShowMeTheER » Wed Jun 13, 2018 12:41 pm

mouses wrote:
Wed Jun 13, 2018 12:05 pm
Pajamas wrote:
Wed Jun 13, 2018 10:12 am
mouses wrote:
Wed Jun 13, 2018 2:55 am
G-Money wrote:
Tue Jun 12, 2018 2:43 pm
I will be leaving my current job at the end of the month. Health insurance at my new employer begins on the 31st day of employment.
I've never had a job where health insurance didn't start immediately... What is this nonsense? All their new employees and their families are supposed to be uninsured for a month?
90 days is not uncommon and that limit exists only since 2014 because of the ACA. The 90 days may start only after an orientation period and the ACA also tightened that common loophole by limiting the orientation period to 30 days, so the maximum wait should be only 120 days now.
I don't understand how this works. Is ACA supposed to cover people in that interval? Or does it say immediate employer insurance is not necessary?
Correct- the law allows a wait period to exist before employer coverage would be required

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Pajamas
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Re: COBRA Experts Needed: Newborn Coverage

Post by Pajamas » Wed Jun 13, 2018 1:56 pm

mouses wrote:
Wed Jun 13, 2018 12:05 pm
I don't understand how this works. Is ACA supposed to cover people in that interval? Or does it say immediate employer insurance is not necessary?
It can cover people during that period but there are other options such as COBRA coverage or private coverage. The ACA addressed many different aspects of health care and health care coverage, not just the creation of the coverage sold on the exchanges. To be clear, the ACA tightened up the interval that employers required to offer health coverage can wait before offering it. Effective repeal of the ACA legislation would have far-reaching consequences well beyond the availability of the coverage offered on the exchanges.

The underlying problem with health coverage in the U.S. is that it is often linked to employment. This is unusual compared to other developed nations. It is a legacy of wage controls during WWII. Employers could not offer more pay to attract workers but they could offer more benefits and insurance was one of them.

Health coverage should be separated from employment status. It would go a long way towards promoting "the general Welfare" of the "People of the United States" as the Constitution so eloquently states.

mouses
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Re: COBRA Experts Needed: Newborn Coverage

Post by mouses » Wed Jun 13, 2018 3:15 pm

Pajamas wrote:
Wed Jun 13, 2018 1:56 pm
Health coverage should be separated from employment status. It would go a long way towards promoting "the general Welfare" of the "People of the United States" as the Constitution so eloquently states.
If I could go back in time, I'd ask my granddad, Why did you emigrate from Denmark to the U.S.? What were you thinking? :-)

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dm200
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Re: COBRA Experts Needed: Newborn Coverage

Post by dm200 » Wed Jun 13, 2018 3:42 pm

mouses wrote:
Wed Jun 13, 2018 2:55 am
G-Money wrote:
Tue Jun 12, 2018 2:43 pm
I will be leaving my current job at the end of the month. Health insurance at my new employer begins on the 31st day of employment.
I've never had a job where health insurance didn't start immediately... What is this nonsense? All their new employees and their families are supposed to be uninsured for a month?
Out of college 50+ years ago. My first job was with a Megacorp and, back then, coverage was immediate. With another megacorp a few years later, it was also immediate. In recent years, it has become much more common (at least with private employers) that coverage is delayed for a period of time. One common "thresshold" is the first of the month following being employed for one month. That may be almost 2 months.

You are and have been very fortunate. This called "cost savings".

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