Skipping last COBRA payment

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Golfview
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Skipping last COBRA payment

Post by Golfview » Thu Dec 06, 2018 8:29 pm

I'm ready to finish taking cobra insurance 1 year earlier than expected,I qualify for obama care starting the new year due to a drop in income as I have retired this past July at 62.
I was on auto pay the 8 th day of every month, after finding out that I have til the last day of the month to make the payment for this last month I'll wait til the last day,if nothing happens medical I won't pay.
I'll technically have no insurance after the 8th unless I make payment by the last day of the month,then it's retroactive for the entire month! To me it's a no brainer to save the 1200 dollar payment.
I though I would share this as a perfectly good way to save some money! I know i have to be careful doing this since there is a chance I'll be scrambling the last minute to make a payment should a medical emergency come up!

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LadyGeek
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Re: Skipping last cobra payment

Post by LadyGeek » Thu Dec 06, 2018 8:42 pm

This thread is now in the Personal Finance (Not Investing) forum (insurance).
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nolesrule
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Re: Skipping last cobra payment

Post by nolesrule » Thu Dec 06, 2018 8:47 pm

You may want someone on retainer to make the payment on your behalf in the case you are incapable for medical reasons.

Golfview
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Re: Skipping last cobra payment

Post by Golfview » Thu Dec 06, 2018 8:54 pm

Thank you for your concern,I have informed my wife of the plan and will also inform my son as what to do in the event something unexpected should happen to me ,I have written instructions explaining what needs to be done,I'm in good health and should be good without any worry.

curmudgeon
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Re: Skipping last cobra payment

Post by curmudgeon » Fri Dec 07, 2018 12:01 am

While it may be tempting, there may be some downsides. This isn't like the delayed signup using the grace period on the front end (which people do sometimes when changing jobs). In this case you *may* have a contractual responsibility to make the payment unless you cancelled at the appropriate time. While they might just let it go, it might be they could also start posting it as a late/unpaid bill on your credit report. The other factor is that you would not have "continuous creditable insurance coverage"; this one's less likely to be an issue, but pre-ACA that could create issues.

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BolderBoy
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Re: Skipping last cobra payment

Post by BolderBoy » Fri Dec 07, 2018 4:32 pm

Golfview wrote:
Thu Dec 06, 2018 8:29 pm
I though I would share this as a perfectly good way to save some money!
I would leave the word "good" out of your sentence.

The insurance company is acting in "good" faith and you are not.
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euroswiss
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Re: Skipping last cobra payment

Post by euroswiss » Fri Dec 07, 2018 5:10 pm

BolderBoy wrote:
Fri Dec 07, 2018 4:32 pm
Golfview wrote:
Thu Dec 06, 2018 8:29 pm
I though I would share this as a perfectly good way to save some money!
I would leave the word "good" out of your sentence.

The insurance company is acting in "good" faith and you are not.
This! Unless your Cobra agreement says otherwise, it sounds like you are ripping off the insurance provider. Basically, you are advocating theft. I'm very surprised this post is allowed on this forum.

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LadyGeek
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Re: Skipping last cobra payment

Post by LadyGeek » Fri Dec 07, 2018 5:17 pm

I want to address several comments related to skipping the last COBRA payment. For the record, discussions of dishonest behavior or bypassing the law are totally unacceptable.

The intent is to understand how to do this within the existing legal framework; in which case the discussion can continue.

Everything is a matter of degree. The choice of using a tax deferred account, e.g. IRA, to avoid taxes during some period of time is one extreme, managing assets to qualify for Medicaid is the other. Gifting assets to avoid taxes is somewhere in the middle. The bottom line is to work within the legal framework. Ethics is the ever present elephant in the room.

The approach is to educate members on how to do things legally. State your points in a factual manner. If the intent strays from this objective, please report the post and we'll investigate.

Update: Post revised, the thread is no longer locked. See below.
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LadyGeek
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Re: Skipping last cobra payment

Post by LadyGeek » Fri Dec 07, 2018 7:37 pm

After receiving a PM, there is a recent thread which discusses deferment of COBRA payments for 60 days. See: Subject: Select Cobra or other short term health insurance?
willyd123 wrote:
Fri Nov 23, 2018 2:53 pm
I think she'd have at least the following options:
...
3. Utilize Cobra. I noted that you are not sure when existing benefits will cease with the existing employer but she MAY be able to coverage via Cobra and never have to pay for it. Even if you can't find any other insurance options and need to use COBRA, you don't need to actually pay for it until you get sick. You have 60 days before you have to elect into COBRA and another 45 days after that before you have to pay. Once you elect, you receive retroactive coverage (Note: you must also make retroactive payments). So basically, don't elect until 60 days after you left the company, and don't ever pay unless you actually get sick and need the coverage (or if 105 days passes and you still don't have real insurance). With this loophole, you can be covered by COBRA for 105 days after losing your job without ever paying a dime. Would this bridge your cousin to when she starts with her new employer?
The above thread was used as the basis for the OP's post. There is no intent of dishonest behavior.

This thread is now unlocked to continue the discussion.
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Golfview
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Re: Skipping last cobra payment

Post by Golfview » Fri Dec 07, 2018 10:36 pm

Euroswiss,
no one is advocating theft as you suggest, Do you have any knowledge of cobra rules and regulations?Perhaps you should get some insight!,People come here to share ways on improving oneself not make comments without any knowledge on the subject such as what you have done.
Have you ever been told because of your age you would be charged many times over the amount?
Maybe you were told you couldn't get coverage because you had a preexisting condition? They are everyday challenges people face .
The insurance companys are playing by the rules so as long as you play by the same rules what laws have you btoken?

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Re: Skipping last cobra payment

Post by euroswiss » Sat Dec 08, 2018 10:14 am

Golfview wrote:
Fri Dec 07, 2018 10:36 pm
Euroswiss,
no one is advocating theft as you suggest, Do you have any knowledge of cobra rules and regulations?Perhaps you should get some insight!,People come here to share ways on improving oneself not make comments without any knowledge on the subject such as what you have done.
Have you ever been told because of your age you would be charged many times over the amount?
Maybe you were told you couldn't get coverage because you had a preexisting condition? They are everyday challenges people face .
The insurance companys are playing by the rules so as long as you play by the same rules what laws have you btoken?
Fair enough - you have your ethics standards, and I have mine. Readers can make up their own minds.

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Re: Skipping last cobra payment

Post by moehoward » Sat Dec 08, 2018 10:52 am

euroswiss wrote:
Sat Dec 08, 2018 10:14 am
Golfview wrote:
Fri Dec 07, 2018 10:36 pm
Euroswiss,
no one is advocating theft as you suggest, Do you have any knowledge of cobra rules and regulations?Perhaps you should get some insight!,People come here to share ways on improving oneself not make comments without any knowledge on the subject such as what you have done.
Have you ever been told because of your age you would be charged many times over the amount?
Maybe you were told you couldn't get coverage because you had a preexisting condition? They are everyday challenges people face .
The insurance companys are playing by the rules so as long as you play by the same rules what laws have you btoken?
Fair enough - you have your ethics standards, and I have mine. Readers can make up their own minds.
I understand both sides of this. Is this unethical, probably but... When I signed up for Cobra I was told many times "don't miss a payment" or they will cancel you. I've (like most) have had many run ins with insurance companies, so I don't have a lot of sympathy. On a side note, I'm glad Cobra was there for me. Cobra is just an administrator for an extension of your company insurance. My question to the insurance companies, why not let me stay with "Cobra" until I'm 65? I'm making all the payments anyway. IMHO, insurance companies (and my former employer) don't want higher risk with older people.

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munemaker
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Re: Skipping last cobra payment

Post by munemaker » Sat Dec 08, 2018 10:54 am

Great tip, but too late for me. I could have used this last year for vision & dental COBRA if I had known.

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Earl Lemongrab
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Re: Skipping last cobra payment

Post by Earl Lemongrab » Sat Dec 08, 2018 1:46 pm

The situations are not symmetric. When you defer initial COBRA payments, you do NOT have insurance. You can get it retroactively by paying, but you are not insured. In the case presented, the OP has insurance coverage that he or she later refuses to pay for.

I believe that this is actually dishonest and possibly illegal behavior. I don't see how it's any different than signing up for any other service, then not paying if you didn't "use" it. That's not the terms of service you agreed to.
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cpumechanic
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Re: Skipping last cobra payment

Post by cpumechanic » Sat Dec 08, 2018 3:09 pm

I would not do this, (Skip the last payment) and my reply is a little off topic.

I used cobra for 8 months, and also qualified for ACA care due to reduced income.

I paid the last month of Cobra, and signed up for ACA starting Jan 1 of the next year. Around April I noticed that the old insurance was still paying for wifes expensive medications, and so we called them to inform them that this was incorrect, and we had other insurance. They agreed but still ended up covering most of the Bills for J, F, M.. . Both insurance companies were informed of the error, and I never heard anything more about it.

So.. my advice is.. if/when you end Cobra, call them and make sure they understand you are cancelling, since non payment (in my case) did not work as effectively as I assumed it would.

I am not a big fan of the way health insurance works in the US.. but I guess, I am not put on a 6 month waiting list for service, and they pay what they have agreed to pay so I can complain, but the system does work it's just way to expensive. (Cheaper then dying tho LOL)

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Re: Skipping last cobra payment

Post by Stinky » Sun Dec 09, 2018 10:12 am

I take a different position than many of the folks who have posted here. You're being given an option to receive insurance coverage and to pay in arrears. This gives you the chance to get one month of "free" coverage at the end of the period - you can pay for it if you need it, and not pay for it if you didn't use it.

I regard this as a "free" option that is given by the insurance company. The cost of it is included in their pricing. It's not immoral, or irresponsible, to make use of the options given to me by a financial institution.

A loose analogy in my mind is how some folks use credit cards that have sign-up bonuses. When a credit card company offers, for example, a $100 bonus for making $1,000 of charges in the first three months, they're hoping that people will continue to use the credit card for many months/years in the future so they can recover the initial $100 outlay. There's no way the credit card company can make up the cost of the bonus over the initial $1,000 in charges.

However, I don't regard it as immoral to apply for the card, collect my $100 bonus, and then stop using the credit card. That's an option given to me that I choose to exercise. (But using that option is probably not worth my time).

Another example - Probably there are more than a few folks who, when making a major purchase at a retail store, apply for the store credit card solely to get 20% off the purchase, and then never use the store card again. Same theory - the retailer would like you to use the card again, but you have the option to not do so.
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exigent
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Re: Skipping last cobra payment

Post by exigent » Sun Dec 09, 2018 10:45 am

Years ago, I had a gap of about a month between a job and starting grad school in another state. My grad program didn’t provide health benefits, so the plan was to pick up a major medical policy once I had relocated. This left me with a short gap during which I would have otherwise been uninsured.

I called both the benefits office, as well as the insurance provider at my employer before leaving my job. I received the same advice from both: sign up for cobra but hold off on making the payment. Or maybe it was to hold off on signing up in the first place, as the coverage is retroactive. I can’t recall for sure. But I had 30-60 days to do so, and if I didn’t then my coverage would lapse effective the date of separation. If, on the other hand, I needed the insurance, I could simply sign up/make the premium payment to ensure continued coverage.

So, both the HR office and the insurance company’s phone rep suggested this course of action and I followed it. I never needed the coverage, so I wound up saving a nice chunk of money and I never lost sleep over the supposedly unethical nature of this decision.

As others have noted, you are operating within the rules of the plan/coverage when you do this, just as the insurance company does on their side. They have no qualms about doing what’s in their best interest while staying within the rules, so why should you?

I would only suggest (as has been suggested already) to keep someone in the loop to mail the paperwork/payment in case you have a medical catastrophe and are unable to do it yourself.

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Earl Lemongrab
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Re: Skipping last cobra payment

Post by Earl Lemongrab » Sun Dec 09, 2018 11:09 am

exigent wrote:
Sun Dec 09, 2018 10:45 am
I received the same advice from both: sign up for cobra but hold off on making the payment. Or maybe it was to hold off on signing up in the first place, as the coverage is retroactive. I can’t recall for sure. But I had 30-60 days to do so, and if I didn’t then my coverage would lapse effective the date of separation. If, on the other hand, I needed the insurance, I could simply sign up/make the premium payment to ensure continued coverage.
This is different. The OP already signed up for COBRA and is getting the benefit. Then plans to not pay the final month.
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Re: Skipping last cobra payment

Post by Earl Lemongrab » Sun Dec 09, 2018 11:12 am

Stinky wrote:
Sun Dec 09, 2018 10:12 am
I take a different position than many of the folks who have posted here. You're being given an option to receive insurance coverage and to pay in arrears. This gives you the chance to get one month of "free" coverage at the end of the period - you can pay for it if you need it, and not pay for it if you didn't use it.
Just because you pay for something in arrears doesn't mean you get the option to use it for the service period then decide not to pay. When you have insurance coverage over a period, you are using the service even if you don't have claims. That's different than the initial signup for COBRA, where you do NOT have coverage but can elect to pay retroactively if you need it. That is built in.
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Re: Skipping last cobra payment

Post by Stinky » Sun Dec 09, 2018 11:27 am

Earl Lemongrab wrote:
Sun Dec 09, 2018 11:12 am
Stinky wrote:
Sun Dec 09, 2018 10:12 am
I take a different position than many of the folks who have posted here. You're being given an option to receive insurance coverage and to pay in arrears. This gives you the chance to get one month of "free" coverage at the end of the period - you can pay for it if you need it, and not pay for it if you didn't use it.
Just because you pay for something in arrears doesn't mean you get the option to use it for the service period then decide not to pay. When you have insurance coverage over a period, you are using the service even if you don't have claims. That's different than the initial signup for COBRA, where you do NOT have coverage but can elect to pay retroactively if you need it. That is built in.
Interestingly, taking advantage of the "free" option is exactly what my former employer's HR department advised me to do when I retired. I retired on the 5th of the month, and Medicare was not effective until the 1st day of the next month. I had the option of taking COBRA for the 25 days between retirement date and Medicare effective date. The HR department advised me to pay the premium for the 25 days if I had any claims during that time, and to not pay it if I didn't have any claims. So, I had effectively had "free" insurance for that 25 day period - pay for it if I use it, and don't pay if I don't. Same as the OP.

This is a point on which we may just agree to disagree ...... :D
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Re: Skipping last cobra payment

Post by spectec » Sun Dec 09, 2018 11:41 am

Insurance companies know very well the risks they are taking. I'm confident the insurance company already knows about the potential for this billing anomaly and they have factored into their premium structure the cost associated with the number of people who will actually notice and take advantage of it. I'm also confident this probably won't keep them from harassing the OP for that final premium, maybe even threatening to ding his credit. :)
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Re: Skipping last cobra payment

Post by exigent » Sun Dec 09, 2018 11:48 am

Earl Lemongrab wrote:
Sun Dec 09, 2018 11:09 am
exigent wrote:
Sun Dec 09, 2018 10:45 am
I received the same advice from both: sign up for cobra but hold off on making the payment. Or maybe it was to hold off on signing up in the first place, as the coverage is retroactive. I can’t recall for sure. But I had 30-60 days to do so, and if I didn’t then my coverage would lapse effective the date of separation. If, on the other hand, I needed the insurance, I could simply sign up/make the premium payment to ensure continued coverage.
This is different. The OP already signed up for COBRA and is getting the benefit. Then plans to not pay the final month.
But the end result is the same. As you said in a subsequent comment, just because you don't make a claim doesn't mean that you aren't using the "service." In my case, I was effectively using the service during that month gap in the same way that OP would be using the service in the final month of his/her coverage. And yet the guidance that I received from both HR and the CSR at the insurance company was to essentially string the insurance company along and only pay if I ended up needing to file claims.

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Earl Lemongrab
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Re: Skipping last cobra payment

Post by Earl Lemongrab » Sun Dec 09, 2018 1:28 pm

Stinky wrote:
Sun Dec 09, 2018 11:27 am
Interestingly, taking advantage of the "free" option is exactly what my former employer's HR department advised me to do when I retired. I retired on the 5th of the month, and Medicare was not effective until the 1st day of the next month. I had the option of taking COBRA for the 25 days between retirement date and Medicare effective date. The HR department advised me to pay the premium for the 25 days if I had any claims during that time, and to not pay it if I didn't have any claims. So, I had effectively had "free" insurance for that 25 day period - pay for it if I use it, and don't pay if I don't. Same as the OP.
You did not have insurance. You would have found that out if you had encountered a need for medical attention. You would have been treated as a cash patient until you got COBRA. You had the option to get coverage retroactively. That's because it takes time for the company to send out the paperwork and the policyholder to return it. That is built into the policy.

Skipping the last month payment when you already elected it is not the same thing. Why do people keep bringing up the grace period to sign up when that's not being discussed? Reread the OP.
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Re: Skipping last cobra payment

Post by Earl Lemongrab » Sun Dec 09, 2018 1:30 pm

exigent wrote:
Sun Dec 09, 2018 11:48 am
But the end result is the same. As you said in a subsequent comment, just because you don't make a claim doesn't mean that you aren't using the "service." In my case, I was effectively using the service during that month gap in the same way that OP would be using the service in the final month of his/her coverage. And yet the guidance that I received from both HR and the CSR at the insurance company was to essentially string the insurance company along and only pay if I ended up needing to file claims.
You were not using the service. It is built into COBRA that you can get retroactive coverage for very good reasons having to do with the time it takes to make an election. It is NOT built in to COBRA to skip a monthly payment because you didn't use it and want to quit.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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BoglePaul
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Re: Skipping last cobra payment

Post by BoglePaul » Sun Dec 09, 2018 1:39 pm

Any thoughts with respect to how this will impact your previous employer? What if your employer pays your final payment and then is not reimbursed by the insurance company. If your previous employers is reimbursed, any concern to the additional administrative overhead you are causing your previous employer? Is the hour of labor they will spend contacting you and dealing with the insurance company any concern to you? As long as you get yours, eh?

Employers should not have to handle COBRA due to this exact type of BS. Ex-employees should have to work with the insurance company directly. [OT comment removed by admin LadyGeek]

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Re: Skipping last cobra payment

Post by LadyGeek » Sun Dec 09, 2018 1:54 pm

I removed an off-topic comment. This thread has run its course and is locked (topic exhausted). See: Locked Topics
Moderators or site admins may lock a topic (set it so no more replies may be added) when a violation of posting policy has occurred. Occasionally, even if there are no overt violations of posting policy, a topic (or thread) will reach a point where the information content of the discussion has been essentially exhausted and further replies are much more likely to cause distress to the community than add anything of value.
I also fixed the thread title "cobra" to "COBRA".
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