Change of employer, 1 month Health Insurance gap, use COBRA or not

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flyingcows
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Joined: Sat Apr 20, 2019 8:13 am

Change of employer, 1 month Health Insurance gap, use COBRA or not

Post by flyingcows » Thu Nov 14, 2019 2:28 pm

I switched to a new employer and will have a 1 month gap between my old employer plan and the new employer plan. I received the COBRA forms, cost per month is $1,600 for our family of 4.

Estimated total income for 2019 will be $225,000 so my penalty for not being insured is $5,625 (2.5%) per year or $468 per month. So from what I understand here, by not opting for COBRA we pay $468 to IRS vs the $1,600 to continue coverage. With COBRA coverage being retroactive, not activating until there is a need seems to be the sensible approach, unless we have some unexpected healthcare expenses during the gap month in which case we can active after the fact.

Is there anything else I am missing here that would make it compelling to proactively activate COBRA?

Thank you!

bloom2708
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Re: Change of employer, 1 month Health Insurance gap, use COBRA or not

Post by bloom2708 » Thu Nov 14, 2019 2:48 pm

You can sign up for COBRA retroactively for a period of time.

For 30 days, I would just take it day by day. If something happened, sign up for COBRA. Chances are slim. Knock on wood.

Get the details from your employer. Also, if you work on day 1 of a month, you are likely covered for that month from your employer coverage. That is something else to check on depending on the 30 day window start/end days.
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gac1979
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Re: Change of employer, 1 month Health Insurance gap, use COBRA or not

Post by gac1979 » Thu Nov 14, 2019 3:12 pm

There is no longer a penalty for being uninsured.

BuddyJet
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Joined: Mon Jun 24, 2019 8:56 pm

Re: Change of employer, 1 month Health Insurance gap, use COBRA or not

Post by BuddyJet » Thu Nov 14, 2019 3:14 pm

Your plan sounds good. Just be sure you don't decline COBRA in exit paperwork.
People say nothing is impossible. I do nothing all day.

Trader Joe
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Re: Change of employer, 1 month Health Insurance gap, use COBRA or not

Post by Trader Joe » Thu Nov 14, 2019 6:04 pm

flyingcows wrote:
Thu Nov 14, 2019 2:28 pm
I switched to a new employer and will have a 1 month gap between my old employer plan and the new employer plan. I received the COBRA forms, cost per month is $1,600 for our family of 4.

Estimated total income for 2019 will be $225,000 so my penalty for not being insured is $5,625 (2.5%) per year or $468 per month. So from what I understand here, by not opting for COBRA we pay $468 to IRS vs the $1,600 to continue coverage. With COBRA coverage being retroactive, not activating until there is a need seems to be the sensible approach, unless we have some unexpected healthcare expenses during the gap month in which case we can active after the fact.

Is there anything else I am missing here that would make it compelling to proactively activate COBRA?

Thank you!
Do not decline the Cobra coverage, but do not accept it either during this one month period.

If there are issues during this one month period, then you should then accept Cobra coverage immediately.

BTW, there is no longer any monetary IRS penalty.

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RickBoglehead
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Re: Change of employer, 1 month Health Insurance gap, use COBRA or not

Post by RickBoglehead » Thu Nov 14, 2019 6:23 pm

COBRA paperwork should clearly show you your acceptance date deadline. As stated, you likely can wait for the new coverage.
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Finridge
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Joined: Mon May 16, 2011 7:27 pm

Re: Change of employer, 1 month Health Insurance gap, use COBRA or not

Post by Finridge » Fri Nov 15, 2019 1:59 am

What I did in this situation: I completed and signed the paperwork and left together with a note where family would find it. Just in case I was in a car crash and ended in the hospital in a coma or something...

michaeljc70
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Re: Change of employer, 1 month Health Insurance gap, use COBRA or not

Post by michaeljc70 » Fri Nov 15, 2019 9:00 am

Finridge wrote:
Fri Nov 15, 2019 1:59 am
What I did in this situation: I completed and signed the paperwork and left together with a note where family would find it. Just in case I was in a car crash and ended in the hospital in a coma or something...
+1. That's what we did.

There is no ACA penalty starting in 2019.

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