Health Insurance Gap Question: California, COBRA, Changing Jobs - Need Insight

[curiousinvestor]

Hi Bogleheads,

There's a high chance I'm changing jobs. If so, my health insurance will end 11/30/2023. I won't start new job until early Jan 2023, so new health insurance begins 02/01/2024. That's about a 62 day gap with no insurance.

For COBRA, I understand I have up to 60 days to elect to continue health insurance (I just have to pay the entire premium from 1st day 12/01/2023 on).

In an ideal world, I wouldn't do COBRA unless something drastic happened in the 60 day window and I would delay regular checkups, if any, to Feb 2024.

But this only brings me through 01/28/2024 or so to elect COBRA with the 60 day COBRA election period. Leaves a gap 01/29 and 01/30 and 01/31.

Let me explain in chart form:
11/30/2023 health insurance expected to end
Jan 2024 new employer
02/01/2024 new employer health insurance starts
COBRA is a 60 day election period, from 12/01/2023 through around 01/29/2024, which leaves me 01/30 and 01/31/2024 possible insurance gap.

I see 3 options:
Option 1 (Most expensive)
Just pay COBRA premiums and get fully covered Dec 2023, Jan 2024, so two months, and it'll cover 01/30 and 01/31/2024 gap.

Option 2 (Save 1 month premium cost, but more complicated)
Don't pay COBRA unless I need healthcare Dec 2023, but do 1 month of Covered California coverage for Jan 2024 so that the 01/30 and 01/31/2024 days are covered

Option 3 (I don't want this, it's too risky)
Gamble. Don't pay COBRA. Have a 01/30 and 01/31/2024 insurance gap and hope nothing happens. New employer insurance starts 02/01/2024.

Questions:
1) Does the above sound right? I'm no insurance expert and haven't switched jobs much in my career. I never paid attention to the affordable care act much so not sure I have this all correct.

2) What would you do? I have a family and dependents including spouse and children, and I am the one with income which comes with insurance person. Spouse only part time works, not enough for insurance.

Thanks all!

[sailaway]

You actually have 60 days to elect coverage and an additional 45 days to make your first payment. If you are the gambling type, you could elect some time in January and only make a payment if needed.

I say gambling because our experience with COBRA was not at all straight forward. HR and the administrator played the blame game long enough that we actually got three months free, but still barely had it sorted by the end of the next three months, by when we had employer coverage again. We still had to spend another six weeks getting a payment processed because the administrator didn't inform the insurance company themselves (well, seems the insurance company has their own issues, as their records showed that coverage ended several years ago, even though they could see payments made earlier in the year) that we had elected and paid for coverage in a timely manner.

[curiousinvestor]

You actually have 60 days to elect coverage and an additional 45 days to make your first payment. If you are the gambling type, you could elect some time in January and only make a payment if needed.

I say gambling because our experience with COBRA was not at all straight forward. HR and the administrator played the blame game long enough that we actually got three months free, but still barely had it sorted by the end of the next three months, by when we had employer coverage again. We still had to spend another six weeks getting a payment processed because the administrator didn't inform the insurance company themselves (well, seems the insurance company has their own issues, as their records showed that coverage ended several years ago, even though they could see payments made earlier in the year) that we had elected and paid for coverage in a timely manner.

Oh? But let’s say I elect then don’t pay. Will they come after me for non payment and send to bill collector, do you know? Thanks!

[sailaway]

You actually have 60 days to elect coverage and an additional 45 days to make your first payment. If you are the gambling type, you could elect some time in January and only make a payment if needed.

I say gambling because our experience with COBRA was not at all straight forward. HR and the administrator played the blame game long enough that we actually got three months free, but still barely had it sorted by the end of the next three months, by when we had employer coverage again. We still had to spend another six weeks getting a payment processed because the administrator didn't inform the insurance company themselves (well, seems the insurance company has their own issues, as their records showed that coverage ended several years ago, even though they could see payments made earlier in the year) that we had elected and paid for coverage in a timely manner.

Oh? But let’s say I elect then don’t pay. Will they come after me for non payment and send to bill collector, do you know? Thanks!

No, they are quite happy to not cover you and leave it at that.

[LotsaGray]

You actually have 60 days to elect coverage and an additional 45 days to make your first payment. If you are the gambling type, you could elect some time in January and only make a payment if needed.

I say gambling because our experience with COBRA was not at all straight forward. HR and the administrator played the blame game long enough that we actually got three months free, but still barely had it sorted by the end of the next three months, by when we had employer coverage again. We still had to spend another six weeks getting a payment processed because the administrator didn't inform the insurance company themselves (well, seems the insurance company has their own issues, as their records showed that coverage ended several years ago, even though they could see payments made earlier in the year) that we had elected and paid for coverage in a timely manner.

We did the gamble when DD was turning 26. She had started some major procedures which we thought were done but would not know for sure. These were started and likely complete under my employer and she was going on Medicaid. We did not know how good the Medicaid cover would be so around day 55 we elected COBRA but did not pay. At her final check up 3weeks later all was fine so we chose not to pay the COBRA bill. I cannot recall if we actually cancelled or just did not pay. But all worked fine.

I will add that unlike others here, while my company followed the COBRA timel8ne to the tee, they did not make things difficult. Was a fortune 50 company who self insured but had a couple of companies who managed different option. My chosen plan was managed by BCBS. It is possible some of the other plans made it harder but I really doubt it. The megacorp was serious about employee satisfaction and le@Bing and coming b@ck was far from rare so a pita plan would get fixed or dropped.

[LotsaGray]

You actually have 60 days to elect coverage and an additional 45 days to make your first payment. If you are the gambling type, you could elect some time in January and only make a payment if needed.

I say gambling because our experience with COBRA was not at all straight forward. HR and the administrator played the blame game long enough that we actually got three months free, but still barely had it sorted by the end of the next three months, by when we had employer coverage again. We still had to spend another six weeks getting a payment processed because the administrator didn't inform the insurance company themselves (well, seems the insurance company has their own issues, as their records showed that coverage ended several years ago, even though they could see payments made earlier in the year) that we had elected and paid for coverage in a timely manner.

Oh? But let’s say I elect then don’t pay. Will they come after me for non payment and send to bill collector, do you know? Thanks!

No you will be fine. If they don’t pay they don’t mind dropping you. I have seen this very process discussed on some serious web sites. Might even be govt ones.

But if you do submit even a $1 bill, even if not covered as long as you authorized the submit ion, they expect all three months of premiums.

[OnTrack2020]

You actually have 60 days to elect coverage and an additional 45 days to make your first payment. If you are the gambling type, you could elect some time in January and only make a payment if needed.

I say gambling because our experience with COBRA was not at all straight forward. HR and the administrator played the blame game long enough that we actually got three months free, but still barely had it sorted by the end of the next three months, by when we had employer coverage again. We still had to spend another six weeks getting a payment processed because the administrator didn't inform the insurance company themselves (well, seems the insurance company has their own issues, as their records showed that coverage ended several years ago, even though they could see payments made earlier in the year) that we had elected and paid for coverage in a timely manner.

Oh? But let’s say I elect then don’t pay. Will they come after me for non payment and send to bill collector, do you know? Thanks!

Nope, but you will forfeit all your rights to COBRA.

[OnTrack2020]

You probably want to keep and pay for COBRA because COBRA is an extension of your current health insurance, so your deductible and out-of-pocket maximum continue forward (and, of course, will reset in January if you are on a calendar year plan. If you are on a plan year, say your plan goes from July to June, then your deductible and OOP max won't reset until then.) I always recommend, if you can afford it, to stay on COBRA as the group health insurance plans just tend to be better than healthcare.gov/ACA/marketplace plans. Yes, it's expensive. You could look at your OOP maximum between your current health insurance plan and a Covered California plan to see if there is a large difference. Also, if you have doctors that you see that are in your current plan, they may not be on the Covered California plan, that may make a difference as well. Most plans on the ACA do not cover outside of the state you live in as they are EPO/HMO plans, and only offer coverage outside of the coverage area in the event of emergency.

Note, I had two unplanned surgeries while on COBRA; 2-1/2 months apart, totally different issues, totally unexpected. Stuff happens, and unfortunately it happened to me. We were fortunate in that my husband's insurance plan through his former employer was very good and our out-of-pocket max wasn't terribly high. With our current ACA plan, the OOP max is $17k, and our deductible is over $14k.

[LotsaGray]

You probably want to keep and pay for COBRA because COBRA is an extension of your current health insurance, so your deductible and out-of-pocket maximum continue forward (and, of course, will reset in January if you are on a calendar year plan. If you are on a plan year, say your plan goes from July to June, then your deductible and OOP max won't reset until then.) I always recommend, if you can afford it, to stay on COBRA as the group health insurance plans just tend to be better than healthcare.gov/ACA/marketplace plans. Yes, it's expensive. You could look at your OOP maximum between your current health insurance plan and a Covered California plan to see if there is a large difference. Also, if you have doctors that you see that are in your current plan, they may not be on the Covered California plan, that may make a difference as well. Most plans on the ACA do not cover outside of the state you live in as they are EPO/HMO plans, and only offer coverage outside of the coverage area in the event of emergency.

Note, I had two unplanned surgeries while on COBRA; 2-1/2 months apart, totally different issues, totally unexpected. Stuff happens, and unfortunately it happened to me. We were fortunate in that my husband's insurance plan through his former employer was very good and our out-of-pocket max wasn't terribly high. With our current ACA plan, the OOP max is $17k, and our deductible is over $14k.

Op says/implies his new job has coverage and will start on Feb 1. He doesn’t expect any medical costs Dec 1 to Feb 1. Why would he pay when he can have continuous employer coverage this entire period?

If something emergent comes up just pay @nd use COBRA but don’t pay for what you can get for free until you use it.

I also believe June to June plans are pretty uncommon the normal Nov elect coverage initiates in Jan aligns with open enrollment of ACA @nd Medicare.

[OnTrack2020]

You probably want to keep and pay for COBRA because COBRA is an extension of your current health insurance, so your deductible and out-of-pocket maximum continue forward (and, of course, will reset in January if you are on a calendar year plan. If you are on a plan year, say your plan goes from July to June, then your deductible and OOP max won't reset until then.) I always recommend, if you can afford it, to stay on COBRA as the group health insurance plans just tend to be better than healthcare.gov/ACA/marketplace plans. Yes, it's expensive. You could look at your OOP maximum between your current health insurance plan and a Covered California plan to see if there is a large difference. Also, if you have doctors that you see that are in your current plan, they may not be on the Covered California plan, that may make a difference as well. Most plans on the ACA do not cover outside of the state you live in as they are EPO/HMO plans, and only offer coverage outside of the coverage area in the event of emergency.

Note, I had two unplanned surgeries while on COBRA; 2-1/2 months apart, totally different issues, totally unexpected. Stuff happens, and unfortunately it happened to me. We were fortunate in that my husband's insurance plan through his former employer was very good and our out-of-pocket max wasn't terribly high. With our current ACA plan, the OOP max is $17k, and our deductible is over $14k.

Op says/implies his new job has coverage and will start on Feb 1. He doesn’t expect any medical costs Dec 1 to Feb 1. Why would he pay when he can have continuous employer coverage this entire period?

If something emergent comes up just pay @nd use COBRA but don’t pay for what you can get for free until you use it.

I also believe June to June plans are pretty uncommon the normal Nov elect coverage initiates in Jan aligns with open enrollment of ACA @nd Medicare.

It's like people saying they are healthy---until they aren't. As long as the OP understands that he won't have any health insurance coverage until he actually elects COBRA and pays the premium. Only then will the insurance be made retroactive.

And, yes, I agree that the June to June plans are uncommon, but they do occur.

[LotsaGray]

You probably want to keep and pay for COBRA because COBRA is an extension of your current health insurance, so your deductible and out-of-pocket maximum continue forward (and, of course, will reset in January if you are on a calendar year plan. If you are on a plan year, say your plan goes from July to June, then your deductible and OOP max won't reset until then.) I always recommend, if you can afford it, to stay on COBRA as the group health insurance plans just tend to be better than healthcare.gov/ACA/marketplace plans. Yes, it's expensive. You could look at your OOP maximum between your current health insurance plan and a Covered California plan to see if there is a large difference. Also, if you have doctors that you see that are in your current plan, they may not be on the Covered California plan, that may make a difference as well. Most plans on the ACA do not cover outside of the state you live in as they are EPO/HMO plans, and only offer coverage outside of the coverage area in the event of emergency.

Note, I had two unplanned surgeries while on COBRA; 2-1/2 months apart, totally different issues, totally unexpected. Stuff happens, and unfortunately it happened to me. We were fortunate in that my husband's insurance plan through his former employer was very good and our out-of-pocket max wasn't terribly high. With our current ACA plan, the OOP max is $17k, and our deductible is over $14k.

Op says/implies his new job has coverage and will start on Feb 1. He doesn’t expect any medical costs Dec 1 to Feb 1. Why would he pay when he can have continuous employer coverage this entire period?

If something emergent comes up just pay @nd use COBRA but don’t pay for what you can get for free until you use it.

I also believe June to June plans are pretty uncommon the normal Nov elect coverage initiates in Jan aligns with open enrollment of ACA @nd Medicare.

It's like people saying they are healthy---until they aren't. As long as the OP understands that he won't have any health insurance coverage until he actually elects COBRA and pays the premium. Only then will the insurance be made retroactive.

And, yes, I agree that the June to June plans are uncommon, but they do occur.

Actually the minute he elects coverage he has it. No payment is necessary for 45 days. And the coverage is retroactive to the day work coverage ended. Heck you could go into hospital as a cash payment patient, have triple bypass surgery and a move after you were discharged, as long as under the 60 day limit, elect coverage and all those hospital costs get covered.

Getting routine care is tricky because they will want payment up front. But emergent or necessary care will still be performed and then covered.

Since our election had an online portal option to elect, I could do it from the hospital semi-conscious. Put the mouse in my hand and say click or DW could do it as my proxy. So no there is no gap in coverage and you always have 45 days to complete initial pay,ent.

[alexbogle]

With a family, I would take option 2 and be happy with the 1 month free.

[Dave5280]

Might ask the new employer if they would cover COBRA cost, splitting it, or put you on early waiving the waiting period. Or delay your termination into December if coverage goes to the end of the month after termination. On the routine stuff, call the claim payer and read coverage SPD to determine if you got it early if it would be covered. Also check to see if you have any unused flexible spending account balance to use up.

[Stebanoid]

I want to warn you that the option #2 is much more convoluted than that. You don't just buy a plan on CoveredCA.

I chose to go with coveredca instead of COBRA when I lost my job because my employer's plan was more expensive than plans on CoveredCA. CoveredCa didn't let me just buy a plan there. They asked me for my _current_ income (only my dividends, because I am out of job) then they said that I am potentially eligible for medi-cal (they don't care about already earned income - what is important is that I am out of job with a small current income). They didn't let me buy a plan because of this medi-cal and they sent my docs to my county for medi-cal. I eventually got my medi-cal coverage only 2 months after losing my job (was without insurance all this time). I moved to a different county by then and just started my new job that makes me ineligible for medi-cal. So, I am currently on hold for an hour already, trying to figure out how to cancel my medi-cal, and what county should handle it in my case.