COBRA and medical insurance

[fac]

Hi

A friend got laid off, and was told by the company that she should would receive the COBRA package **after** the medical insurance ends? it is true? It does not sound right, what will happen to the period before she receives the package and after the medical insurance ends? What will happen if she decides not to pay for the COBRA package, does it mean that she won't have coverage for the few weeks? How can she make decision before she receives the package?

What other paid option does she have beside COBRA? I have heard that ACA wasn't good with high decductible.....Many years ago, when I was an independent contractor, I purchased some type of group insurance, are those insurances still available? What about AARP etc...? Does anyone know?

Also, can there be any gap for COBRA? Say if she were eligible for COBRA in May, but she decides to use COBRA in June, can she begin paying in June, hence skip May?

 

[supersnoop]

She can't skip a month; coverage does have to be continuous. However, she should have 30 days to sign up for COBRA and coverage is retroactive to her eligibility date. So she can wait until the last day to see if she actually needs it before she signs up

 

[crisi]

She should look at the ACA and see what it offers. WITHOUT a subsidy, our insurance was cheaper with the same deductible than through Cobra. We stayed on Cobra so that the deductible carried because it was the last three months of the year and we'd spent the deductible. In the end, it wasn't the best decision as we didn't spend as much as we would have saved. Its possible that even with a high deductible, she will have such a smaller cost that she can pay the full deductible and still save money

 

[Dawnlight]

COBRA is very expensive. We've went through 4 layoffs in a period of 6 years and never once could we afford it. Is her employer contributing to the COBRA costs or is it all on your friend? I'd have your friend check into state medical insurance first.

 

[leebee]

We had the same experience as Dawnlight; the COBRA coverage was prohibitively expensive. The ACA didn't exist when we needed the medical coverage, so we were stuck between a rock and a hard place. With DH unemployed, there was no way we could pay for COBRA, so we rolled the dice and went without medical coverage for a few months. We knew it'd only be for a few months as DH had a contracted job offer in hand, but it was a little scary, knowing we had no medical coverage that summer.

If I were your friend, I'd look into ACA coverage before COBRA. I bet ACA is considerably more affordable.

 

[AlohaNow]

As someone else mentioned, COBRA can be retroactive, I believe it is still to 30 days out. If your friend has not yet signed the final paperwork, have them try to negotiate for the company to pay for COBRA for a few months beyond the package being offered. Everything in an exit offer is negotiable. Either way, have them get everything in writing!

 

[SMD]

A company I was laid off from submitted my COBRA payment late every single month. There was always a lapse in my coverage, and once I filled some prescriptions which I had to pay out of pocket for. I then had to submit to insurance for reimbursement. It was a big pain, but fortunately I didn't have an expensive emergency where I needed it.

 

[bearzabout]

In our state, Blue Cross offers some policies that are not part of the ACA. Some have very high deductibles and stop losses, but at least they are available.

Coverage through the marketplace is also an option during the "special enrollment period" due to the job loss, but calculating any subsidy will be very difficult since they won't know their annual income for the year since they could get another job.

The current company they have insurance through may have options for new policies that are cheaper than continuing on COBRA. it is worth a call to them. I'm sure they do not want to loose a customer.

It is also worth calling an insurance agent. They would be the most knowledgeable about health insurance options.

 

[staceyeileen]

Like others have said, COBRA is retroactive to the date of her eligibility for it with no gap in coverage. When she receives the COBRA package, it will state the date that she must return the paperwork by if she wants to elect to take the COBRA coverage. This is usually 30 days AFTER she receives the package. So, she should wait until that period is about to run out to elect coverage and fill out the paperwork. Most people's first instinct is to elect COBRA ASAP because they assume they're uninsured during that period, but they won't be since it's retroactive. You don't want to elect COBRA unless you absolutely have to.

 

[fac]

thanks. I told my friend, she ran some numbers on ACA and told me ACA would be higher...Is it possible? she mentioned something she would have to pay full price..not sure why...
bearzabout, do you know where to find insurance agent? I think I used them many years ago...

 

[NewRVLady]

I am on COBRA now-until I hit retirement age this summer
I also though CObra was VERY expensive....it all depends on the Company !
Mine is only $350 a month!

Also my friend with cancer 'had" to retire (missing too much work and its a matter of months for her to live, sadly)-HER company is PAYING her Cobra!

 

[msmama]

Like others have said, COBRA is retroactive to the date of her eligibility for it with no gap in coverage. When she receives the COBRA package, it will state the date that she must return the paperwork by if she wants to elect to take the COBRA coverage. This is usually 30 days AFTER she receives the package. So, she should wait until that period is about to run out to elect coverage and fill out the paperwork. Most people's first instinct is to elect COBRA ASAP because they assume they're uninsured during that period, but they won't be since it's retroactive. You don't want to elect COBRA unless you absolutely have to.

Exactly what she said, BUT you have to PAY retroactively too. So, for instance, if the company takes 30 days to get her the paperwork, she takes 30 days to sign said paperwork she has to pay for those 60 days before the insurance will start back up. (So that first payment could be as much as 3 times the monthly payment).

Also, if she had really good insurance then yes, ACA insurance could be more. I COBRA'd my ex's insurance for awhile after our divorce because equivalent coverage was WAAAAY more $$.

 

[staceyeileen]

thanks. I told my friend, she ran some numbers on ACA and told me ACA would be higher...Is it possible? she mentioned something she would have to pay full price..not sure why...
bearzabout, do you know where to find insurance agent? I think I used them many years ago...

First of all, ACA/Obamacare is a law not an insurance plan. Sorry, pet peeve

Second, yes there's a good chance she would have to pay full price, depends on her income. We've paid full price for an exchange plan before and it was still WAY less than what our COBRA premium was going to be. If you review the plans available on the exchange for people in your state, you'll find tons of different plans all with varying benefit levels and premiums. It really is no different than shopping for a private plans (because, well... they ARE private plans offered by the same old insurance companies). Only difference is that some people may get a tax subsidy based on their income level.

 

[PlutoPony]

One thing to consider - if you do not go the Cobra route, you will essentially be starting anew with a new insurance plan. That means starting at $0 again for deductibles for the year as well as starting at $0 for what counts towards max out of pocket for 2015. Being that this is so early in the calendar year, that may not mean much if you're a healthy person. But if it was later in the year OR if you had a lot of doc bills early this year, it could be a different story and Cobra might make more sense financially. You just have to run the numbers...

 

[WDWorBUST]

So....COBRA is not a plan itself....COBRA is the opportunity to temporarily extend the coverage you already had with your prior employer, however you are now paying 100% of the cost of that coverage along with up to a 2% administrative charge. It usually enlightens people to just how much their employer was paying on their behalf. You have up to 60 days from the time the information is provided to you to elect it and then an additional 45 days from that point to actually pay. So....say loss of coverage is 4/1 - paperwork is mailed 4/6 - you'd have 60 days from then. Then let's say you mail back your election form on 6/1 - you then have 45 days to actually make a payment. Now mind you, your coverage is not reinstated until that payment is received bringing you current....and it is retroactive to April 1st so you have to pay for the coverage during all this waiting around....but if you KNOW you have other coverage you can make it work where should you have an emergency you have a fallback plan.

 

[SMD]

You can also switch to a lower plan if one is offered if you decide to go with COBRA. I used me annual vision and dental benefit and then dropped those to save a little.

 

[DebbieB]

A friend of mine retired from my company. As a single person, we pay $130 a month. Cobra was over $800. She found a local policy for around $500.

 

[fac]

A friend of mine retired from my company. As a single person, we pay $130 a month. Cobra was over $800. She found a local policy for around $500.

DebbieB, how did your friend find the local policy.... It was what I did when I went to consulting a few years ago... I joined some local groups...but I don't seem to be able to find them any more.