Riddle me this...an insurace/COBRA question
 

My last day with my present employer is tomorrow. My insurance will be good through the end of November.

My employment begins with my new employer on the 18th and the coverage there starts after 30 days.

This obviously leaves a ~20 day gap so I inquired about COBRA. My current employer says it's $1,450 a month for COBRA but that I have 60 days to decide if I want it AND...it is retroactive in the event that I do want it!

I asked if that meant I could wait to see if I have any issues during the gap then decide if coverage would have been a good idea? They say yes, no problem.

WTF? Is this legit? I mean it's a good deal for me, but that's not insurance....

Send an email and ask Obama! He knows all the answers!

That is absolutely correct and the right thing for you to do in your situation. Good luck in the new job!

Thanks, that still seems crazy to me though... Such is life.

yep, you're fine...a nice bonus if you have another job lined up and maybe want to take some time for yourself before starting the new one.

It's only "retroactive" to day you decided to opt in not to the 1st day of eligibility. (Your last day of employment)

Meaning if you have a medical expense before you opt in it's not retroactively covered.

Hmm, that's not the way it was explained and really wouldn't fall under the definition of retroactive.

I specifically asked "If I have a medical need in between my last day and when I opt in it would be covered?"


Not saying you're wrong, in fact the way you describe it is what I would define as proper.

Ok,at least it prompted me to look it up n the .gov site :)

Changing your mind

Your COBRA coverage will be retroactive to the date that you lost your benefits (as long as you pay the premium). During the election period, you might initially decide not to take COBRA, which means you waive your right to coverage. However, as long as the election period hasn't expired, you can change your mind and revoke your waiver.

Even if you enroll in COBRA on the last day you are eligible, your coverage is retroactive to the date you lost your job, provided you pay all the retroactive premiums.

If you waive your right to COBRA but then incur medical bills during the election period, you can change your mind and elect COBRA, and your plan will cover those bills.

Conversely, if you elect COBRA, you can cancel it at any time. You don't have to use it for your full eligibility period.

I had a six week gap in coverage between jobs. I filled out the paperwork, wrote out the check, sealed the envelope and told my wife, if anything happens to me, put that envelope into the mailbox before coming to help me.

According to Dept of Labor it sounds like retroactivity is plan dependent, as in it ain't guaranteed.

Which seems reasonable because otherwise why would anyone ever opt in day one unless they had a pre existing condition.

You will get paperwork within 2 weeks so you may want to call the plan administrator and get that cleared up.

http://www.dol.gov/ebsa/faqs/faq-consumer-cobra.html

Q11: If I waive COBRA coverage during the election period, can I still get coverage at a later date?

If a qualified beneficiary waives COBRA coverage during the election period, he or she may revoke the waiver of coverage before the end of the election period. A beneficiary may then elect COBRA coverage. Then, the plan need only provide continuation coverage beginning on the date the waiver is revoked.

Q11, quoted above, applies if you actually invoke a written waiver for COBRA coverage during the election period. That waiver is among the papers received during the election period.

COBRA was conceived as a temporary continuation of benefits that you either opted out of (the waiver), or paid for (the election.) It is not free as once you elect to use (file a claim) or continue COBRA, you must pay a premium amount, retroactive to the termination date of you original benefits. Additionally, once you opt into COBRA during the election period, you have 45 additional days to pay your retroactive premium amount.

Man, you guys like to make things complicated. You can pay up to 60 days and it is retroactive. You will receive a letter and a bill. Don't pay it unless you have a medical charge that exceeds the premium prior to your new insurance becoming effective. Simple.

That is not what was in question.

I've done Cobra twice.

The opting in later option has been explained to me by the plan administrators as I posted.

DOL site seems to support that.

So I suggest Lendaddy stop listening to us and verify it directly because there may just be a variable.

And FWIW I like Len so for him I'd be happy to be wrong.

Thanks, you have definitely piqued my curiosity. I spoke with my HR benefits manager today but I'm going to follow up tomorrow. As I mentioned above I find the whole thing too good to be true. Why would anyone pay for it until they had an event if so? Now I've been around long enough to know that the government does wildly asinine things on a regular basis so I wouldn't be shocked either way. So I do sincerely thank you.

In situations where I have had a gap in coverage for myself and family I called my insurance guy and bought a short term policy. It was short term so it covered pretty much everything with a reasonable deductible. It was CHEAP - way better deal than COBRA. The last one I did was 90 days and you're talking 30. I imagine you could get whatever you want for that amount of time for very little compared to the COBRA policy cost.

Take the COBRA, you don't pay til later, cancel if you dont need it, no charge. If you need it, you'll just pay...and probably be glad you have it..

One common mis-conception is that COBRA is some sort of government or independent health insurance plan. It is not. It is simply a government requirement on your company to allow you to continue coverage under your existing company medical insurance plan for a defined period of time after your termination date. It is expensive as it represents the full cost of medical coverage under your company plan (without any company subsidy). I agree that you should not sign up unless you need to claim.

I've run HR for several companies and administered COBRA for 30 years. You will be fine not paying unless you need it.

This is correct. I just did the exact same thing a few months ago.