How does COBRA work?

[Momto6inIN]

I tried starting this thread before but deleted it because it had too many personal details. I'd like to try to keep this one general but still get good info.

Does a person have to sign up for it with the HR dept before they leave their job? Sometimes even if an employee gives 2 weeks notice they are still escorted off the premises as soon as management finds out they are leaving ... how would they apply for COBRA in that circumstance? Is the HR dept required to offer it or do they need to ask for it? Is there a grace period or something similar where they are still covered by insurance between when they leave the job and when they ask for COBRA benefits? Or are they just uninsured for a brief period of time until they sign up? And just how expensive is COBRA any way?

Thanks!

[Hyacinth]

You don’t sign up before you leave. You’ll get a letter in the mail.

i don’t know how universal our experience was, but we were covered under my husband’s employer’s plan for something like thirty days after his last day (or until the end of the month...something like that). 

Cobra is ridiculously expensive. Ridiculously. It’s basically the same insurance, but instead of the employer paying 50% or 80% or whatever of the premium, you pay it all. If you know what percentage you pay as an employee, you can figure out what the monthly premium will be under Cobra  

It’s stressful. I don’t know what’s prompting your questions but I’m sorry you have to be thinking about these things. 

Edited November 12, 2018 by Hyacinth

[Pawz4me]

You'll get a letter in the mail. IIRC you have thirty days to decide. During that thirty days you're in kind of a gray period. Claims won't go through, but then if you decide to go with COBRA coverage those claims can be resubmitted and they will be covered as usual. For us COBRA isn't more expensive than a comparable plan purchased on our own would be. Whether it is or not will probably depend on your age(s), where you live and maybe other things.

[mom2scouts]

6 minutes ago, Pawz4me said:

You'll get a letter in the mail. IIRC you have thirty days to decide. During that thirty days you're in kind of a gray period. Claims won't go through, but then if you decide to go with COBRA coverage those claims can be resubmitted and they will be covered as usual. For us COBRA isn't more expensive than a comparable plan purchased on our own would be. Whether it is or not will probably depend on your age(s), where you live and maybe other things.

For people who've had their health insurance subsidized by their employers, it's often quite a shock when they find out how much they have to pay for that plan on their own.

[2ndGenHomeschooler]

My DH switched jobs in 2009. We were covered by his insurance until the end of the month he left - October 31st - and insurance at the new job kicked in on January 1st. DS decided to make his arrival on November 5. I applied for COBRA a couple weeks after DS was born but it was retroactive to November 1st so it covered all the birth expenses. It was surprising how expensive is was ($600-800 a month I think) but definitely cheaper than paying out of pocket for childbirth. We only kept it the month of November and went without insurance that December because it was cheaper to pay the one or two Doctor visits out of pocket than pay the insurance. 

[Ottakee]

Yes, you get a letter in the mail and that will give you the date you must decide by.  Depending in financial situation you can also look into. State insurance

[marbel]

We recently went on COBRA.  We thought we had 30 days to apply after he was laid off, but when I tried to make a medical appointment I found out we did not - we had no coverage as of his first day being unemployed.  The employer should have either given him the documents to sign up 30 days before his end date at work (his layoff was not a sudden surprise) or should have kept coverage going for 30 days after his layoff so we had time to sign up and pay. We did get signed up and coverage reinstated quickly. 

In any case, for us it is no more expensive because his employer did not contribute to the premiums.  My main annoyance is that I can't do online or automatic payments; have to send a check every month.  

[RootAnn]

My experience is 15+ years ago, but I'll echo that I got a letter in the mail and had 30 days (retroactive to my last day) to decide. It was hideously expensive and DH's new insurance kicked in 20 days after my last day. If dd#2 would have shown up early (between my last day and his first day of work), I would have signed up for COBRA. As it was, she was early, but not that early and his insurance was in force. (Still ended up paying three deductibles for that pregnancy and going through endless headaches with my old employer's insurance because old employer insisted I didn't work on my last day and that was the day the one's office billed all my pg care to.)

So, we didn't end up signing up for it. Best to try to get the new insurance (assuming there is another job offer in the wings) going as soon as possible.

[Momto6inIN]

2 hours ago, Hyacinth said:

It’s stressful. I don’t know what’s prompting your questions but I’m sorry you have to be thinking about these things. 

It is stressful. Thankfully it's a good situation that is prompting the questions ... or at least it will be after after the stressful transition period is over!

Thanks to all who answered, I feel like I have a better handle on how this is all going to go now! ?

[RootAnn]

Here are some timeframes for you. (Different than what I remember.) These are questions geared to employers.

From https://www.cms.gov/CCIIO/Programs-and-Initiatives/Other-Insurance-Protections/cobra_qna.html

Q10: What notification requirements apply when there is  a qualifying event?

Separate requirements apply to the employer and the group health plan administrator.  An employer that is subject to COBRA requirements is required to notify its group health plan administrator within 30 days after an employee’s employment is terminated, or  employment hours are reduced.  Within 14 days of that notification, the plan administrator is required to notify the individual of his or her COBRA rights.  If the employer also is the plan administrator and issues COBRA notices directly, the employer has the entire 44-day period in which to issue a COBRA election notice.

Q12: What is the next step in the process once appropriate notice of a qualifying event is given to the health plan administrator?

Plan administrators that receive notice of a qualifying event must notify qualified beneficiaries of their right to elect COBRA coverage.  Qualified beneficiaries have independent election rights, and therefore they must each be notified.  If all the qualified beneficiaries reside at the same address, the plan administrators may either include separate election notices for each qualified beneficiary in a single mailing that is addressed to both the employee and spouse, or send a single notice that  clearly identifies all qualified beneficiaries covered by the notice, and explains each person's separate and independent right to elect COBRA continuation coverage.  Each qualified beneficiary then has 60 days to decide whether to elect continuation coverage

Edited November 12, 2018 by RootAnn
Added website address

[footballmom]

If I were someone resigning from a job where I received health benefits, I would ask HR once I resigned when my current insurance would terminate.  Some employers pay for a month ahead, or a pay period ahead or real time.  So you could have up to the remainder of the month, two weeks, or nothing.  Once that insurance terminates is when the COBRA coverage would begin.  You will get a letter in the mail but that can take several days to arrive.  You have up to 60 days to enroll and it goes retroactively back to the day you didn't have the employer plan.  As PPs mentioned, it is expensive.  However, given the timing of the year, if you've met deductibles, etc it may be less expensive than signing up for a new marketplace plan and starting deductibles all over.  COBRA is the same plan you had through the employer, but now you are paying the full premium.  We've had one instance where paying for COBRA made the most sense and another when the marketplace made more sense.  Good luck!

[TechWife]

You might want to look into whether or not an ACA Marketplace plan is an option for the intermediate time.

[Selkie]

Not sure if this has been mentioned yet, but the (former) employer can also add an administrative fee of up to 2%. 

[Momto6inIN]

1 hour ago, TechWife said:

You might want to look into whether or not an ACA Marketplace plan is an option for the intermediate time.

I thought I read somewhere that ACA plans were not usually short term? If we do end up needing something in the interim it would only be for 90 days.

[TechWife]

1 hour ago, Momto5inIN said:

I thought I read somewhere that ACA plans were not usually short term? If we do end up needing something in the interim it would only be for 90 days.

Losing employer based insurance is a qualifying life event for getting an ACA plan. Getting employer based insurance is a reason to cancel your ACA plan. Some links:

Options when you lose employer based coverage:

https://www.healthcare.gov/have-job-based-coverage/if-you-lose-job-based-coverage/

Canceling your marketplace plan when you get a job based insurance offer:

https://www.healthcare.gov/have-job-based-coverage/