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COBRA coverage. Please tell me what I need to know


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Our experience with COBRA was pretty straightforward. The cost was the same as we'd been paying, because my husband's employer did not pay anything toward insurance. So if you are used to the employer paying a big chunk of the premium, the cost will be higher.  (I had been terrified because I'd always heard "COBRA is so expensive!" Well, in our case, it wasn't any more expensive than what we'd been paying.)

I don't know  if different COBRA administrators do things differently in terms of payment. The one thing I hated about it was that we had to pay by check; electronic payments were not accepted. And, according to the documentation, one late payment would end coverage.  So that was stressful for me but I am easily stressed that way, and much prefer electronic payments to mailed paper checks.

I hope you are not on it long and that he has a new contract soon!

 

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It's been pretty straightforward for us, too. We're able to make electronic payments. Everything has been communicated well. Make sure you read everything you get thoroughly, make careful note of any deadlines and make sure you meet them. Call if you have any questions. Our insurance company has a department that deals with people on COBRA. For us it's very good coverage for significantly less than we could get anything remotely equivalent ourselves. But we don't qualify for any ACA subsidies, so of course YMMV on that.

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Cobra has a 60 day retroactive period to make the premium payment. I believe we had to elect to accept coverage, but we did not pay immediately. Instead, I put the payment in an envelope on the fridge. I instructed my mom to mail off the check should we end up in the hospital. We ended up not needing to use the insurance over that two month time period and were able to save thousands of dollars on premiums. This was incredibly helpful during a time when no income was coming in!

If it turns out your unemployment lasts longer than 60 days, you would have to make those back payments in order to continue coverage.

This was several years ago, so you may want to double check to be sure that this is still how it works. 

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I did it when I left the Federal government so maybe a little different.  But...I was on it for 18 months after having my twins (longest we could do it and I didn't go back to work).  I ended up applying with them for individual coverage, but had to do it before the COBRA was over.

It was very straightforward.  I wasn't one for automatic payments back then, but I did for this one as I didn't want to lose coverage because I forgot to pay or it was late.

Good luck :-).

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25 minutes ago, bibliophile said:

Cobra has a 60 day retroactive period to make the premium payment. I believe we had to elect to accept coverage, but we did not pay immediately. Instead, I put the payment in an envelope on the fridge. I instructed my mom to mail off the check should we end up in the hospital. We ended up not needing to use the insurance over that two month time period and were able to save thousands of dollars on premiums. This was incredibly helpful during a time when no income was coming in!

If it turns out your unemployment lasts longer than 60 days, you would have to make those back payments in order to continue coverage.

This was several years ago, so you may want to double check to be sure that this is still how it works. 

We've done this several times. (Ahh, the joys of multiple layoffs!) It gives us some breathing room while dh looks for a new job but leaves us with a fallback in case something catastrophic happens. Of course, if you're fairly certain you will be going for more than 60 days without new coverage, then it probably makes more sense to go ahead and pay when you elect coverage. 

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5 minutes ago, PeachyDoodle said:

We've done this several times. (Ahh, the joys of multiple layoffs!) It gives us some breathing room while dh looks for a new job but leaves us with a fallback in case something catastrophic happens. Of course, if you're fairly certain you will be going for more than 60 days without new coverage, then it probably makes more sense to go ahead and pay when you elect coverage. 

I have done that too.

 

Also, you might want to check out healthcare.gov and see what the rates would be for you.  You can apply ANY time there is a life change...and losing employment counts.  You might qualify as you income is likely to be much lower during layoff/unemployment.

Also, depending on your state, the kids might be covered by a state health plan for kids.  In Michigan it is Healthy Kids.  Similar to Medicaid, very small premium payment and covers almost everything.  Income limits are pretty generous.

Then when your dh is employed again you can drop these when your new insurance starts...and your income increases 

 

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39 minutes ago, Ottakee said:

I have done that too.

 

Also, you might want to check out healthcare.gov and see what the rates would be for you.  You can apply ANY time there is a life change...and losing employment counts.  You might qualify as you income is likely to be much lower during layoff/unemployment.

Also, depending on your state, the kids might be covered by a state health plan for kids.  In Michigan it is Healthy Kids.  Similar to Medicaid, very small premium payment and covers almost everything.  Income limits are pretty generous.

Then when your dh is employed again you can drop these when your new insurance starts...and your income increases 

 

Yes, this is what I was going to suggest.  Don't just assume you have to pay COBRA with no other options.

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2 hours ago, bibliophile said:

Cobra has a 60 day retroactive period to make the premium payment. I believe we had to elect to accept coverage, but we did not pay immediately. Instead, I put the payment in an envelope on the fridge. I instructed my mom to mail off the check should we end up in the hospital. We ended up not needing to use the insurance over that two month time period and were able to save thousands of dollars on premiums. This was incredibly helpful during a time when no income was coming in!

If it turns out your unemployment lasts longer than 60 days, you would have to make those back payments in order to continue coverage.

This was several years ago, so you may want to double check to be sure that this is still how it works. 

We have been discussing retirement, possible different employment later vs full on SS..and this come up as advice my friend who is an insurance broker but specializes in Medicare. I was surprised it’s an option,   but it is  one they counsel people on all the time.

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It lasts for 18 months normally.  36 if you have a certain kind of disability--not sure of the details around that, but I know that it's possible.

You pay what the company price would have been and they can charge you a small service fee as well.  I THINK that if the company drops the plan for their employees you are SOL as well, but am not sure of this--it's worth checking on if you are depending on this.  We have used it twice--it was easier than dealing with finding new medical insurance on top of everything else.  Once we took the whole thing, and the other time we just took dental and vision because we had major medical elsewhere but the better dental and vision coverage were very helpful at that point in our lives.  (You can piecemeal it like that if the former employer did.)

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6 hours ago, bibliophile said:

Cobra has a 60 day retroactive period to make the premium payment. I believe we had to elect to accept coverage, but we did not pay immediately. Instead, I put the payment in an envelope on the fridge. I instructed my mom to mail off the check should we end up in the hospital. We ended up not needing to use the insurance over that two month time period and were able to save thousands of dollars on premiums. This was incredibly helpful during a time when no income was coming in!

If it turns out your unemployment lasts longer than 60 days, you would have to make those back payments in order to continue coverage.

This was several years ago, so you may want to double check to be sure that this is still how it works. 

We did the same. 

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6 hours ago, Ottakee said:

I have done that too.

Also, you might want to check out healthcare.gov and see what the rates would be for you.  You can apply ANY time there is a life change...and losing employment counts.  You might qualify as you income is likely to be much lower during layoff/unemployment.

Also, depending on your state, the kids might be covered by a state health plan for kids.  In Michigan it is Healthy Kids.  Similar to Medicaid, very small premium payment and covers almost everything.  Income limits are pretty generous.

Then when your dh is employed again you can drop these when your new insurance starts...and your income increases 

If you get cost estimates from healthcare.gov (and I think you should), you should remember to factor in a few things when deciding, particularly if you'd paid a lot toward your current deductible by the time COBRA kicks in.

  • Would the costs even out if you've met or are close to meeting your deductible?Factor in things you anticipate needing. For our family, we have monthly meds expenses and then we also have at least one significant group of tests for a chronic condition. The person with this condition basically always meets their own deductible, and then we factor in meds for everyone, we're probably meeting the family deductible at the same time or right afterwards.
  • A follow-on to the deductible issue is if the unemployed person has been putting off an elective procedure so as not to miss work, you should consider that in your planning. It's not unusual for people who are unemployed and already close to a deductible to cram in everything they can medically while the plan year is on their side and missed days of work are not a factor.
  • Make sure you know what trade-offs you'll get in terms of HSA-eligible or not, deductibles, etc. You don't want to miss something important if you have to choose between two radically different types of plans.
  • I believe that you can pay COBRA out of your HSA funds if you have an HSA--the only time you can pay premiums with those funds.
  • If you are paying COBRA out of pocket (or any health insurance out of pocket), those costs can be itemized. You might see how that stacks up. You can claim only what goes above a certain percentage of your income. This changes some years, so you have to look at what it will be for 2020. If you have other kinds of deductions that you can combine, it might make a difference on your taxes to choose one kind of plan over another, or very different plans might end up costing a similar amount because of taxes.
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22 hours ago, bibliophile said:

Cobra has a 60 day retroactive period to make the premium payment. I believe we had to elect to accept coverage, but we did not pay immediately. Instead, I put the payment in an envelope on the fridge. I instructed my mom to mail off the check should we end up in the hospital. We ended up not needing to use the insurance over that two month time period and were able to save thousands of dollars on premiums. This was incredibly helpful during a time when no income was coming in!

If it turns out your unemployment lasts longer than 60 days, you would have to make those back payments in order to continue coverage.

This was several years ago, so you may want to double check to be sure that this is still how it works. 


this is exactly what we did when several years ago. It turned out that dh got a new job and we didn’t have to pay for cobra. Definitely worth researching to see if it may be a good option for your family!

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