a health insurance gap. a cobra loophole.

October 17, 2014 8:15 AM

I am going to have a health insurance gap between October 31 and December 23rd. That is a time period less than 60 days, and I hear there is a COBRA loophole, and I would like advice about it.

I am starting a new job the week after next, and thus leaving my current one next week. I have health insurance from my current job through the end of the month. Unfortunately, there is a 57-day waiting period for health insurance at my new job, which would give me health insurance on December 23rd.

I currently work at a small company that is apparently not great at negotiating with insurance providers, because I found out that my COBRA payment, should I go that route, would be astronomical. Almost $700 a month for not-so-great health insurance for one person astronomical. While I technically could pay this, I would very very very much prefer not to--it's a lot of money for me, and I'm a fairly healthy person who is up-to-date on all medical appointments. The main thing I use my insurance for is my birth control prescription.

I'm told that COBRA has a 60-day election window, and that what I should do is take the paperwork, keep it, and if something happens to me while I don't have insurance, file the paperwork, which would be retroactive and provide me allegedly uninterrupted coverage, so I could go to the doctor. I like the idea of this plan, but I worry: what if I get hit by a car or need my appendix out or have a piano drop on my head. Would retroactive coverage mean that, after I'm in the hospital for one of these emergency ailments, I could mail the paperwork in within that same 60 day window and thus be covered, even if I mail it after I receive care?

Basically, please explain to me how the COBRA 60-day window works. And feel free to offer other alternatives if there are any (I live in NY; apparently "temporary" health insurance is not a thing in my state). I also already looked into the state marketplace, and all of the plans had a deductible higher than my COBRA payments would be (my current insurance has no deductible).

posted by millipede to Health & Fitness (15 answers total)

I could mail the paperwork in within that same 60 day window and thus be covered, even if I mail it after I receive care?

This is my understanding. In fact, my family kind of accidentally did just that -- we needed to move to COBRA while I was pregnant with my son, and in the kerfuffle of dealing with everything, we mailed in the paperwork about a week after I'd gotten an $800 ultrasound, and it was covered.
posted by KathrynT at 8:23 AM on October 17, 2014 [1 favorite]

Not in NY, but my understanding is exactly in line with your description of the scenario. In other words, you have 60 days to enroll, which is retroactive to day 1. Doesn't matter if you incur expenses in the meantime - COBRA doesn't care about "pre-existing conditions" or other such nonsense.

If I were you, I would just wait it out without enrolling unless it becomes necessary.
posted by trivia genius at 8:24 AM on October 17, 2014

Could you buy two months of health insurance on healthcare.gov?
posted by lewedswiver at 8:34 AM on October 17, 2014 [1 favorite]

This is also my understanding of how Cobra works. Just make sure you have all the paperwork fully filled out, ready to go, and in a stamped envelope with a check made out for all the the premiums. Let whoever would be taking you to the hospital/helping you deal with a hospitalization know where it is and that they need to send it right away if that should happen.
posted by rainbowbrite at 8:37 AM on October 17, 2014 [1 favorite]

That's exactly what I was advised to do by my HR rep when I left one company with a 2-week gap in employment. Seconding rainbowbrite - once you get close to that deadline, keep the paperwork filled out and ready just in case.
posted by bookdragoness at 8:40 AM on October 17, 2014 [2 favorites]

Yes this is how it works! I also just switched employers and sat on the paperwork until my new insurance kicked in. I agree with rainbowbrite in terms of preparation for the worst.
posted by gillianr at 9:01 AM on October 17, 2014

I believe the advice of getting of retroactive coverage by selecting COBRA before the end of 60 is correct. However, I would check with professionals to make sure that new illnesses or accidents occurring during the 60 day period will be covered under the new (not COBRA) based coverage. This may not be a problem with the advent of ACA but I am not sure. You do not want a new illness or accident to be treated as a preexisting condition--continuous coverage would prevent this. As I said ACA may have made this a non issue but double check with your new employer/insurer.
posted by rmhsinc at 9:13 AM on October 17, 2014

ACA has absolutely made this a non-issue. I am currently on ACA coverage and we were not asked about pre-existing conditions in any way shape or form. All I had to indicate was age, zip code, and whether or not I smoked.
posted by KathrynT at 9:36 AM on October 17, 2014 [2 favorites]

The retroactive coverage thing is right; I relied on this in NY a few years ago (ended up not having to elect).

However, I would make sure to have a power of attorney in place and give the attorney-in-fact a copy of the necessary paperwork, should you be incapacitated and unable to execute/send documents during the time frame. This is relatively easy to do.
posted by melissasaurus at 10:10 AM on October 17, 2014 [2 favorites]

Yes, that is exactly how it works, but it is even better than that. You have 60 days to get your paperwork application in (make sure you don't miss it). But then you have up to another 45 days after submitting your paperwork before you must make your first premium payment. If you fail to pay, you simply lose your coverage. So best case you can actually delay up to 105 days and still have retroactive coverage.
posted by JackFlash at 12:18 PM on October 17, 2014 [4 favorites]

JackFlash beat me to it. He's exactly right. Good luck with your new job!
posted by Wet Hen at 2:55 PM on October 17, 2014

apparently "temporary" health insurance is not a thing in my state

Temporary health insurance is a thing in my state. I thought that was what I'd need to buy to cover three months -- no, it turns out the product I needed was actually called "permanent insurance".

If you want to buy insurance instead of relying on the COBRA loophole, call up an insurance broker and learn about what's out there in your state. I couldn't find any information about what I needed to buy online, spent quite a while figuring it out over the phone.
posted by yohko at 9:27 PM on October 17, 2014

I could mail the paperwork in within that same 60 day window and thus be covered, even if I mail it after I receive care?
Yep.
One caveat: it will take a while for that coverage to be processed and show up on the insurance company's books. You will look uninsured. That's ok for emergency room emergencies but is a problem for things like chemotherapy and cardiac rehab and removal of suspicious moles and suchlike. Those things would take some negotiating. In my world, saying that COBRA is in process works pretty well, but insurance companies have varying levels of tolerance.
posted by SLC Mom at 9:45 AM on October 18, 2014

When I left my job before last, I was in a similar situation and thought I would just go without insurance until the new insurance kicked in. However, I had an emergency, and I received healthcare in the month after my employer insurance ended. When I elected COBRA 44 days after separation from that employer, all the healthcare I had received was covered retroactively. Both my medical providers and my previous employer told me that this was not up to the whim of the employer, but was mandated by the federal government.
posted by hworth at 7:43 PM on October 18, 2014 [1 favorite]

Chiming in to agree that this is exactly how COBRA works. I had a 57 day gap in employer insurance while switching jobs. I held on to the COBRA paperwork and only submitted it after one of my dependents had an accident in a NYC subway station, requiring an ambulance and a trip to the ER (but Mom, they didn't DO anything but look at me and give me some Tylenol). COBRA covered it.

Keep in mind, though, that COBRA is not some magic policy that covers All The Things. It is a continuation of your EXACT same policy that you had at your old job. Mine was a shitty, very high deductible policy and I ended up paying a lot of the cost of that ER visit, PLUS the $1400 for two months of coverage. But the 60-day retroactive policy gives you an opportunity to make that decision after you have all the facts.

P.S. - can you get your birth control NOW for 2 months in advance, or can you get it at Planned Parenthood next month or can you ask the pharmacist how much it would be to just pay out of pocket for 1 or 2 months? It's not worth it to pay $1400 on a COBRA policy to save $50 on BC.
posted by CathyG at 8:06 PM on October 18, 2014