Did I Screw Up: COBRA Edition

May 27, 2022 9:40 AM

Based on what I thought the answers were in this Ask MeFi post, I enrolled in my former employer's COBRA plan on April 29th.

Link to excerpt of enrollment form here.

Meds: We also absent-mindedly filled a couple prescriptions worth maybe $50ish total during May.

Employer is now asking for the May payment of ~$1,400 to be made through them.

My understanding was that under COBRA, after signing and returning the form, I would only have to pay for May retroactively if I needed the insurance. Is that not correct?

Can I simply decline to pay now with no consequences, and work out the prescription price differences with the insurance company?

Do I have a problem? If so, what are my options? How can I reset / undo this if needed?

Thanks, hive mind!

posted by ZenMasterThis to Work & Money (6 answers total)

COBRA goes into effect retroactively from when you sign up for it, not from when you use it. So the advice you got suggested NOT signing up for it, and then if you needed medical treatment, getting the treatment and signing up AFTER that.

So if you were going to be uninsured all summer starting June 1, you would NOT sign up, hoping you didn't need insurance. But then you get sick on July 1 and go to the hospital, you can sign up for COBRA when you get home on July 5. COBRA would would then trigger retroactively from June 1, when you were eligible. So you'd owe the June payment and July payment, but you'd be covered for all the treatment you got in that time.

I'm afraid I don't have any info on whether you can retroactively get out of COBRA, but filling your prescriptions was not the mistake; signing up for COBRA before you needed it was.
posted by gideonfrog at 9:58 AM on May 27, 2022 [11 favorites]

You filled out the election form - that means you enrolled in coverage (and agreed to pay for it). You've also used the coverage, so you definitely owe them money. I think you misunderstood - you weren't supposed to submit the form unless you needed coverage.

You should contact your former employer to pay the $1400, and make sure that it's canceled so they don't bill you for June's coverage.
posted by hydra77 at 11:12 AM on May 27, 2022 [1 favorite]

Best answer: I think it's worth calling your employer and saying you made a mistake and didn't mean to enroll (but call on June 1st, after your new insurance kicks in). If that works, your employer will tell insurance you weren't insured in May, insurance will ask either you or the pharmacy for its money back if it paid anything towards your prescriptions, and you will pay the remainder of your prescription cost.
posted by mskyle at 11:15 AM on May 27, 2022 [1 favorite]

Best answer: Here's the government FAQ on COBRA, and here's an excerpt from Q15:

When you elect continuation coverage, you cannot be required to send any payment with your election form. You can be required, however, to make an initial premium payment within 45 days after the date of your COBRA election (that is the date you mail in your election form, if you use first-class mail). Failure to make any payment within that period of time could cause you to lose all COBRA rights.

My understanding is that if you never pay the initial premium, then the only penalty is that in retrospect you never had any coverage (despite the word "required"). (In general the way that you cancel your COBRA coverage is to just stop paying.) I don't know what this would mean for your insurance that already acted as if you did.

In any case, I recommend getting an opinion from an expert since you've already gotten a few conflicting answers here.
posted by dfan at 11:25 AM on May 27, 2022 [2 favorites]

You signed up for COBRA, and now you're paying for it. It's really that simple. You were going to get the bill whether you filled a few prescriptions or not. It was probably a bad choice, but you can cut your losses and switch to Obamacare.

It's 2022 and we have Obamacare. Don't enroll in COBRA, enroll in Obamacare. Call the number for whatever they call Obamacare in your state and talk to a broker and they will take care of you.

COBRA is now inappropriate for most people who just lost their jobs, exceptions mostly being people who were making huge salaries where COBRA will actually be cheaper than unsubsidized Obamacare, or who have medical conditions that dictate continuing treatment on the plan they had with their ex-employer, expenses be damned.

Please, people, we have Obamacare now. It was a long and costly political struggle, but we won.

Use it!
posted by Scarf Joint at 3:41 AM on May 28, 2022

Response by poster: UPDATE: Got this message from my former employer last Friday ...

"I have just received the confirmation that our agent was able to cancel your policies retroactively."

WHEW!
posted by ZenMasterThis at 4:43 AM on June 8, 2022 [2 favorites]