Insurance continuation question
December 26, 2004 5:15 PM   Subscribe

Insurance continuation question: You are laid off of work and go onto COBRA insurance. You get hired for another job that comes with health coverage and start work on the 4th of the month. If you do not pay your COBRA payment for that month, do you have a lapse in coverage for 4 days? I have tried googling but the fact that the original company is a Delaware corporation which operates in California is confounding my ability to detangle the mess, especially as the deadline for COBRA payments for a given month is on the 5th of the month.
posted by hindmost to Work & Money (11 answers total)
Does the insurance kick in right away on the new job? Most of the time there is some delay in getting coverage started. The question may be moot.
posted by AstroGuy at 5:18 PM on December 26, 2004

Your old company should be able to answer this question for you if someone here cannot. At the job I currently have, my insurance kicked in a month after hire. I was hired near the end of the month though, so I just double paid for the final week of the month (paid for both COBRA and my new insurance).

However, my husband was, at the time, not covered under COBRA because we weren't married. At my old company, he was covered under the domestic partner option. COBRA does not acknowledge domestic partners. We married before my new insurance took effect, so he was covered under the new insurance. So he had a lapse of a month between the old and the new insurance. Even though he has a condition, the new insurance covered him just fine after receiving a letter from the old insurance stating his coverage terms. Perhaps there is a grace period.
posted by veronitron at 5:33 PM on December 26, 2004

I think you need to find out when your new health coverage starts and when the old stuff stops. The benefits people at both companies should be able to sort that out. If you have a lapse, COBRA is probably more expensive than buying short term catastrophic health insurance to tide you over. If you have a major expense, it covers, otherwise, you are on your own. You can buy it through your normal (car, home) insurance agent. I've done that in the past.
posted by Doohickie at 5:45 PM on December 26, 2004

Response by poster: I'm almost certain that there is only a 4 day gap. There are no outstanding medical conditions. I believe that for some states there is a grace period of a few days before a lapse in continuation is official, but I've also heard stories about insurance companies getting very anal about even a single day's lapse.
posted by hindmost at 6:01 PM on December 26, 2004

A bridge policy from your insurance agent would be very cheap then. I think the way it worked for us is we paid, oh, I don't remember.... $500?... for a family of four for catastropic insurance, then when the new work insurance kicked in, we canceled and they refunded something like 80% of that (pro-rated for the amount of days we were covered). If you like peace of mind, it's worth checking into.
posted by Doohickie at 6:49 PM on December 26, 2004

I'm almost certain that there is only a 4 day gap. There are no outstanding medical conditions.

The issue is whether there are any preexisting conditions, not whether there is anything outstanding that requires treatment at the moment. Preexisting conditions must be covered if there is no lapse in coverage, but if there is a lapse, then they might not be not covered for a year or more (read the fine print of the your new policy). The concept is that the insurer doesn't want a person to play "catch-up" on their dime.

So if there is any possibility that an previous problem could flare up again, or a problem could arise which an insurance company would argue is related to a prior medical problem, then you almost certainly should pay whatever it takes to avoid a gap/lapse.

You'll find the legalise here, under "Group Insurance Portability".
posted by WestCoaster at 8:03 PM on December 26, 2004

Why would a four-day lapse matter?
posted by squidlarkin at 9:07 PM on December 26, 2004

From my past experience working in HR in Oregon... Unless stated otherwise, most insurance coverage would begin on the first of the month following 30 days of employment. Since it begins on the first, and since COBRA ends on the last of the month there would be NO LAPSE. Under what is stated above though, and since you were hired on the forth (not the first...) you'll have to wait until the start of the third month before you would be eligible for your new insurance, but you wouldn't have any lapse in coverage.
posted by pwb503 at 9:59 PM on December 26, 2004

This might be past the point, but: Delaware is the default state for incorporation in the US. It has nothing to do with your COBRA.
posted by goofyfoot at 11:34 PM on December 26, 2004

Get the opinion of both companies, and get it in writing. From experience with insurance companies, they will tell you anything on the phone, whether it's right or not.
You can't afford to let it lapse for even one day, as the pre-existing condition clause kicks in and may take one or even two years to wear off. Insurance compies can figure out a way to define almost anything as pre-existing if you give them a motive.
posted by unrepentanthippie at 5:28 AM on December 27, 2004

Echoing unrepentanthippie, do not let your coverage lapse; I had a week's gap going from one office job to another because new job changed my start date. It later cost me a huge amount of money ($1000+) after I discovered the physical therapy I sought for my pre-existing condition was not covered because of that gap. To make matters worse, the insurance company rep originally said it would be - to my face. Not everyone has medical issues, but paying for an extra month's COBRA is cheap compared to finding out later that what you thought was covered is not. Do not give the insurance company any excuses to screw you over - they don't behave rationally, like human beings. Not that I'm bitter or anything.
posted by deliriouscool at 6:19 AM on December 27, 2004

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