U.S. health insurance scam of the minute.

April 20, 2015 2:15 PM

I need COBRA health care coverage only for a week in March. Ceridian says I need to pay them for half of March and all of April because of "COBRA guidelines." Rat smelled.

I need COBRA health care coverage for only one week in March.

When I (finally) received my COBRA election notice, I sent it in posthaste via priority mail. There was no option to elect coverage period. And then I waited, and waited, and waited for the first bill.

Now, Ceridian has billed me for half of March and all of April... and says I have to pay for both periods or I'll lose coverage for the entire period.

This sounds like BS to me. I've filed a request for assistance with the U.S. Department of Labor because they handle COBRA inquiries. I may also file a complaint with my state's AG.

Until (and if) I hear back from the DOL: anyone had a similar experience? Were you able to combat it successfully?

posted by Sheydem-tants to Work & Money (6 answers total)

I don't get it. March is over. COBRA allows you to pay and get retroactive coverage for the first 56 days generally. Do you have coverage now? Is this about next year's taxes? Or did you get some sort of medical care during that week that you need coverage for? Because yes, you can't just get a week of health care coverage and this is how COBRA (suckily) works otherwise. But if you don't need retroactive coverage I'd just not pay them, blow it off and say you had coverage during that month because you basically did.
posted by jessamyn at 2:37 PM on April 20, 2015 [1 favorite]

If you used the plan in March, then yes you need to pay for the half of March they're requesting. Be glad you're even getting a reprieve on the other half of the month.

If you didn't and won't use that health coverage in April, send your March payment in with a letter stating you wish to have Cobra cancelled effective March 31.
posted by phunniemee at 2:50 PM on April 20, 2015

According to "The New Health insurance Solution", by Paul Pilzer (2005):

"You have until day 60 to send in your Cobra acceptance letter (retroactive to day 1).
You now have 45 days (until day 105) to send in your first premium payment for the first 105 days.
If your family has had no major medical problems during this time, then don't send in your cobra premium payment; your coverage will automatically terminate retroactive to day 1. According to cobra law, the only result of your nonpayment is that your cobra coverage is terminated effective day 1, and you owe nothing to your employer. "

So, yes, you will lose coverage for March, which is already over. So just don't pay it.
posted by H21 at 3:28 PM on April 20, 2015 [2 favorites]

Since it's currently May, unfortunately phunniemee's advice won't work. Assuming the COBRA election was received in April, the initial bill would be for [part of March plus] April. COBRA is unique in the way that it can be elected after the fact as a sort of emergency insurance, but you don't get to cherry-pick your coverage period by electing coverage after your desired termination date. Run the numbers and see for yourself whether it's worth it to pay for March and April coverage for whatever claims you have from March, but you're not going to get anywhere by bothering the DOL about this.
posted by a box and a stick and a string and a bear at 4:53 PM on April 20, 2015

[sorry, it's totally not May... I have no idea where that idea came from. Still, no insurance is going to let you elect coverage at the same time you're requesting a retro term date, COBRA or not.]
posted by a box and a stick and a string and a bear at 5:15 PM on April 20, 2015

Best answer: I am a benefits administrator. I am not your benefits administrator.

COBRA can be elected within the first 60 days after you lose active coverage. Day 61, you're out of luck. COBRA will ALWAYS date back to the date after you lost coverage- it's intended to cover you if you lose your job and then fall down a flight of stairs and break your leg the next day. It is supposed to be a stopgap between losing insurance and gaining it. While you can have up to 18 months of it (or 36 if it's a dependent qualifying event!) most people just have it for a few months or weeks between when their coverage ends and their new coverage begins.

Did you use your medical, dental or vision coverage during that week in March? If not, you may not need coverage. If so, you may want to call the physician and ask what it would cost for a non-insured individual. If the cost is lower than your COBRA bill, you may just want to pay your bill. If you used medical, but not dental or vision, you can call and cancel those back- because you're within your first 60 days, you may be able to make changes to your benefits. This is true for the whole triad of before-tax benefits- you don't need to elect them all, just the ones you used.

With COBRA, you must pay your first bill in full, and within 45 days of your election date. Do not try to calculate a partial payment based on what you think you owe for a single week or just for March. Because your first bill reflects March and April, that's what you'll need to pay in order to get that week of coverage. Depending on the billing dates your company uses for their COBRA coverage, and how they process their payments, you may be seeing a bill any day now that reflects March, April and May- most COBRA administrators ask for payment in advance.

But! I do have a bright light- maybe. You mentioned only needing COBRA for a week- did you gain coverage elsewhere? If you gained coverage elsewhere, you have experienced a qualified status change which may allow you drop coverage retroactively. This will not get you out of paying that first bill in full, but may entitle you to a refund in premium overpayment.
posted by Torosaurus at 5:45 PM on April 20, 2015 [8 favorites]