I have a confusing COBRA healthcare question, and I'm overwhelmed.
November 24, 2017 7:36 AM   Subscribe

I had a job end in September. I haven't done anything about health insurance. I need to figure out a few things - thank you.

So, this is basically the timeline:

- I had a temporary role, that brought healthcare with it, end at the end of September.
- Around the same time, I had to abruptly (and hopefully temporarily) move from NY (where the job was based) to NJ (for unrelated family reasons.)
- Because my job sent my COBRA letter to the wrong location, and didn't get me my proper notification letter to my new NJ address until mid-October, I have until mid-December to elect into COBRA.
- I haven't done anything about this yet. (I know. It's been a really hard autumn.)

I find myself wondering about two things:

1. COBRA is, as you might imagine, very expensive, and I'm now mostly unemployed. I find myself wondering if I can get on the exchange as a recently job-terminated person.

But what's not clear to me is this: can you retroactively get insurance on the exchange to cover that missing month of October? So I don't have a gap in coverage?

See, I know you can get retroactive insurance through COBRA - which sounds good to me, especially because once I elect into it, I have another 30 days or so to pay for the multiple (!) months of retroactive insurance I would have to pay for. Can I do that with the exchange, or would I have that gap of coverage that couldn't retroactively be erased?

2. The amount I was charged for COBRA seems to be the same it cost my employer, who was based in NY - but I'm now expecting to be based in NJ. Wouldn't the money go down to reflect the fact my insurance would be NJ-based? Or can I not switch state lines and still accept COBRA? It's been really hard to find information on this.

Thank you for your help navigating something causing me immense anxiety and stress during a really trying time - I set up an address, cobraquestions@gmail.com, for any direct messages or clarifications needed. Thank you thank you!
posted by anonymous to Health & Fitness (6 answers total) 2 users marked this as a favorite
I can't answer your questions directly but suggest that you contact the help line for ACA signups: 800.318.2596 (it's available 24/7) or go to localhelp.healthcare.gov to find someone in your location to help you. You might also contact the insurance company that offers your COBRA plan.
posted by mcduff at 8:03 AM on November 24, 2017 [1 favorite]

1. Yes, you can get on the exchange as a recently terminated person. https://www.healthcare.gov/have-job-based-coverage/if-you-lose-job-based-coverage/

You cannot get coverage on the exchange to retroactively cover the gap. But you may not need to. You are allowed to have one gap per year of less than 3 months without paying a penalty. https://turbotax.intuit.com/tax-tips/health-care/understand-and-avoid-health-care-reform-tax-penalties/L595CKI9f

2. COBRA costs the same as it would have cost your employer when you were employed. It's a continuation. You're not going to get a discount on it.

You can also find someone local who can walk you through the process and answer any questions that come up: https://localhelp.healthcare.gov/#/
posted by Former Congressional Representative Lenny Lemming at 8:18 AM on November 24, 2017 [2 favorites]

I think the best use of cobra is when you will only have a short gap and you don't have any pressing medical needs, but it's there in case of an emergency. I knew I could retroactively put cobra into place when I was changing jobs over the summer, but I also knew I likely wouldn't need it, which is how it worked out. I would plug your information into the exchange, and see what prices you're getting, but it's likely to be better than cobra. The coverage may not be as good, or it may be better (depending on how good your insurance was). I see actually utilizing cobra something you do because you have to, after exhausting other avenues.

Though I will say people on askmefi seem to really love calling the healthcare exchange and think it's great but I'm pretty wary as I've called about pretty straightforward questions and gotten different answers from different people.
posted by Aranquis at 9:49 AM on November 24, 2017

First off, you shouldn't worry about retroactive coverage too much unless you have big medical bills in that period which you want to cover. The ACA eliminated the old rules about maintaining continuous coverage for pre-existing conditions.

You won't pay a penalty for non-coverage unless you have a continuous gap of at least 90 days.

Loss of employer coverage is a qualifying event that allows you to enroll in an ACA exchange insurance plan at any time, but you must do it within 60 days of losing your old plan. But this also happens to be the open enrollment period for the ACA so anyone can sign up for an exchange plan.

But here is the catch. New 2018 ACA plans start Jan 1. You lost insurance at the end of September. That means that you will have been without insurance for more than 90 days and possibly subject to a penalty. But don't despair. The penalty is pro-rated for just the number of months in the gap. Assuming you get new insurance starting in January, you have a 3-month, or 1/4 year gap. So your penalty, instead of being $695 would be $174. You might decide that the $174 is not worth sweating and just plan on signing up for an ACA plan now that starts in January. $174 is likely less than any plan you could sign up for the rest of 2017. This assumes you are in good health and don't need immediate coverage.

Or you could apply for COBRA and just pay the October premium. That would reduce your gap to 60 days and eliminate the 90-day penalty. But the COBRA premium is likely much more than the penalty if you don't get COBRA.

Or you could try to sign up for an older 2017 ACA exchange plan for just December based on your qualifying event of losing your job. This would eliminate the penalty but probably cost more than the $174 penalty.

Here's what I would do. Apply right now for COBRA coverage but don't give them any money. You must do this within 60 days of losing coverage so do it right now. You have up to 45 days after submitting your application to pay so that gets you through to January. If you have no expensive medical emergency between now and January, just don't pay for COBRA. Your application simply expires after 45 days. If something does happen, you can pay for retroactive coverage. If you don't pay the COBRA, you may have a $174 penalty, but that's going to be much cheaper than even one month's COBRA.

But whichever option you choose, you should make sure to sign up for new ACA coverage beginning in January. It's going to be much cheaper than COBRA and you likely will get a subsidy based on your unemployment. Depending on which state you are in, the enrollment deadline might be as soon as December 15, so get right on it. Your enrollment is going to be more complicated because by default your subsidy is based on your 2016 income tax return but your 2018 income is likely to be much less. You are probably going to need help from one of the ACA navigators to assist with your application in order to get a subsidy based on your 2018 unemployment. Depending on what state you are in, you might qualify for near-zero cost Medicaid.
posted by JackFlash at 10:11 AM on November 24, 2017 [4 favorites]

Beware: once you start paying for cobra, you can't drop it and get onto Obamacare until next year's open enrollment!
posted by monotreme at 5:21 PM on November 24, 2017 [1 favorite]

Beware: once you start paying for cobra, you can't drop it and get onto Obamacare until next year's open enrollment!

Yes, but you could get on COBRA for October and simultaneously apply for an ACA exchange plan to start in January since the current open enrollment extends through at least December 15. You can drop COBRA at any time but have to wait until January to start the ACA plan if you sign up during open enrollment.

As explained above, I recommend applying for COBRA now, not paying for it, and simultaneously applying for an ACA plan to start in January.
posted by JackFlash at 6:08 PM on November 24, 2017 [1 favorite]

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