COBRA enrollment; it pays to be cautious
originally posted: 7/31/2011 last update: 8/8/2011
Q: My contract with my company ended on June 30th. I would like to enroll in Cobra to keep my coverage. My concern is whether I need to enroll within 30 days as this is the 30th day since my job ended. My primary question is, How do I enroll? Secondary question is whether there are any programs currently for a discounted premium as I am not currently working.
A: Your question raises a number of subtle but important issues. Following are three comments directly on the COBRA option and two comments on COBRA alternatives:
1) The most important first step is to confirm that you are eligible for COBRA. Sometimes people assume that they are eligible for COBRA when, in fact, there are a range of reasons why COBRA might not be available. The easiest way to confirm your eligibility is to contact the insurer or plan administrator by telephone and ask direct questions about your COBRA enrollment. Please anticipate that it might take up to another 4 weeks before you receive a confirmation of eligibility in writing.
2) Assuming that you are eligible for COBRA coverage, there is no reason to be concerned about the 30 day timetable. In fact, be prepared to have 4 months total premiums by the time the first COBRA bill is due. Anticipate that by the time the administrator sends you a COBRA bill it may include the charges for two previous months (June and July) plus the current month (August). Sometimes it includes the upcoming month’s charges (September) as well. Unfortunately, the inability to pay all of this at once – especially at a time when you may not be employed - is a strategy deliberately employed by health plans to minimize the use of COBRA continuation coverage. There is no specific rule for the date that a COBRA bill must arrive; you have 30 days from the date of billing to make your first payment. If the eligibility notice and first bill never arrive, then the clock never starts and you may enroll when the COBRA notification issue is eventually resolved. For that reason, most COBRA notices are sent by certified mail with delivery confirmation signature required.
3) Finally, in the event that you have been notified that you are eligible for COBRA but have not been advised of the cost of the coverage or billing arrangements of the plan, then the burden is on you to prove that you are making timely effort to resolve the miscommunication. Document in writing, by certified mail, that you intend to make payment and that you need the billing details.
4) The most common alternate coverage for those who do not have to be concerned about the cost of significant and expensive pre-existing medical conditions is short term medical insurance. In most cases this can provide coverage for up to 12 months until you are enrolled in another group insurance plan. The cost is typically less than ½ of the COBRA option yet this lower cost option provides the same evidence of eligibility for takeover coverage to your next plan (called a “Certificate of Creditable Coverage”) as the COBRA plan.
5) More information on this topic as well as a listing of popular COBRA alternatives is available at www.COBRAplan.com.