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Another COBRA question for the experts
Old 08-02-2015, 09:59 AM   #1
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Another COBRA question for the experts

I've searched unsuccessfully, and am hoping someone here will know the answer.

Situation is I'm thinking about what month/time of year to ER. Could go end of this year, maybe next June, end of 2016, undecided. I've already gone to less than full time, working the minimum to maintain HI, and it's obvious to my boss that I'm not going to work to 65 (we've known each for 25 years and I made a career change to less stress/money, he's no dummy and sees that I'm on the glide path, but he's OK with that and wants me to stay as long as possible, it will be VERY hard to get my experience at the salary they're willing to pay). He's asked me to inform him in advance (no definition of how long) in order to allow for succession planning. I have no problem with this, within reason, aside from thinking I should be paid more, I have a great work situation. Some would think I'm crazy to give it up, but the worst day of not working still beats the best day at work, right? Given the typical hiring/work cycle, I think 3-4 months is reasonable. I would cut back even more during that time to use up vacation and get pension credit, which I wouldn't get if vacation is just paid out on departure. I'm at a University, and every semester has a bunch of work during the month leading up to its start, so I would stay to do that with the replacement the first time. I should add that I'm research staff, so I don't have classes to consider in finishing out a semester.

DW is medicare age eligible, but on my work policy, while I am under medicare age. For a couple of reasons, ACA subsidies are not a consideration (we'd barely hit a subsidy of less than $1k if we pulled every lever possible, and would have to give up Roth conversion space that would just bite us back down the road). Once my work coverage stops, she must start medicare immediately or be subject to increased premiums. She is also retired under a state retirement plan that will partially subsidize her HI, so the best deal for her is to move to that plan. If it's a mid year departure, there is some extra cost for satisfying deductibles again, but that will be minimal.

In my individual case, COBRA looks to be the better deal. Although we're on a HDHP, we satisfy the deductible in the first six months or so of the year. Both of us have chronic health issues that require regular attention, so the low cost REALLY high deductible plans don't look cost effective. Would rather not switch mid year.

Still reading? Thanks!

The question is, can I elect single COBRA coverage upon departure without having DW continue since we were both covered by the policy while working? Or do I have to take the same type of coverage, the couple coverage that's in place while working.

If so, I wonder how they handle the deductibles. The couple deductibles are twice the single, but if one individual has no expenses, the other has to hit the higher couple limit before co-coverage kicks in. What if I have low expenses in the first half of the year while DW has high expenses and we hit the couple deductible. Then she's off, and now it's just as a single on COBRA. Do I have to hit the single deductible on my own?

Hope that makes sense. Easy solution is to FIRE at the end of the calendar year, but that isn't necessarily desirable for other reasons. Thinking a mid year 2016 departure might suit me for personal reasons. No other anniversaries to consider, just every month I work is a little more into the stash. Trying to anticipate the transition process in advance, and make the best choice possible. Also want to understand in case I plan a date to go and they ask me to hang around some if they are delayed in replacing me (which I highly expect to happen).

Thanks for your assistance!

oldphd
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Old 08-02-2015, 09:34 PM   #2
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The question is, can I elect single COBRA coverage upon departure without having DW continue since we were both covered by the policy while working? Or do I have to take the same type of coverage, the couple coverage that's in place while working.

Yes, you will have the option of electing single COBRA coverage upon departure.

"LovingArizona"
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Old 08-03-2015, 02:29 PM   #3
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Agree with LovingAZ.

About two weeks after your last day you will receive a letter with your selection options-and you can add or remove dependents at that time.


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Old 08-03-2015, 02:52 PM   #4
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If oldphd elects COBRA and chooses to stay on COBRA for a few months, can he drop COBRA mid-year and go on ACA without waiting for the enrollment period?
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Old 08-03-2015, 02:58 PM   #5
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My interpretation of the regulations is that if you enroll in COBRA even for one month, you don't qualify for the special enrollment period until your COBRA period ends.
The person would have to wait for the next normal open enrollment, in November.


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Old 08-03-2015, 03:53 PM   #6
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Quote:
Originally Posted by irishgal View Post
My interpretation of the regulations is that if you enroll in COBRA even for one month, you don't qualify for the special enrollment period until your COBRA period ends.
The person would have to wait for the next normal open enrollment, in November.
You're correct irishgal. Here's a link that I thought would be good to share.

https://www.healthcare.gov/unemployed/cobra-coverage/
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Old 08-03-2015, 04:00 PM   #7
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Thanks for the replies!

That was what I was thinking based on what I remember from a layoff almost 25 years ago which is a little fuzzy, but rules change and I couldn't find any supporting documentation.

My plan is to take a good look at policies this fall in preparation. I can also get HI through DW's retirement group. The cost is higher than many ACA policies, but the deductible is lower. Given that I have a couple of routine maintenance items with docs that will keep me spending money one way or the other, it may still be the best option. It also has a better network than the cheap-o policies.

IIRC, COBRA ending is a qualifying event, but that's it. Given the deductible situation, I think it will work out best to take COBRA only until the end of the year in question. Either this one if resigning during the first half of the year, or the next one if resigning during the second half.
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Old 08-03-2015, 04:01 PM   #8
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I switched to a HDHP in October last year. No indication that the deductible would be prorated for the three month period. Probably not a good choice if you were actually going to have expenses. I think COBRA for the rest of the year (assuming your paid off deductible carried over) and then switch if you want during open enrollment would work.
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Old 08-04-2015, 10:52 AM   #9
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Originally Posted by Animorph View Post
I switched to a HDHP in October last year. No indication that the deductible would be prorated for the three month period. Probably not a good choice if you were actually going to have expenses. I think COBRA for the rest of the year (assuming your paid off deductible carried over) and then switch if you want during open enrollment would work.
I wasn't suggesting a prorating, but don't think I explained myself well. Will try again.

Let's say I w*rk and have the two of us on the policy for the first 6 months. Our deductible is $1K/person, or $2K/family. We hit the deductible, with me spending $500, and DW spending $1,500. Now I move to single coverage Cobra for the last six months after leaving w*rk, and DW switches off to her plan.

Have I met my deductible? If we were still covered as a couple, I would surely have met it and my next $500 expense would be covered at the post deductible rate of 90/10. Or, when single, do I still have to spend $500 as part of my single coverage?

Hopefully that is more clear. Anyone run into this before?
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Old 08-04-2015, 02:36 PM   #10
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Originally Posted by oldphd View Post
I wasn't suggesting a prorating, but don't think I explained myself well. Will try again.

Let's say I w*rk and have the two of us on the policy for the first 6 months. Our deductible is $1K/person, or $2K/family. We hit the deductible, with me spending $500, and DW spending $1,500. Now I move to single coverage Cobra for the last six months after leaving w*rk, and DW switches off to her plan.

Have I met my deductible? If we were still covered as a couple, I would surely have met it and my next $500 expense would be covered at the post deductible rate of 90/10. Or, when single, do I still have to spend $500 as part of my single coverage?

Hopefully that is more clear. Anyone run into this before?
I thought that was clear the first time... but I have a reading disability. I think the best way would be to call the insurance company and ask the variants of this question. They should be able to give you the correct answers.

In comparing ACA plans... Include that cost of the plan and OOP expenses. In my checking, I've often found that the more expensive plans can cost you more in total that some of the less expensive plans... even when offered through the same company. There is usually a sweet spot where the more expensive plans are a bit less expensive. Comparing Cobra to ACA is a whole different story.

best of luck.
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