Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
COBRA to Individual HI GAP
Old 04-19-2016, 10:58 AM   #1
Recycles dryer sheets
 
Join Date: Dec 2012
Location: Houston
Posts: 99
COBRA to Individual HI GAP

I just found an unexpected health insurance gap when I applied for an individual health insurance policy this week. If someone has other ideas, let me know, but the only way I found to fill my gap was to buy short term insurance.

Thanks, Greg



* My COBRA insurance expires 6/10/2016.
* I am in Texas.
* I called both Blue Cross/Blue Shield and United Healthcare - both only allow starting ACA qualified health insurance the first of the month AFTER Cobra ends. So, insurance would start 7/1/2016, and I'd have a gap of 20 days.
* My only option is to buy a short term plan from United healthcare that does not cover pre-existing conditions, and is not ACA compliant. This is what I did. It's a good thing that I don't have an ongoing heart, diabetes, or cancer treatment. I'm lucky there! Any pre-existing condition expenses in that 20 day period would not be covered.

If I had this to do over with, I would have cancelled my COBRA effective the end of 2015, and started an ACA plan the first of 2016. That way I wouldn't have had this gap I had to fill.
__________________

__________________
Grigori is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-19-2016, 11:38 AM   #2
Recycles dryer sheets
littleb's Avatar
 
Join Date: May 2015
Posts: 156
Your Cobra coverage should be administered exactly like the health plan you were covered under during you or your spouse's employment. Most plans terminate the coverage the end of the month but it depends on how the Summary Plan Description is written. Termination of employment in most cases covers you until the end of the month. Other qualifying events (divorce, child reaches a certain age) might terminate on the actual date.

Did you check with your HR department or employer to make sure your COBRA termination date is on the 10th? The gap situation seems like a grey area that nobody thought about. However, the ACA plan was written and passed by politicians.
__________________

__________________
littleb is offline   Reply With Quote
Old 04-19-2016, 12:43 PM   #3
Full time employment: Posting here.
 
Join Date: Apr 2006
Posts: 925
Could you have left the USA for vacation during the gap period and bought travel health insurance? This is also a short term insurance policy; but, it might have been cheaper than getting coverage in the USA.

I'm not sure if this would have worked in your situation since I have not researched it recently. But, I did look into something similar a few years ago when the prospect of being abroad for several months at a time was being considered.
__________________
If there's one thing in my life that's missing; It's the time I spend alone
Sailing on the cool and bright clear waters; There's lots of those friendly people
Showin me ways to go; And I never want to lose your inspiration
CoolChange is offline   Reply With Quote
Old 04-19-2016, 02:09 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Jan 2008
Posts: 1,495
This makes no sense. The COBRA law was passed to eliminate situations exactly like this. It's likely your assumption that your coverage ends on the 10th is incorrect, and I suggest checking with your past employer or COBRA administrator before taking any action. I know of no employer insurance that doesn't terminate at the end of any given coverage month.
__________________
Options is offline   Reply With Quote
Old 04-19-2016, 02:21 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Feb 2014
Posts: 1,044
I thought that expiration of COBRA created a Special Enrollment Period and the ability to buy a policy off the Marketplace. Also policies are for full months. Something doesn't add up.
__________________
jim584672 is offline   Reply With Quote
Old 04-19-2016, 02:36 PM   #6
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 8,796
I had the same situation... Somewhere in one of the many budgetary tweaks they'd changed our health insurance from ending at the END of the month to ending on the last day. COBRA specifically says 18 months - not 18 months plus a partial month. Up until 2 years before I retired, the insurance lasted till the last day of the month that you terminated in....

Unlike Grigori, I made the switch at the end of the calendar year from COBRA to ACA. But if I hadn't - my insurance would have ended mid-month. Actually, I continued dental on COBRA - and had to work with our dentists office to get everything in submitted prior to the end of COBRA dental.

There is no rule/law that says insurance from an employer lasts till the end of the month. It used to be customary.... but it's a way companies can save a few pennies - so they are switching over.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 7%, rental income 18%
rodi is offline   Reply With Quote
Old 04-19-2016, 02:42 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Jan 2008
Posts: 1,495
Quote:
Originally Posted by rodi View Post
I had the same situation... Somewhere in one of the many budgetary tweaks they'd changed our health insurance from ending at the END of the month to ending on the last day. COBRA specifically says 18 months - not 18 months plus a partial month. Up until 2 years before I retired, the insurance lasted till the last day of the month that you terminated in....

Unlike Grigori, I made the switch at the end of the calendar year from COBRA to ACA. But if I hadn't - my insurance would have ended mid-month. Actually, I continued dental on COBRA - and had to work with our dentists office to get everything in submitted prior to the end of COBRA dental.

There is no rule/law that says insurance from an employer lasts till the end of the month. It used to be customary.... but it's a way companies can save a few pennies - so they are switching over.
You're exactly right, and you know, I figured as much. You had one cheap employer. Saving money on the backs of its employees. More than anything, seeing employees treated unfairly contributed to my decision to retire, as I saw enough of it to last a lifetime.
__________________
Options is offline   Reply With Quote
Old 04-19-2016, 03:05 PM   #8
Recycles dryer sheets
 
Join Date: Mar 2014
Posts: 152
Can you buy a policy for the month on the open market?
__________________
user5027 is offline   Reply With Quote
Old 04-25-2016, 09:24 PM   #9
Recycles dryer sheets
 
Join Date: Aug 2013
Posts: 402
Base on my research, it's more economical to end Cobra at the end of the year (Dec. 31st), and get ACA effective January 1st, especially if you have a high salary the year you left employment, and you have unemployment the following year.

What happens is that you'll get ACA penalty without the Cobra, but if you are unemployed the following year or will only have partial employment - it's best to get ACA for a lower subsidized insurance rate.
__________________
No to consumerism, Living a simple life, enjoying the experience - not the material stuff
cyber888 is offline   Reply With Quote
Old 04-25-2016, 09:38 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,387
First, double check to be sure that your coverage ends on other than the end of a month... strange in my experience but it could be.

Tell them that your COBRA ends on 5/31/2016.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 04-25-2016, 11:58 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,248
Quote:
Originally Posted by Options View Post
This makes no sense. The COBRA law was passed to eliminate situations exactly like this. It's likely your assumption that your coverage ends on the 10th is incorrect, and I suggest checking with your past employer or COBRA administrator before taking any action. I know of no employer insurance that doesn't terminate at the end of any given coverage month.
Since I did the buying of health insurance for the last company I worked for, I can tell you that the termination of health insurance on the last day of employment IS an option...

Think about it... an employee is paid on the 15th and end of month... he quits on the first day of a month... the company does not withhold any money to pay that months insurance... so, they want to cancel him ASAP...
__________________
Texas Proud is online now   Reply With Quote
Old 04-26-2016, 06:34 AM   #12
Recycles dryer sheets
 
Join Date: Nov 2014
Posts: 381
Quote:
Originally Posted by cyber888 View Post
Base on my research, it's more economical to end Cobra at the end of the year (Dec. 31st), and get ACA effective January 1st, especially if you have a high salary the year you left employment, and you have unemployment the following year.

What happens is that you'll get ACA penalty without the Cobra, but if you are unemployed the following year or will only have partial employment - it's best to get ACA for a lower subsidized insurance rate.
That's exactly what I did. I only spent a few months on Cobra, primarily because I wasn't quite ready to FIRE (was looking for a new job) and because the previous company paid a month or two of it. Plus there was an expense for my daughter coming up that was a lot cheaper out-of-pocket on my employer's plan than it would have been on any ACA plan I looked at.

Regardless of that, I ended my Cobra on the last day of the year and the ACA plan started on the first day of the year - no gaps to deal with.
__________________
big-papa is offline   Reply With Quote
Old 04-26-2016, 07:46 AM   #13
Full time employment: Posting here.
 
Join Date: Jan 2014
Posts: 661
Quote:
Originally Posted by pb4uski View Post
Tell them that your COBRA ends on 5/31/2016.
If you are purchasing an off-exchange ACA compliant plan outside open enrollment, you are required to provide the new insurance company with "The letter from your COBRA administrator or prior carrier with the date your coverage ended and the reason why" within the time period specified. The state and federal exchanges are required to collect the same document for on-exchange plans.

Voluntarily ending COBRA early does not create a Special Enrollment Period (SEP). You can voluntarily end COBRA during the ACA annual open enrollment period and start an ACA compliant plan in January. Everyone I know has done this to avoid having to meet two separate deductibles during the year.
__________________
MBSC is offline   Reply With Quote
Old 04-26-2016, 09:36 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,387
Yeah, I guess that wouldn't work.

I wonder if the OP could talk with the former employer about extending COBRA (not sure if they can or not) to 6/30/16 (no gap) or to 1/10/17 (OP can use open enrollment).

In any event, Congress should put a fix in place where someone can purchase an ACA policy that begins the first day of the month that their COBRA coverage expires if their COBRA coverage ends on a day other than the end of a month. That "should" be simple.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 04-26-2016, 10:52 AM   #15
Recycles dryer sheets
 
Join Date: Aug 2014
Posts: 413
Don't forget to cancel your short-term policy on the day your ACA policy starts. You should get a refund for the unused days. That is what we did last year.
__________________

__________________
CRLLS is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Keep my individual health insurance even though I have employer health? bikeknit Health and Early Retirement 17 05-08-2011 12:30 PM
COBRA and Individual Medical Insurance Corporate ORphan Health and Early Retirement 25 10-31-2010 11:05 AM
To COBRA or not to COBRA~ mickeyd Health and Early Retirement 1 09-04-2009 09:22 PM
Skip the COBRA and go individual insurance right away? Buckeye Health and Early Retirement 22 07-02-2009 06:39 PM

 

 
All times are GMT -6. The time now is 08:25 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.