COBRA questions

[camfused]

Hi. My wife will be retiring the end of this year (yea!). We have 2-3.5 years of health insurance to worry about until Medicare kicks in. Due to the ACA uncertainty, we might just go with her COBRA for 2021, and see what happens with ACA. Daughter turns 26 in April, and is currently under wife's insurance.

So, the questions:
1) If daughter gets on COBRA with us, what happens in April, if anything (will daughter get kicked off, due to ACA rules)?
2) If daughter gets kicked off, would that affect wife and I?
3) If ACA survives, can we switch from COBRA to ACA, say in the summer (after the SCOTUS ruling), or do we have to wait until the end of the year (the next ACA enrollment)?

Thanks. We would ask her HR people these questions, but a) they ain't too swift, and b) they are swamped with all the declared retirees.

 

[erkevin]

In regards to number 4, losing your COBRA coverage is a Qualifying Event which makes you eligible to enroll in an ACA plan immediately (don't have to wait until Open Enrollment).

 

[Aerides]

1 - daughter can stay for now but research the ACA rule - there is an age-based expiry which i think is 26. Remember the ACA law doesn't just cover ACA plans, but touched other aspects of the health insurance law, so it's ACA that's allowing your daughter to be on her plan this long already.

2/3 - if 26 is the "too old" age, then that's a question for your plan provider as to exactly how they'd handle, including billing, or if you'd need to pick a different plan to start. If it is, it probably makes more sense for daughter to start her own plan in this coming enrollment period for Jan 2021. (imo) I'd imagine most providers have this event as something they handle regularly. Not your HR guys, but, like, Blue Cross, etc.

4 - No. Once you are on Cobra you cannot go "ehhh, I think I'll swap onto the ACA in June" - annual enrollment only, self-dropping cobra does not qualify as a change to open up mid-year enrollment. But if Cobra carries into 2022, and ends say in May of 22, when it ends, you can then join the ACA. Or you can go off it starting in Jan2022 via the end-of-year enrollment in Nov21.

 

[erkevin]

Aerides is correct in that if you choose to drop COBRA you cannot switch to ACA. I read it as "COBRA ends".

 

[EastWest Gal]

Also check your company's rules, regarding kicking your DD off the COBRA plan. Most of the time, the COBRA rules are the same as the rules of your company's insurance. My company allowed the offspring to stay on the insurance throughout the year that they turn 26. He got on his own ACA plan at the end of the year, and pays a premium of about $100/month. HI is much cheaper when you're young anyway.

Find out your COBRA costs, and your daughter should research the cost of HI for herself with and without the ACA. Look at the ACA for yourself and your family. Also look at the cost without subsidy. That will be close to the expense we will all have to face if the ACA goes away. Best to be prepared.

 

[camfused]

^^^^ Will try to find out. Unfortunately, daughter makes too little for ACA subsidy, and has too much assets for Medicaid, so she will have to pay the full amount for ACA plans. Cheapest here is $167/month for catastrophic coverage.

 

[Aerides]

^^^^ Will try to find out. Unfortunately, daughter makes too little for ACA subsidy, and has too much assets for Medicaid, so she will have to pay the full amount for ACA plans. Cheapest here is $167/month for catastrophic coverage.

Have you checked out on HealthSherpa? If you are in a state that did not expand medicaid, and she is making "too little" for the aca subsidy...she may actually be making too little to even enroll in an ACA plan. There is a gap in some states where one cannot get in medicaid or the aca - not just a matter of subsidy but program eligibility.

I believe the rules are all income based, not asset based.

 

[ivinsfan]

^^^^ Will try to find out. Unfortunately, daughter makes too little for ACA subsidy, and has too much assets for Medicaid, so she will have to pay the full amount for ACA plans. Cheapest here is $167/month for catastrophic coverage.

Too many assets for Medicaid, it was my understanding that assets are not counted for HI on Medicaid......

 

[fh2000]

1 - daughter can stay for now but research the ACA rule - there is an age-based expiry which i think is 26. Remember the ACA law doesn't just cover ACA plans, but touched other aspects of the health insurance law, so it's ACA that's allowing your daughter to be on her plan this long already.

Some states have different age requirements. New York, for example, allow children to stay on with parent's insurance until 29. Please do your own research.

 

[camfused]

Have you checked out on HealthSherpa?

I have looked at healthcare.gov. We are in NC, a non-expanded Medicaid state. According to it, she does not qualify for Medicaid, or for the ACA subsidy, but can get ACA, full price.

 

[ivinsfan]

I have looked at healthcare.gov. We are in NC, a non-expanded Medicaid state. According to it, she does not qualify for Medicaid, or for the ACA subsidy, but can get ACA, full price.

Anyway at all she can earn a little more income?

It would be estimated income for 21...

 

[MBSC]

..she may actually be making too little to even enroll in an ACA plan. There is a gap in some states where one cannot get in medicaid or the aca - not just a matter of subsidy but program eligibility.

Not true. People in non-expansion states with income below 100% FPL *can* enroll in ACA Marketplace plans. They pay 100% of the premium with no subsidy as the OP correctly stated in the post below.

Unfortunately, daughter makes too little for ACA subsidy, and has too much assets for Medicaid, so she will have to pay the full amount for ACA plans. Cheapest here is $167/month for catastrophic coverage.

********************

1) If daughter gets on COBRA with us, what happens in April, if anything (will daughter get kicked off, due to ACA rules)?

COBRA has a "second qualifying event" rule. Aging out of COBRA at 26 triggers the second qualifying event allowing them to stay on COBRA longer, for a total of 36 months. The COBRA administrator must be notified in advance of the second event.

Second Qualifying Event -If you are receiving an 18-month maximum period of continuation coverage, you may become entitled to an 18-month extension (giving a total maximum period of 36 months of continuation coverage) if you experience a second qualifying event that is...a loss of dependent child status under the plan. If a second qualifying event occurs, you will need to notify the plan.

Reference: https://www.dol.gov/sites/dolgov/fi...bra-continuation-health-coverage-consumer.pdf

How to Administer COBRA for the Age 26 Rule: When children turn 26, they age out of their parent’s plan. This type of coverage loss counts as a qualifying event under COBRA, and children are eligible for 36 months of continuation coverage.

Reference: https://www.travisoft.com/blog/how-to-administer-cobra-for-the-age-26-rule/

Multiple Qualifying Events while Covered by COBRA

Your dependents may extend their coverage to 36 months from the date of the first Qualifying Event, if, during an 18-month period of COBRA Continuation Coverage, a second Qualifying Event occurs due to:

...your dependent ceases to be a dependent child under the Plan.

For example, assume Jack loses his job (the first COBRA Qualifying Event), and enrolls himself and his covered eligible dependents in COBRA coverage. Three months after his COBRA coverage begins, his child turns 26 years old and is no longer eligible for Plan coverage. This is a second Qualifying Event. Although Jack’s coverage is limited to 18 months, Jack’s child can continue COBRA coverage for 33 months, for a total of 36 months of COBRA coverage.

Reference: https://welfarespd.ewtf.org/how-ewtf-plan-works/cobra-continuation-coverage

 

[Aerides]

Not true. People in non-expansion states with income below 100% FPL *can* enroll in ACA Marketplace plans. They pay 100% of the premium with no subsidy as the OP correctly stated in the post below.

Thanks. I had always read it as non-aca eligible if one fell below the aca-minimum - and - lived in a non-medicaid-expanded state. The rhetoric I've seen describes this as a group that is left un-covered.