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Switching from COBRA to ACA/Covered CA
Old 11-11-2021, 06:58 PM   #1
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Switching from COBRA to ACA/Covered CA

I retired in June 2021 at age 55 and continued with health insurance for my family (wife and 2 kids) via COBRA. I've started to work with an insurance agent to assist with enrolling in Covered California effective Jan 2022. We have been satisfied and will continue to get health care through Kaiser as a family. My daughter will turn 19 in late Jan 2022 so my agent is advising us to continue with COBRA until Feb 2022 so she will not be required to go through Medi-Cal as an 18 year old. We'd like to continue for all of us to be covered through Kaiser. My current plan is to terminate COBRA effective Jan 31, 2022 and begin coverage through Covered California on Feb 1, 2022. My question is ... am I allowed to begin coverage outside of the open enrollment period? My insurance agent says that simply "losing coverage" (even though it's self-initiated) is enough to enroll outside the open enrollment period. Any insight on this matter would be greatly appreciated. Thank you!
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Old 11-11-2021, 10:22 PM   #2
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If you drop Cobra you should be able to start the ACA plan the next month, but I don’t know if you can drop Cobra once you’ve started it. I started through the ACA when my Cobra ran out, in December 2020. Check into the rules on that.

As an aside, one of the main benefits of the ACA is that it guaranteed that one’s children can remain on their parents’ insurance to age 26, whether it is through an employer or the ACA or private insurance off the plan. Your daughter doesn’t need to go on Medicaid. She does not need to be your dependent for tax purposes either to be your dependent for health insurance. I have first hand experience with this as a parent and as a physician who took care of newborns. The hospital helped such women sign up their newborn for Medicaid while they were still in the hospital.
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Old 11-11-2021, 11:28 PM   #3
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I'm curious-is it less expensive for you to get coverage through the ACA than COBRA? We are also in California. My thinking was that we would probably continue on COBRA for 36 months, then switch to ACA.
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Old 11-12-2021, 12:28 AM   #4
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Originally Posted by Scratchy View Post
I'm curious-is it less expensive for you to get coverage through the ACA than COBRA? We are also in California. My thinking was that we would probably continue on COBRA for 36 months, then switch to ACA.
COBRA coverage is generally for 18 months, not 36, although it can be extended in certain situations. California residents may also be eligible for 18 months of CalCOBRA coverage after regular COBRA eligibility ends.

With subsidies due to a much reduced income, my ACA 2022 coverage for a Silver Blue Shield plan through Covered California will be several hundred dollars a month less expensive than the COBRA premiums for my working life Cigna Plan. Kaiser is several hundred dollars less than Blue Shield. But, you’ll need to look at the specifics of the costs for your employer’s plan.

One additional consideration is to compare the insurance carriers’ drug formularies. Your employer’s plan may be better. Unfortunately, I discovered after the fact that one of my prescriptions isn’t covered by Blue Shield but was covered under my former employer’s plan, subject to a modest co-pay.
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Old 11-12-2021, 05:35 AM   #5
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California may have some special rules, but I was under the impression that...

when COBRA ends, that is a qualifying life event and makes you eligible for ACA signup. Even outside open enrollment.

But, If you intentionally cancel COBRA before it ends, then that is not a qualifying life event for COBRA.

I could be wrong. But that was my understanding.
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Old 11-12-2021, 06:03 AM   #6
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You can drop Cobra at the year end, just like anyone, to swap insurance and go on the ACA now as part of Open Enrollment (by 12/15). So you would end your cobra on 12/31 and be on the ACA on 1/1.

Normally, you cannot do as you suggest, and elect to drop cobra in the middle of the year, and then go on the ACA in Feb. Anything outside of the YE period is not an option. Deciding to drop Cobra by yourself is not a change-event that qualifies for ACA enrollment.

Now, there is one wrinkle that might apply to you: Is your daughter no longer a dependent (at all, not on your taxes) as of Feb? If so, if she's no longer a member of the household and isn't a dependent on your taxes anymore, then that's a change that should qualify. The ACA allows you to consider her a dependent until 26 (but CA is different and I'm not sure how they work).
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Old 11-12-2021, 07:01 AM   #7
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My cobra ended 7/31 and I was able to get on an exchange plan effective 8/1 this year

Just make sure you keep a copy of your COBRA exhaustion letter

I agree with the above posters that voluntarily dropping COBRA may not be a qualifying event - you may want to talk to your state health department
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Old 11-12-2021, 10:14 AM   #8
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Here's the Covered CA page on COBRA: https://www.coveredca.com/support/before-you-buy/cobra/

I think you should point out the section below to your agent and ask if she still thinks that voluntary termination of COBRA would allow you to enroll in Covered CA. It seems pretty clear to me that it doesn't.

Quote:
If you enroll in COBRA coverage and the special-enrollment period described above lapses, you cannot cancel your COBRA coverage and enroll in a Covered California health plan until 1) your COBRA coverage is exhausted, 2) you have a different qualifying life event for special enrollment, or 3) the next annual open-enrollment period.

If you stop paying your COBRA premium and lose coverage (or if your employer has agreed to pay for a limited time and you do not continue the payments), you will not be eligible for special enrollment through Covered California. You will only qualify for special enrollment if:
  1. Someone else responsible for sending your COBRA premium payments (for example, your former employer) fails to do so on a timely basis.
  2. You move out of the plan coverage area, and there is no COBRA continuation coverage available.
  3. You reach the plan’s lifetime limit for benefits.
If none of these reasons apply, you will have to wait until the next Covered California open-enrollment period to cancel your COBRA plan and sign up for a Covered California health insurance plan, unless you have another reason (known as a qualifying life event) for special enrollment. It’s also important to know that if you decide to drop or forgo COBRA and enroll in a Covered California plan, you cannot change your mind and go back to COBRA.
I'm also confused about why your daughter turning 19 would change anything in her health coverage. As far as I know, Medi-Cal goes up to age 26 now. Is she your tax dependent and a member of your household?

edit: Yes, here's the official info on Medi-Cal's expansion to age 26 as of 1/1/2020. https://www.dhcs.ca.gov/services/med...gadultexp.aspx
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Old 11-12-2021, 10:26 AM   #9
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You can call your county social services department and talk to a Medi-Cal eligibility worker. They will know more about Medi-Cal and what would trigger your daughter being eligible more so than the other person.
They can also help with signing up for ACA.
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Old 11-12-2021, 11:35 AM   #10
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Originally Posted by cathy63 View Post
I think you should point out the section below to your agent and ask if she still thinks that voluntary termination of COBRA would allow you to enroll in Covered CA. It seems pretty clear to me that it doesn't.
]

I voluntarily terminated COBRA after 12 months and was able to enroll in Covered California the following month.
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Old 11-12-2021, 11:41 AM   #11
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I voluntarily terminated COBRA after 12 months and was able to enroll in Covered California the following month.

Was that recently? I ask because California has had a special enrollment period due to Covid.
I’m not sure that will continue past the official end of open enrollment.
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Old 11-12-2021, 12:35 PM   #12
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Originally Posted by Irishgirlyc58 View Post
Was that recently? I ask because California has had a special enrollment period due to Covid.
I’m not sure that will continue past the official end of open enrollment.
Oh, that reminds me! Covered CA recently announced that open enrollment will now go to January 31 of the subsequent year. So perhaps OP's agent is saying that he can drop COBRA in January because he will still be in the open enrollment window at that time. By doing that, he wouldn't need a qualifying life event to get coverage starting on February 1, 2022. This strategy wouldn't work if he wanted coverage to start later in the year though.

I still don't see how this affects whether the 18/19 yr old daughter is on Medi-Cal or not though.
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Old 11-12-2021, 01:21 PM   #13
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Could it be because of their stated low income which they could increase with a Roth conversion?
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Old 11-12-2021, 01:32 PM   #14
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Originally Posted by cathy63 View Post
Oh, that reminds me! Covered CA recently announced that open enrollment will now go to January 31 of the subsequent year. So perhaps OP's agent is saying that he can drop COBRA in January because he will still be in the open enrollment window at that time. By doing that, he wouldn't need a qualifying life event to get coverage starting on February 1, 2022. This strategy wouldn't work if he wanted coverage to start later in the year though.

I still don't see how this affects whether the 18/19 yr old daughter is on Medi-Cal or not though.

It doesn’t affect who is in the household.
If the daughter is independent and files her own taxes claiming herself then she is a household of 1.
But again, I would call the county social services office and give them the exact details. They have the best information on Medi-Cal eligibility.
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Old 11-12-2021, 02:28 PM   #15
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I understand why your agent is suggesting you avoid the mediCAL thing. One way to avoid that is that when you estimate your income - you estimate *high* - which reduces subsidies during the year, but avoids the mediCAL issue.

I fought the mediCAL thing the first 2 years on ACA - even with an income of $90k for a family of 4 they wanted to put the kids on mediCAL. We were in limbo each year while I went through the confirmation with mediCAL that, no, we don't qualify. (At the time the ACA cliff was 96k for a family of 4... so there is no way we should have qualified.)

The third year I'd learned my lesson - I put down an estimated income that assumed IRA withdrawals (more income)... Then at tax time, when I hadn't taken the withdrawals, I got back the premium tax credits that matched the *actual* income.

My older son is now independent living in another city... He is on his own insurance through the ACA and we faced the same issue. The sweet spot, per our agent friend, was for him to be above $17100. That's close to what he makes - we just made sure the supporting document was a big one. Fortunately, it turns out he has been working more hours and the stated income is pretty accurate.

The two years that I was spending large amounts of time trying to convince the local county mediCAL folks that our income was too high was painful. The people were nice - agreeing that our income was too high but for some reason we triggered this forced mediCAL coverage for the kids. They said that California state had an intent to make sure all kids have coverage.
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Old 11-12-2021, 02:35 PM   #16
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Originally Posted by Scratchy View Post
I'm curious-is it less expensive for you to get coverage through the ACA than COBRA? We are also in California. My thinking was that we would probably continue on COBRA for 36 months, then switch to ACA.
That is entirely dependent on the negotiated rates of your employer plan. If you worked for a very large employer you probably get a good deal with COBRA. Especially if you do not qualify for premium tax credits.

For us - I retired mid year and did COBRA to finish out the year since I had too much income that year with all the paid out PTO, etc.. I switched medical to ACA in the new year, but kept COBRA Dental since it beat any private insurance. Now we pay out of pocket for dental since we haven't found a dental plan that makes financial sense when you look at premiums, limits, copays, dollar caps, etc.
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Old 11-12-2021, 03:01 PM   #17
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Originally Posted by Irishgirlyc58 View Post
Was that recently? I ask because California has had a special enrollment period due to Covid.
I’m not sure that will continue past the official end of open enrollment.
I was on Cobra 1/1/2019 to 12/31/2019, and enrolled in Covered CA beginning 1/1/2020.
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Old 11-12-2021, 03:02 PM   #18
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I was on Cobra 1/1/2019 to 12/31/2019, and enrolled in Covered CA beginning 1/1/2020.

Ah. That was still an open enrollment period in California.
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Old 11-13-2021, 12:41 AM   #19
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Thanks to everybody for replying to my post. I love this forum!

As cathy63 mentioned, I found the press release that mentions the open enrollment period for 2022 goes through Jan 31, 2022. This is good news considering I want to transition from COBRA to Covered California effective Feb. 1 since my daughter turns 19 on Jan. 27 and we want to keep her on our Kaiser family plan rather than using Medi-Cal. Concurrently, I 'm working with my financial adviser to determine an appropriate 2022 annual income (primarily from dividends) to determine the specific health plan we'll be able to use. I will follow up with my insurance agent regarding the specific timing for submitting the Covered California application.

Regarding the original question, cathy63 pointed out that simply ending COBRA prior to the ending of it's max duration is not a valid life event to join Covered California outside of the open enrollment period. I agree with her comment and the supporting article. According to my insurance agent, though, the ACA application simply asks if you've "lost coverage" and does not ask for any explanation. Thus, it seems this is just another loophole that my agent has taken advantage of in the past in order to begin ACA coverage outside of the open enrollment period.
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Old 11-13-2021, 05:40 AM   #20
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According to my insurance agent, though, the ACA application simply asks if you've "lost coverage" and does not ask for any explanation. Thus, it seems this is just another loophole that my agent has taken advantage of in the past in order to begin ACA coverage outside of the open enrollment period.
I would not call it a loophole, but a bad faith interpretation by your agent. And your insurance agent should be aware that you may be required to submit supporting documentation:

https://www.healthcare.gov/help/prove-coverage-loss/

"Documents must show that you lost qualifying health coverage in the past 60 days or will lose coverage in the next 60 days. These documents must include your name and the date of coverage loss. Documents you can submit:

A letter about COBRA coverage, like a letter from an employer or health insurance company that confirms these:
Your employer’s offer of COBRA coverage along with the date this coverage would start.
Your COBRA coverage ended or will end, or your employer stopped or will stop contributing to the cost of coverage and when."
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