It looks like I’m moving to a new job at the end of November, unless my current employer can talk me into staying with them. Because health insurance in this country is tied to your job (which is weird to me because I’m Canadian and this system is still very hard for me to navigate and I don’t know how you people manage it) I’m going to have a period of about three weeks between leaving this job and having the health insurance kick in for the new one.
I know there’s this COBRA thing, which, if I understand it properly, is a way for me to continue with my current health insurance by paying both my part and my employer’s part of the premiums - I went to HR and they explained it to me and it looks like it will cost me approximately $700 for a month and will be exactly the same insurance I already have.
That is a *lot *of money for me, and I’d like to avoid it if possible, but I’m also scared about leaving myself with no insurance at all - what if I’m in an accident?
The HR woman who spoke to me said that I have 60 days after termination of my coverage here to sign on for COBRA coverage, and since I’m starting the new job 23 days after leaving, I’m comfortably within that window. What she recommended was to wait and see if I need it, *then *sign up for it. If I’m healthy and all is well, just wait for the new job’s benefits to kick in. If something bad happens to me, I can pull out my COBRA papers and sign up, and the coverage will be retroactive back to the day I quit.
Is that even legal? I thought you couldn’t sign up for insurance *after *you get sick.
Off the top of my head it sounds right. IIRC a few years back I enrolled the dependent of an employee retroactively and since I never heard back about it I assume everything worked out. I believe the dependent had left his other job (with benefits) and then went to a doctor or ER and then we enrolled him retroactively they put the claim through again with the new insurance info or something along those lines. It was a few years ago and the details are fuzzy.
Also, I believe, that all this insurance stuff is law, not policy, so you should be able to find it online and set in stone. If nothing else, ask your HR person for either something in writing or a photocopy of whatever she read that out of so you have something to go back to the company with if something goes wrong.
Our insurance broker is really good about that. The last time they made a stupid mistake and told us that the insurance company they were switching us to would cover something for one of our employees and it didn’t, they (the salesperson) paid it out of her own pocket to make good on her claim.
Also, in the states, health insurance isn’t tied to having a job per se, it’s just that it’s so expensive that employers can negotiate good rates because they can bring so many people in one group to an insurance company. Also, they’ll kick in part of the premium as a benefit. But you’re more then welcome as an individual to go out and purchase your own health insurance.
Yeah it’s fine. It’s not *illegal *to buy retroactive insurance – it’s just that no company would ever offer it, because it’s a guaranteed loss. But COBRA requires them to offer it w/ the restrictions you’ve described. You’ve got 60 days to elect COBRA, so that means you’ve got 60 days to evaluate whether it’s a good deal.
The one wrinkle – if you have a pre-existing condition, you might want to get COBRA regardless. The rules of PXCs have changed and will change more as a result of the Affordable Care Act, but under the old system, your new insurer wouldn’t have to cover PXC that haven’t been continuously covered for the previous six months. So if you’ve got asthma or a psoriasis or anything chronic, even if mild, you may want to ensure you’re never without coverage. Esp. b/c if a condition is pre-exisiting, the insurer might not have to cover it even if it gets worse, and even quite a bit into the future. (Unless, again, it’s been continuously covered for six months.) This isn’t really my area, so I might be off on that stuff, but if you do have a diagnosed medical condition, it’s worth at the very least exploring that particular issue with your HR rep.
Theoretically true, but for anyone with a pre-existing condition, even one that is well controlled, there is likely no insurance company that will offer you a plan. That will change in 2014, when discrimination based on health status will become illegal.
That is pretty standard. There is a little trick to save some money. When you receive your Cobra paperwork, you do have 60 days to decide if you want it or not. So write a check for your cobra premium, attach it to your Cobra paperwork, write out an envelope put a stamp nearby. Hang it all on your refrigerator with a magnet. Should you end up in a hospital during the 23 days between coverage, make sure someone is able to get that check and paperwork and drop it in the mail.
Chances are you can go 23 days without incident, but a hospital bill could be catastrophic.
You will have peace of mind knowing it can be taken care of. Now start planning to buy yourself a small gift for saving $700/
I came up with this. It supports what your employer is saying.
So, you have sore throat, you go to the ENT, he says you have strept…you pay it out of pocket.
You have a sore throat, you go to the ENT, he says you need your tonsils out, you have them out, you call HR and have COBRA kick in either right before the surgery or right before the ENT appointment if it makes sense financially.
You glide through the whole thing unharmed…you win!
Really? So if I have asthma and I’m between insurance plans for three days, the new guys are allowed not to cover anything asthma related? Wow, that’s kind of insane.
What if I get pregnant between now and then? Is pregnancy “pre-existing”?
I used to work in the benefits industry and have used COBRA myself that way before. Believe it or not, what she told you is correct. COBRA insurance is retroactive during the grace period so you can just wait and see if you need it before you pay anything. Even if you get hurt before you sign up, you can just pay the premium and turn the claim over to insurance. They are a few reasons why it needs to work that way if you are curious why it does but you can also use it to your advantage in situations like yours with a free conscience because it isn’t cheating.
Normally in the US, your health insurance coverage will continue for the remainder of the month regardless of when your last day of employment is with your employer. So if your last day of employment is on November 4th with employer A. You would still have health insurance coverage with employer A through the end of November. So as long as you started your new job with employer B by December 1st, you would not have a lapse of coverage.
The days of the month of your termination and when you start at your new job are important.
You need to make sure then that they don’t deduct health insurance premiums from your last paycheck then, as those premiums should be for future coverage.
This isn’t quite true. So long as there has not been a lapse in coverage for 63 days or more, you get credit for continuous qualifying coverage.
So in this situation - if someone has asthma or some other chronic illness, the new employer must consider the previous coverage including the gap of 23 days (up to a max of 62 days). If the previous coverage was in place 6 months or longer (including the gap in coverage), no illness may be subject to a preex penalty.
Also - pregnancy may never be considered a preexisting condition, not as far as employer sponsored plans a concerned. Federal Law.
What your employer is telling you is exactly correct. The smartest move financially is to do exactly that - hold on to your COBRA election materials and retro enroll if needed during that period.
Just make sure that your new employer coverage starts within that 63 day window. The 63 day clock may start ticking the day following when you quit - or it could start the first of the month following. Verify with your current employer (if you haven’t already) whether your coverage is good until the end of the month or not.
Verify with your new employer that coverage is effective the date of hire. Many employers have a waiting period, and many will not start coverage until the first of the month following your hire date or first of the month following the waiting period. But there is a catch yet again - and that you get credit towards a preex period (if any) for waiting period days.
You’re right - it’s damn complicated. I’ve been working in the US health insurance industry for over 15 years and I get confused sometimes too.
I bow to thatguyjeff’s superior knowledge, but yeah, it certainly is insane. Note that many employer sponsored plans will cover PXC even if coverage has lapsed, but that’s not required.