Frickin' COBRA! Need advice, possibly some TMI

In My Humble Opinion
1

There’s a Pit thread in all of this, but I’m waiting to write it.

Here’s the sitch: back in the beginning of May, I was laid off from my full-time job at CompUSA, handed a severance check, and given the documentation for COBRA. As with all health insurance issues, the paperwork was complicated, abstruse, and occult.

Payment for each month’s benefits was due the first of that month with a grace period that extended until the fifth of the next month. Yay. Trouble was, the administration company wouldn’t take credit card payment, but only check. I’m living off of unemployment and a part-time summer school job until my full time teaching position picks up late this month, so money is tight.

I received a statement on either July 30th or 31st, and knowing I would pay the premium for July over the phone on August 3rd, I didn’t bother opening the statement.

I should have. Because in the statement, the grace period now ended the 31st. Period. End of story. I didn’t discover this until Friday night when I went to make the payment and paying over the phone, by check, was no longer a possibility. To cover my bases, I mailed the payment in on Saturday, and today I called customer service.

To make a long story short (too late), the payment will not be accepted. My account is in the process of being closed, and the only way to keep it open is to write a letter of appeal to the administration company that will take two to four weeks to process, with no guarantee that I’ll actually get to keep my coverage.

I will have health insurance from my teaching job, but it probably won’t kick in until September at the earliest, and it has a high deductible. Very high. Also, I have a doctor’s appointment this afternoon for a PAP smear, because I had an irregular PAP smear back in February and I have to follow up on that. I also have several prescriptions that I’ll need to refill at the end of August, and one of them is hideously expensive.

So the question is, do I bother with the letter of appeal or do I just let my insurance lapse and save the nearly $800 in premiums? Will the lapse in insurance affect my next policy, which will be with the same insurance company, with any pre-existing conditions or other ways for my insurance to deny me coverage?

There’s no doubt in my mind that my next PAP will be fine. I had a colposcopy back in March, which was completely negative, and I’ve tested negative for HPV. So I’m not worried about suddenly having cervical cancer with no insurance. I am worried that I could get stuck with no coverage for the other health issues I deal with, or that I’ll have a huge bill for pharmaceuticals in the lapse period.

Any advice?

2

Must…resist…GI Joe…reference.

3

Ugh. Unfortunately, it looks like they are well within their rights. It looks like COBRA gives you a 30 day grace period (all of July). It may be that, due to the July 4th holiday, they extended the June grace period and you extrapolated that to all months?

You might make an argument that sending you the final bill on the 30th of July didn’t leave you enough time to pay up, but it sounds like they’ve already decided to be inflexible about the whole thing.

4

I think you may be on to something. One thing that makes this much harder to deal with is that I am perennially disorganized. Now, I’m better than I used to be. I’m pretty darn sure I kept the initial paperwork. I think I might have even filed it. Where? Uh…in a folder. That I put in a box. In the place where I live.

Stupid ADD. I have friends who don’t try to carry all the information of their lives around in their head at any one time. I don’t understand how they do it, but it must work better than my approach.

5

If this is the first month they changed the grace period, I would write the appeal letter. I have worked in benefits administration and it’s not unheard of for the people who get their ducks in a row and write strong appeal letters to get what they want. Again, if I understand correctly, someone higher up in benefits administration decided to change the grace period. Typically a change like this would come with 30 to 60 days notice. I don’t know that that’s required by any law, but springing it on customers with like a week’s notice is not typically how things are done.

The lapse in insurance coverage could indeed affect pre-existing condition clauses on the new policy. Let’s say you will have a 2 month gap and the new policy has a six month exclusion. You will have a two month gap in prior creditable coverage. If you had no gap, you’d have no pre-existing exclusions. My understanding is that with the two month gap you will have a two-month pre-existing exclusion. This is based on what’s typical but of course your actual results depend on the actual terms of the policy. Some policies don’t exclude for pre-existing at all, for example.

Again, I’d encourage you to write the appeal. The frontline reps tend to make that sound like a complete black hole, but the people who get the letters are generally empowered to make good where the company fell short.

6

Will the $800 you save in COBRA premiums cover the cost of your Rx? If not, then try the appeal, you’ve got nothing to lose.

If so, I’d cancel the pap, reschedule for when you have insurance (it’ll be billed at the rate your new insurance company allows and not as high as they possilby can b/c they know you are COBRA or worse yet, uninsured).

The money you save now, may be best applied toward that deductible you will have when your insurance kicks in.

7

This is what I need to hear. I’m fairly sure that the premiums will be smaller than the cost of the prescription medication, and I’d rather not give my doc’s office the headache of billing when all this is up in the air.

Thanks.

8

I wonder if it would help if in your appeal you state that you only need the coverage for another couple of months, and that it’s important for you to avoid the break in creditable coverage that Harriett mentioned.

Good luck!

9

Whereas I had no intention of resisting.

10

You worked at Comp USA and you can afford the COBRA payments?! :eek: :eek: :eek:

(the Cobra from my last job was something like $1500 a month if I wanted to keep it!)

11

COBRA premiums are set at the total group premium (what your employer was paying + what you were paying as an employee), plus 2% for the costs of administering COBRA. So they vary based on how expensive the coverage was at the previous employer. CompUSA probably has a large and fairly young employee pool, which would help them get lower rates. Also, as a retailer I’m guessing they don’t offer an especially great insurance plan. A small company with older employees and better coverage would have more expensive COBRA payments.

This site has solid info on COBRA http://www.dol.gov/ebsa/faqs/faq_consumer_cobra.html

And back to the OP, I noticed this on linked page " Premiums for successive periods of coverage are due on the date stated in the plan with a minimum 30-day grace period for payments." Was this grace period already factored into your calculation of payment due dates? If not, cite it in your appeal.

12

I’m single and young, so my previous monthly insurance premiums were just under $200 a month. Affordable considering some of the health problems I deal with - depression, ADD, migraines, and such. I did not work in the stores, thank heavens, but in the corporate tower in IT, which meant a living, if not great, wage. At the time of the layoffs, I was actually working two jobs - a part time teaching job in the morning, and full time tech support in the evening.

13

I’d be happy to answer your question, but the OP has left me a little confused. Were you making your July payment or your August payment? If August, you’re golden, if July…you may have a problem. In any event, if you are going on to employer provided coverage, you’re fine. The law says they have to cover you, no matter how bad your health is. If you’re going onto an individual plan, you still should be OK because you’re HIPAA eligible(you can not be turned down for health reasons) for 62 days after your last policy lapses. HIPAA policies have their own problems however…

14

July payment. I’d counted on the grace period ending the fifth, like in the previous month. Money’s a bit tight just now, though it’s soon to get better.

The 62-day thing is good to know. Now I only have to fuss about prescription costs.