What is COBRA insurance?
COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, a federal law that could allow a temporary extension of the health insurance you had while working — same coverage, but you pay the employer’s share of the premiums as well as your own. Because COBRA does not count as insurance from active employment, you will not be protected from delayed coverage and late penalties if you wait to enroll in Medicare later than you should.
This group coverage via COBRA usually lasts up to 18 months, although it could be extended to 36 months due to certain circumstances. Typically COBRA insurance rules apply to companies with 20 or more employees. In some states, COBRA insurance rules apply to smaller companies.
How do you qualify for COBRA?
You may qualify for COBRA if you lost your job. You usually have to apply for COBRA within 60 days from when your employer-based coverage ended, or the day you received notice of your employment ending, whichever is later. If your spouse or ex-spouse was covered by an employer’s group health plan, you might be covered if he or she:
- Lost his or her job
- Became entitled to Medicare
Regardless of how many months of COBRA coverage you’re offered — if you’re retiring before or at age 65, you should sign up for Medicare during your seven-month initial enrollment period (IEP), which expires three months after the month in which you turn 65. Or, if you delay Medicare enrollment beyond age 65 because you have health coverage from a current employer (your own or your spouse’s), you should enroll no later than eight months after the employment ends, when your special enrollment period expires.
Can you have COBRA as well as Medicare?
That depends on when you become entitled to Medicare:
- If your Medicare benefits (Part A or Part B) become effective on or before the day you elect COBRA coverage, you can continue COBRA coverage as well as having Medicare. This is true even if your Part A benefits begin before you elect COBRA but you don’t sign up for Part B until later. In this situation, Medicare is always primary to COBRA coverage.
- If you become entitled to Medicare after you’ve signed up for COBRA, your COBRA benefits cease. (But if COBRA covers your spouse and/or dependent children, their coverage may be extended for up to 36 months because you qualified for Medicare.)
Annual Enrollment runs from October 15th thru December 7th.
Do not become complacent with your current plan or you may be overpaying or leaving benefits on the table that other plans are offering.
If you have questions or are confused about which company is best for you, book a meeting with an agent. The goal is to lower your potential cost as low as possible while still receiving great medical care when you need it.
Please share us with your friends, family or neighbors. A referral is the greatest complement we can receive.