Help…I Lost my Job…Should I Take COBRA or an Individual Policy?
COBRA is a federal law that requires employers of 20 or more employees with group health plans to offer employees, their spouse and dependents a temporary period of continued health care coverage if they lose coverage through the employer’s group health plan. Employers who have not continuously had 20 employees are covered if they had at least 20 employees on more than 50% of the typical business day in the previous calendar year. Both full-time and part-time employees are counted to determine whether the plan is subject to COBRA.
Individuals are not obligated to participate in COBRA after leaving an employer or having a reduction in hours. However, if an individual declines the initial offer of COBRA, he/she may qualify for “special enrollment” in Covered California health insurance or an “off-exchange plan” outside of the annual Open Enrollment period for Individual/Family coverage. An “off-exchange plan” are plans that are offered by the carrier direct, rather than through Covered California. In order t take advantage of the special enrollment in Covered California or “off-exchange plan,” the individual/family losing group coverage must apply for coverage no later than 60 days after their employer-sponsored plan ends. It is also important to note that if an individual were to terminate their COBRA coverage during Open Enrollment of Covered California or elect an off-exchange plan, he/she cannot change their mind to go back to COBRA.
If an individual were to elect COBRA and loses his/her coverage (i.e. due to non-payment), he/she will NOT be eligible for special enrollment through Covered California, nor opt to an off-exchange individual plan at that time. Outside of Open Enrollment, individuals qualify for special enrollment with Covered California or off-exchange individual plans if one of the following apply:
- If former employer was responsible for remitting payments for the COBRA premium and fails to do so in a timely manner, therefore participant is cancelled due to group non-payment;
- The COBRA participant moves out of the plan coverage area and there is not another option available (i.e. former employer offers HMO only plan and COBRA participant moves out of state and the HMO would no longer be a good option);
- If the former employer cancels the group plan, therefore, COBRA is no longer available; or
- The beneficiary has maximized their COBRA duration available under the plan.
Listed below are pros and cons of Electing COBRA vs. Enrolling in Covered California after an individual and qualified beneficiaries have had a qualifying event.
|ENROLLING IN COVERED CALIFORNIA OR “OFF EXCHANGE PLANS” WITH THE CARRIER||
Note: If you have a qualifying event, your spouse has other group coverage offered through his/her employer, you may also want to explore adding onto their group plan as an additional alternative. If this is an option through his/her employer, it must be done within 30 days of the loss of coverage.
If you have questions regarding your personal situation, MNJ Insurance Solutions are able to assist and can be reached at (714) 716-4303.
COBRA vs. Exchange Coverage – Covered CA
Disclaimer: The views and opinions expressed are those of the author and do not necessarily reflect the official policy or position of Covered California. Any content provided by our bloggers or author is of their opinion and are not intended to malign any organization, company, government entity, anyone or anything.
This document is for general information only. While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy or completeness. The information provided should not be construed as legal or tax advice or as a recommendation of any kind. External users should seek professional advice from their own attorneys and tax advisors with respect to their individual circumstances.