Health · Money & Careers

Medical Monday Alert! Don’t Let These Changes in COBRA Put You in Financial Peril!

Maura Carley

Maura Carley


Women’s Voices recently found this important post on the blog of Maura Carley, President and CEO of Healthcare Navigation, LLC, a healthcare consulting firm. Maura has written several posts for us on health-insurance issues. At Women’s Voices we republish articles only rarely. But we had to publish this post, for nobody could explain this issue better. —Ed.



COBRA, the law that regulates employees’ health insurance when they voluntarily or involuntarily lose their jobs, is an important protection.  COBRA is the temporary extension of group coverage at one’s own expense when a person loses or leaves his/her job, or when a dependent “ages off” a parent’s group coverage, or when coverage is lost through the divorce or death of a spouse or other life event.

Until March 31, 2014, anyone electing COBRA could voluntarily terminate COBRA whenever he chose to and apply for individual coverage.  THIS IS NO LONGER TRUE.

Now, one can decide to buy individual coverage only during the annual open enrollment period (which begins November 15, 2014, for a January 1, 2015 effective date) and terminate COBRA to coincide with the starting date of the new individual coverage. But there is no special period provided for terminating COBRA outside the annual enrollment period, which this year runs from November 15 through February 15, 2015. Outside of those dates, only exhausting COBRA benefits will create a special enrollment opportunity.

What Are the Implications of This Change for Those Considering Electing COBRA?

You had better be sure the COBRA coverage is what you want, because otherwise you will be stuck with it until the next annual enrollment period, which this year begins November 15.  Losing your job, getting divorced, or having your spouse die are qualifying events that will allow you to buy coverage in the individual market off-cycle before electing COBRA.  But, again, once you elect COBRA you cannot buy other individual coverage EXCEPT during the annual open-enrollment period.

Which is Better—COBRA or Individual Coverage?

Which is better depends entirely on your circumstances and priorities.  COBRA coverage and rates vary widely.  We’ve seen COBRA premiums range from under $400 a month to more than $1,200 a month.  Of course, more-expensive plans are typically associated with more-comprehensive coverage.

Individual policy premiums can vary widely too.  For 2014 in New York, where premiums are NOT age-rated, individual premiums were under $400 a month for some Empire plans and close to $1,000 a month for Oxford/United Healthcare’s richest platinum plan.

How Should the Choice Be Made?

Get the facts or retain someone who will help you.  The problem is that many people who’ve enjoyed good group coverage their entire lives have no idea how to compare plans or shop for insurance and are shocked at how much coverage costs.  If resources are not a consideration, you can always elect COBRA if you’re certain that the coverage is adequate. But COBRA is by definition temporary, so you should always have a plan regarding what coverage follows COBRA.

For entire groups of people, electing COBRA may be a foolish decision.  In all but a handful of states, individual premiums are based on age, and 26-year-olds aging off a parent’s plan will likely pay more for COBRA than for comparable coverage in the individual market.  Twenty-six-year-olds who are unemployed or underemployed may qualify for subsidized coverage as a result of the Affordable Care Act and pay a fraction of what they would have paid for COBRA.

Each situation should be evaluated based on the local options and the individual’s circumstances.


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