Confronting COBRA

No, I didn’t recently cross paths with a snake. Though I can understand if you find cobras preferable to insurance paperwork. I for one will be taking my chances with the benefits administrators over snakes. Currently, I am without medical insurance.

The COBRA here is the Consolidated Omnibus Budget Reconciliation Act. COBRA allows folks who get their medical insurance through an employer to continue after employment ends. I quit my job a few weeks ago to take a new one that starts next week.

Group health plans

If you've yet to encounter COBRA, it is a US Federal Law that requires "group health plans to provide a temporary continuation of group health coverage that otherwise might be terminated."1 There are many details that change depending on the size of the employer and what state you live in. Other options include obtaining insurance through a spouse's plan or the health insurance marketplace.

The bite of COBRA is that is often expensive, "since the employer usually pays part of the cost of employees' coverage and all of that cost can be charged to individuals receiving continuation coverage".1 I will likely elect COBRA over the marketplace plans available to me. I'm already well into my deductible for the year. COBRA premiums, while a sizable chunk of change, are cheaper than my Marketplace options.

Understanding benefits on your last day of employment

All of my benefits through my former employer ended my last day of employment. This information would've been available to me before I gave notice by contacting Human Resources or reading my benefits booklet. Your employer may do the same and end your benefits on termination or it may be some other date. I had all my ducks in a row before I quit so knowing the exact policy was not important to me.

In my case, I had the advantage of quitting not being fired or laid off. This gave me the opportunity to refill all my medications and get some appointments in ahead of quitting and losing coverage. I have a stockpile of medication that should last me several months. In my heart, I knew it was time to move on to a new job well before I found that job.

I have been preparing in a variety of areas of my life. My stockpile is more medication on hand than I normally would keep on hand. Thus it is not urgent to get a new script if my medication isn't on the formulary. I also have set aside savings to cover COBRA medical premiums until my new insurance kicks in.

New coverage

A good thing about the job offer I accepted is that the benefits will kick in the first day of the month after I start. This meant that I have a gap of just a few weeks between quitting my job and getting coverage with the new gap. I’m very thankful that I likely won’t have to deal with the paperwork and expense of extending my coverage on my former employer’s plan. COBRA paperwork seems nearly as daunting as staring down a cobra snake. I, of course, will put on a kettle of tea and break out some chocolate to deal with it.

Have you dealt with COBRA or other mid-year insurance plan swaps? Did it make you wish you were entering a cobra’s den instead?


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