I stand corrected
August 11, 2009
On the matter of delaying my COBRA coverage: I knew there was a reason I kept all the paperwork!
It turns out that I was just delaying the inevitable. According to page 7 of my rather fat stack of papers here, I am NOT (and I assume that includes you, Funny) exempt from making the retroactive payments on these intervening months since leaving my former place of employ.
As they say …
This initial payment premium is for the retroactive coverage period from the date of loss of coverage to the date you elect continuation coverage.
That’s disappointing.
Eeeeek!
So… You have a period in which to decide to start COBRA, if I recall correctly. But if you decide to hold off on collecting (because, say, you have enough cash to cover a couple months of routine medical bills, for example…or because you just bloody can’t afford COBRA and hope you’ll get a job before long), then they gouge you for payments when you were NOT covered?
That is annoying.
I also just figured out that…get this one! You know how you can sometimes use accrued vacation time to extend your termination date, thereby keeping you on the company’s health insurance for a few weeks past the official out-the-door day? Well…
The discounted COBRA is available to poor schleps who are canned before December 31. If you’re laid off around then and elect to use your vacation days in that manner, what it will do is delay your termination date into 2010, thereby rendering you ineligible for the COBRA discount.
So, if a person know she or he is about to be canned and has get a chance to think it through, apparently the best advice is DON’T accept a deal where your vacation accrual keeps you on the payroll until after December 31! Ask for the money; if you’ve accrued more than they’ll pay you for, take the vacation days up to the 30th and then let them can you on that date. Better to lose vacation days than to have to pay COBRA’s full freight.
FAM: Yes ma’am, you have the first 60 days to make your decision. If you send in your paperwork during that 60 day period, then you have another 45 days to make your first payment WHICH INCLUDES retroactive payments for the first 60 days.
Good gravy, you’re right. Better to be paid out early if you’re going to have to pay the full COBRA amount when you’ve limited means … how sad is that? I’m glad you figured that out considering your out-the-door date is right around that timeframe.