Shakespeare and COBRA

The quality of mercy IS strained– Pay COBRA Premiums Timely

The quality of mercy is not strain’d,
It droppeth as the gentle rain from heaven
Upon the place beneath. It is twice blest:
It blesseth him that gives and him that takes.

When Shakespeare’s Portia urged Shylock to be merciful he couldn’t have been thinking about COBRA. COBRA, the Consolidated Omnibus Reconciliation Act of 1985,  is the federal law which provides a temporary safety net for employees and dependents to maintain group coverage through employers of twenty or more employees at the individual’s expense.   State “mini-COBRA” laws apply to employers under twenty and vary.

DO NOT BE LATE PAYING COBRA PREMIUMS. Employers providing group healthcare coverage are pressured by ever-increasing benefit expense and are not inclined to allow their COBRA administrators to be merciful to anyone who is delinquent with a premium payment. There is little motivation for employers to be generous because they often are concerned that the former employees’ and dependents’ healthcare costs could affect future costs and rates. Also, from an employer’s point of view, making exceptions is precedent-setting.

Do not even use the grace period, an extra month beyond the due date. Why? If one mails the payment, payment may be delayed. A dispute may occur over the postmark date which may be illegible. Let’s say you make a payment late in December during the grace period for payment actually due on the first of December. Perhaps your payment is delayed or lost in the mail and you miss the grace period altogether or get in a dispute with the COBRA administrator over whether the payment was received on time. The COBRA administrator may then terminate the coverage back to November 30 th and you may not get the notice until early January AT BEST.

According to federal HIPAA laws, in every state there is some option for guaranteed coverage applied for and accepted within 63 days. In this scenario the 63 day clock started on December 1stand ends at the end of January which means filing an application IMMEDIATELY for coverage effective February 1st. Of course many individuals, particularly those who have had group coverage their entire lives, have no idea how to navigate the system in this situation and thus miss the 63 day window.

Because termination of COBRA can lead to costly, unanticipated medical expenses and a gap in coverage, it is advisable to establishelectronic funds transfer for this important payment. After all, the plan or COBRA administrator is not even required to generate an invoice for COBRA payments.  Also, be aware if the premium amount has gone up and plan payment accordingly. We have seen people terminated because they paid an incorrect, lesser amount.

Has Healthcare Navigation ever been successful in getting COBRA reinstated? Yes we have but we hope you never need to retain us to plead or beg for reinstatement for this avoidable situation. Late payment is always a legitimate reason for an insurer or a COBRA administrator to terminate. Please, do not let your coverage be terminated for late payment.

In 2014, all non-Medicare individual coverage will be guaranteed issue (i.e., won’t be denied based on health reasons). However, COBRA will remain an important protection and may remain a better option for many than the individual market. That will depend on a number of factors.   Again, do not let your coverage be terminated for late payment.   If you have a friend or relative on COBRA, please share this information with them.