Starting a new job in Nov or Dec. Family has high medical costs and we've met our OOP max this year. Am I best off using COBRA until EOY?

Submitted by Jr712 t3_ygn945 in personalfinance

I'm likely to get an offer for a new job at a new company to start in Nov or early Dec and trying to plan ahead. I have a special needs child so my healthcare costs are typically extremely high. For reference, this year we met our $2k family deductible the second week of January and our $10k family out of pocket max the third week of February.

Needless to say, I don't want to have to start over a new deductible and new OOPM in Nov/Dec and then start over again in Jan. Originally I was considering delaying my start date until Jan 1st but since that would be nearly a 60 day delay I'd be worried that the offer would fall through for some reason during wait. Then I thought that maybe COBRA would be a good solution.

I've never used COBRA before but my understanding is I could decline 2022 coverage at the new job and pay for COBRA to keep my existing insurance with existing deductible and OOPM levels through EOY. Then I could start insurance at the new company effective Jan 1 next year. Are those correct assumptions on how COBRA works?

My employer charges about $1,500 a month for family COBRA coverage so it's not cheap but it is cheaper than incurring another $10k in medical costs if all the limits restart in Nov/Dec and then restart again in Jan.

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Topher_86 t1_iu9hkhz wrote

When did you stop working for your former employer? You usually have 60Days to elect cobra so you could wait for that window to come about to decide.

As for the new job you’re going to want to make sure you know the open enrollment dates. Not all insurance renews 1/1, you’ll have to talk with your new employer about this.

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Jr712 OP t1_iu9izln wrote

I haven’t made the switch yet but I anticipate that if it happens it will likely be around Dec 1st.

I am familiar with the new employers benefits as I have friends who work there and know for a fact that their benefits renew on 1/1.

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Topher_86 t1_iu9q5b8 wrote

In that case just ride the cobra election window, then.

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Jr712 OP t1_iu9xfpz wrote

You still have to pay for it during that time right?

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AmazingAtheist94 t1_iua3jo9 wrote

You only pay for it if you end up using it.

COBRA allows you to retroactively opt-in throughout the 60 day window; if you had a heart attack on the 59th day, you could decide you wanted to opt-in and you'd effectively be covered for those previous 58 days.

However, you will have to pay the premiums for that entire window to essentially bring your balance to current..and you're paying your AND the employer's cost, so it's a little pricey.

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Jr712 OP t1_iuaflwv wrote

I see. Well there’s really no need to wait and see in my case. My child receives daily therapies which cost about $2k per week. It’s consistent and never ending. So we might as well immediately sign up for the Cobra.

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1live4downvotes t1_iu9uvcp wrote

>As for the new job you’re going to want to make sure you know the open enrollment dates.

Does this really matter? Doesn't losing coverage from a prior employer count as a qualified life event?

OP might not qualify for his new employers insurance right away. For some reason I remember not being able to sign up for insurance at my job for the first few weeks... but I also could be remembering that wrong.

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kepler1 t1_iuad4b2 wrote

I don't know why you would delay your start date at a new job just for this. You don't have to do that.

Here's what you do.

Start your new job, elect your new health coverage.

If you have any medical expenses until the end of the year, you retroactively choose COBRA on your old plan and submit those expenses under that. (if the COBRA coverage cost plus expenses makes it worth while to do this).

If you have no medical expenses, then you simply start using the new plan in the new year.

There may be a minor complication about "coordination of benefits" if you end up having 2 health plans at the same time. You might read the terms of the new job's health coverage for that.

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Jr712 OP t1_iuafjtt wrote

I see. Well there’s really no need to wait and see in my case. My child receives daily therapies which cost about $2k per week. It’s consistent and never ending. So we might as well immediately sign up for the Cobra.

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kepler1 t1_iuahwqr wrote

I see, then it makes sense. Just be sure to google/look into the "what if I have 2 health plans, coordination of benefits" issue. I.e. how do I make sure my COBRA old plan continues to be regarded as the primary plan until it expires.

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Jr712 OP t1_iuaqpeo wrote

From what I’m reading you can’t have COBRA if you’re also receiving coverage through an employer. I believe when I start the new job I should be able to decline coverage for the remaining days in 2022 thus qualifying me for COBRA and just enroll for coverage starting in 2023 at which point COBRA would be dropped.

I’ve never done this so if I’m making any bad assumptions please let me know.

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kepler1 t1_iuau1md wrote

Your situation is definitely more complicated than usual, so I would get HR verification of your assumptions in writing.

I don't know how your scenario would work unless you mean, you decline coverage as a new employee, and then because it's open enrollment season for 2023, you elect next year's coverage. This may be complicated -- depends on how the company HR policies work. Maybe because you're starting so soon to the end of the year, they assume your choices carry over to 2023? What you want to avoid is a situation / misunderstanding where you declined coverage, and you actually declined it for the next year as well.

So investigate thoroughly with your new company's signup policy.

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Jr712 OP t1_iuaw0ib wrote

Yeah I need to confirm if I can separately decline coverage for the rest of this year and just enroll for next year starting in January. Is that the main potential issue you’re seeing?

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kepler1 t1_iuay4pf wrote

Yes, I agree, that is the main issue and if you can get clear confirmation that that is how the company would handle it, I think you would be in the clear.

If you cannot get that clear confirmation, out of safety I might just enroll assuming that your choices will apply for rest of this year and into next year, and that you will begin your new job's health plan as soon as you start work.

Now here is a bit of gray area up to your discretion/judgement: You might try enrolling in COBRA anyway and submitting claims under your old plan. As you said, you're not supposed to have COBRA once you have another health plan, but maybe the systems are not in sync to tell each other that very well, especially for a new employee enrolling in the middle of a month towards the end of a calendar year. Maybe the worst that could happen is that an expense/claim gets bounced back and you have to claim it under your new plan. (and you would be out the COBRA premium as it didn't end up being used as you thought) It all depends on whether the cost/risk of doing this is worth the difference in out of pocket expenditure you're saving.

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shadow_chance t1_iuejp6r wrote

I think you could have COBRA and your new employer's coverage for 2022 but it wouldn't make any financial sense if you've already met your OOP max.

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dcdave3605 t1_iub8t1v wrote

I'm curious if you have looked into a version of Medicaid that covers children only (CHIP). Usually the income limits are higher than that of other Medicaid tiers. It would cover many costs.

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Jr712 OP t1_iubb5mq wrote

Unfortunately my income exceeds that programs limit.

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shadow_chance t1_iuejcem wrote

Based on your numbers, I think COBRA makes sense.

However, make sure you enroll in 2023 coverage from your new employer during their open enrollment. From some quick googling, it's suggested that dropping COBRA coverage willingly (not exhausting it) will not be a qualifying event to enroll outside of open enrollment.

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