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I am going to give my notice to resign my company, and will want to take advantage of COBRA (US Temporary Health Insurance). Will the employer provide the paperwork automatically after giving notice, or do I have to ask for them specifically?

  • COBRA documents? What are those? And in what country? – Oded Jul 21 '14 at 14:12
  • I am located in United States! – john doe Jul 21 '14 at 14:13
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    Every place I have ever worked has given me the documents as part of my final interview with HR. That doesn't mean it will happen at all companies. There is no reason not to ask specifically for them. – HLGEM Jul 21 '14 at 14:14
  • If they don't give you the COBRA documents on your way out, you ask for them. – Vietnhi Phuvan Jul 21 '14 at 14:18
  • Hey john, I edited your post a bit to make it a bit clearer to our international users. If I screwed something up, please feel free to edit it yourself. Thanks in advance! – jmac Jul 21 '14 at 14:24
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I changed jobs earlier this year. On my last day, I had a meeting with HR where I signed a stack of paperwork, including an explanation of COBRA benefits that mentioned a specific company that handled the COBRA benefits for my old employer. Health insurance at my new job did not take effect for 3 months, so I researched this issue quite a bit.

My experience is in California, but since COBRA is a federal benefit it should work similarly in other states.

As explained to me by HR and the administrative company's helpdesk staff, the process works something like this:

  1. Employer needs to send the paperwork to the administrative company within 30 days.
  2. The administrative company sends out letters to the former employee within 14 days after receiving documentation from the Employer. These letters explain what COBRA is, what the monthly cost would be, and how soon you need to apply for them to take effect.
  3. The Employee responds to the administrative company's letter (within 60 days) by following the directions in the letter itself.

While this seems like it would penalize the employee by having to wait for all this paperwork to take effect before they can get their benefits, the administrative company informed me that the COBRA coverage is retroactive, meaning that if you lose your employer's insurance coverage on July 21st, but are not enrolled in COBRA until August 21st due to the paperwork delays, you can still be covered by COBRA for a hospital visit on July 22nd. Depending on the details of the company administering your COBRA plan, this may mean that you need to pay out of pocket and get reimbursed later or that the hospital bills the COBRA plan directly.

This money.se question has more info about using COBRA retroactively.

COBRA Alternative - Obamacare

When you first get the COBRA packet that explains the benefits and costs, you may be surprised to learn that COBRA is really expensive, as you are paying both your normal monthly premium as well as the portion that the employer contributed. As pointed out by blrfl and documented in the federal government's COBRA FAQ, the administrative company can also charge an additional two percent for administrative costs.

Q15: Who pays for COBRA coverage?

Your group health plan can require you to pay for COBRA continuation coverage. The amount charged to qualified beneficiaries cannot exceed 102 percent of the cost to the plan for similarly situated individuals covered under the plan who have not incurred a qualifying event. In determining COBRA premiums, the plan can include the costs paid by employees and the employer, plus an additional 2 percent for administrative costs.

However, you can use Obamacare as an alternative to COBRA and it is usually cheaper. Healthcare.gov has specific guidance on how you can take advantage of an obamacare policy if you change jobs.

In my case, I signed up for an obamacare plan that started the month after I left my old job. I didn't need any healthcare in between the end of the previous job and the start of the obamacare coverage, so I decided to save money and not use COBRA for the few weeks in between.

This is a big decision for you and your family, I would encourage you to find the option that fits your needs.

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    Really informative answer! I am in the same situation as my new health benefits will not start until 3 months. I will check out the COBRA and see if I can stay on the same plan. My current plan does not have monthly premium but has high deductibles. Thanks again! – john doe Jul 21 '14 at 16:25
  • Thank you very much Matt. Can you please tell us what it the difference between the premium with COBRA ? I heard from someone that it is typically much more that what the company paid. – Borat Sagdiyev Jul 22 '14 at 4:05
  • @BoratSagdiyev: The most an employer can charge you for coverage is the amount they pay the insurance carrier plus 2% for administrative overhead. COBRA can cost substantially more than you paid while employed, as any subsidies provided as a benefit no longer apply. – Blrfl Jul 22 '14 at 11:39
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I don't know much about COBRA but hopefully this small research can give you some ideas:

Certain qualifying events (such as termination, reduction of hours, or an employee’s death) must be reported by the employer to the plan administrator within 30 days of the qualifying event. Other qualifying events (such as divorce, legal separation, or loss of dependent child status) must be reported by the employee or other qualified beneficiary; the qualified beneficiary must have at least 60 days to provide notice of such an event.

I'm guessing that the employer can send them right away but he's enforced to do it within the mentioned time-period, meaning you shouldn't have to worry about it.

Once the plan administrator becomes aware of a qualifying event, it must provide election notices to all qualified beneficiaries within 14 days.

Once your employer has delivered the documents they should be taken care of within 2 weeks.

I used this article as a reference.

If I were you, though, I'd simply ask the employer or their HR department, they must know the answer. Better safe than sorry.

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