COBRA & MEDICARE: DO THEY WORK TOGETHER?

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COBRA continuation coverage provides temporary continuation of health benefits at group rates for qualifying individuals and their dependents if coverage is lost based on a specific qualifying event, such as job loss, reduction of hours, divorce death, or qualifying for Medicare coverage. If you qualify for Medicare coverage based on age and are also eligible for COBRA, whether you can have both COBRA and Medicare coverage will depend on which coverage you have first.

If You Have COBRA Before Enrolling In Medicare

If you are already enrolled in COBRA coverage when you choose to enroll in Medicare, your COBRA coverage will usually end on the date of your Medicare enrollment. Though COBRA coverage will end once you enroll in Medicare, it is recommended that you enroll in Medicare during your initial enrollment period (the 7 month period beginning 3 months before you turn 65 and ending 3 months after your birthday month). This is because you are not entitled to a separate enrollment period for Medicare once your COBRA coverage ends.  If your initial Medicare enrollment period has ended before your COBRA coverage ends, you will have to wait until the next Medicare annual enrollment period to enroll in Medicare.  Waiting rather than enrolling when you first become eligible can make you subject to paying a higher Part B premium.

Overlapping Enrollment Eligibility

There are times when beneficiaries are eligible to enroll in Medicare and COBRA at the same time. Qualified COBRA beneficiaries have an election period during which they can choose whether to elect COBRA coverage. This COBRA election period may overlap with the Special Enrollment Period (SEP) for Medicare. This is the 8-month period that begins the month after your qualified group health plan coverage ends. During this enrollment period, individuals may enroll in Part A, Part B, Part C (Medicare Advantage) and Part D. If you are eligible to enroll in both at the same time, your COBRA coverage will usually end on the date you enroll in Medicare.

Dual Enrollment

If an individual already has Medicare when he or she become eligible for COBRA, they can enroll in COBRA and can have both at the same time. Unless the beneficiary has End Stage Renal Disease, Medicare will be the primary payer for medical claims and COBRA will be the secondary payer. Because COBRA coverage is secondary, and its cost is high, most people choose not enroll in COBRA if they already have Medicare.

Making the Best Choice

When deciding to enroll in Medicare or maintain COBRA coverage, your most beneficial choices are to either enroll in Medicare when you first become eligible at age 65 or to enroll in Medicare during the special enrollment period after your group plan coverage ends. Once enrolled in Medicare, you will likely not need to elect COBRA continuation coverage for medical benefits; however, you may still choose to elect COBRA continuation for other benefits like dental or vision.  This does not affect any of your dependents’ right to choose COBRA coverage. Though you may not elect COBRA, your spouse and/or dependents each have separate COBRA rights and they can choose whether to elect COBRA coverage for themselves.  

RedQuote Can Help

Redquote is a team of passionate and experienced healthcare advisors ready to help giude you through examining your healthcare options.  We’ll help you  compare COBRA and Medicare plan benefits and premiums to make sure you find the right fit,  provide you with information about individual plan options and any changes you can expect due to Medicare enrollment, and walk you through the enrollment process.  Don’t hesitate to call ReQuote today!

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Published Nov 16, 2018.