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Should I Enroll in Medicare if I'm on COBRA Insurance?

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Should I Enroll in Medicare if I'm on COBRA Insurance?

COBRA, the Consolidated Omnibus Budget Reconciliation Act of 1985, gives individuals the right to continue group healthcare coverage after they have lost it due to certain qualifying events like job loss or reduction in work hours, divorce, death, or becoming qualified for Medicare. How to decide whether or not to elect COBRA and Medicare coverage depends in large part upon which you get first.

Medicare, then COBRA

If you are on Medicare first, and then have a qualifying event (stopping work or reduction of work hours), then you are eligible to have both Medicare and COBRA coverage. In this case, your group coverage under COBRA pays after Medicare. Any medical costs you incur will be paid by Medicare first, and then by your COBRA coverage second. It is important in this situation that you maintain your Medicare enrollment as without it would be like having no insurance at all.

Whether or not you want to take COBRA coverage depends on what you can afford and the type of coverage you want. COBRA may offer you vision and dental benefits, for example, that your Medicare coverage does not offer. If you elect to take COBRA coverage, be aware that you will have to pay both the Part B and COBRA premiums. It is important that you enroll in Medicare Part B coverage before you stop working. When COBRA coverage ends, you will not be eligible for a special enrollment period for Part B and you may have to pay a late enrollment penalty.

COBRA, Then Medicare

If you have COBRA coverage and then become eligible for Medicare, your COBRA coverage may end. However, you may be allowed to use COBRA for extra benefits like dental or prescription drug coverage. In order for COBRA to be used for drug coverage it must be creditable, which means that it must be as good as or better than Medicare’s prescription drug coverage. If your COBRA coverage is creditable, you may delay enrolling in Medicare Part D until your COBRA ends without paying a late enrollment penalty. You will have 63 days to enroll in Part D coverage when your COBRA ends.

Other Beneficiaries

Keep in mind that whether or not you choose Medicare while on COBRA, your spouse and your dependents have their own rights to COBRA continuation coverage if they were beneficiaries on your plan.

RedQuote Can Help!

RedQuote helps beneficiaries understand their COBRA plan benefits and can provide them with information about individual plan options and any changes they can expect due to Medicare enrollment.  We can help them choose the best plan for their age, budget and coverage preferences. If your company might be interested in hiring us to manage COBRA benefits for beneficiaries coming off your group medical plan, contact us today!

Published Aug 10, 2017.

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