What happens if I don’t pay for unused COBRA? [SOLVED]

bficky

(All in Texas)

So, I got laid off in mid-November. Through my severance, I had a paycheck and health insurance with my old employer through the end of the year. Once 1/1/11 rolled around, though, I needed COBRA for me and my family. I went back to the office on 12/30/10 and submitted my paperwork for COBRA. When my old office manager asked for the $1,000+ premium payment for COBRA (to be made out to my old company), I asked her if it’s true that you had 45 days to make your first premium payment. She said yes, and that any use of my COBRA insurance before the first premium was paid would be temporarily approved, pending payment of that first premium within that 45 days. I left the office, telling her I’d send her my premium within the 45 days.

I got a new job offer (thankfully) early December, and I started at my new place on 1/3/11. My new health insurance (same insurance company, same plan, same everything) would start on 2/1/11. In my paperwork for the new insurance, put down all my old insurance info and told them to cancel it on 1/31/11. All the paperwork went through fine, no issues or gaps in coverage.

So now that it’s after 2/1/11, I’m officially on my new insurance and off COBRA, and I never paid the premium. In the month of January, we never used any sort of health insurance for anything: copays, prescriptions, anything. So, will anything happen if I don’t submit my payment to my old company by 2/15/11? Not paying for the COBRA would mean that I didn’t have insurance in the month of January, but since I didn’t use it, would that gap in coverage matter?

Deebaser

The gap in coverage would be under 60 days, so no it would not matter in that respect.

However, you should really get on the horn with the health insurer, broker, and old company immediately to see if they can retroactively terminate you if you want to go that route. As it stands now, you were covered and you do owe the money. They may send you to collections, but at a minimum, you will be giving the office manager a headache.

bficky

Thanks.

I emailed my new office's broker, and I got this:

"Good afternoon, bficky,
Actually, no, you don’t have to make that payment if you do not want to. You can inform XXXX at XXXX that your new coverage is in place for 2/1 and that you didn’t need to use the COBRA. We can retro-actively term COBRA participants for non-payment. Please just have XXXX send me an email so that I can have it in writing from her."

Woo, no $1000+ payment. Sweeeeet.

SOLVED

Deebaser

You called your new company's broker? That didn't fix anything yet.

You need to call your Old company's broker or the insurer provided. If you call the insurer you're probably going to want to gloss over the fact that you want to retro-term because you wound up not needing the coverage in January. Also, you need to call them pronto, because these things have a timeframe.

Good luck.

bficky

The new company's broker and and old company's broker is the same person. I sent one email to the broker, and she told me to tell old company that I'm not paying. I did that, then old company told that same broker of the non-payment, then the broker retro-termed the coverage. All happened over lunch today. I got the confirmation email from the broker an hour later saying it's all done.

123random123

What happens if the same situation existed, but say you needed a cheap prescription or had to visit the doctor? If you didn't pay your premiums for that period, what charges would they come after you for? All premiums up until that point, just the charges sent to them, nothing, etc? I've been on a COBRA multiple times and have always been curious how charges like that work.

Deebaser

123random123 wrote: »

What happens if the same situation existed, but say you needed a cheap prescription or had to visit the doctor? If you didn't pay your premiums for that period, what charges would they come after you for? All premiums up until that point, just the charges sent to them, nothing, etc? I've been on a COBRA multiple times and have always been curious how charges like that work.

I'm not sure I understand, but did you go to the doctor while you werent insured? If so you're responsible for the full retail cost of the physician services.

123random123

No, I'm saying what if the same exact situation occurred as above: you stop working somewhere, you file for the cobra in the allotted time, and cobra benefits start. Except now within the 45 day grace period before you need to make a payment, you need a cheap prescription that requires insurance. So you use the cobra as insurance, but say it's a nominal costing thing anyways.

So could say a $40 prescription end up costing you $1,000 in back payments, whereas if you hadn't gotten the prescription you would owe nothing because you didn't use your coverage? I'm just curious where they draw the line at collecting instead of letting the account terminate without payment.

Deebaser

Ask them to retro-term you. They might do it, they might not be willing to do it because you used the insurance in that period. Either way it's worth a shot.