I left my employer earlier this year and was offered COBRA. There was a 60-day grace period to sign up, so I waited until the last day to avoid tax penalties (my state penalizes you if you’re unemployed for more than 3 months without health insurance). They said the coverage would start from the day I left, so I signed up but then canceled it after a week since I was abroad and didn’t use the insurance at all.
Now, I’m wondering if the administrator can backdate the COBRA or let me cancel it altogether. It’s about $1,000, and I really don’t want to pay it. I started a new job about 2 months after signing up, so I have different health insurance now. I haven’t paid the bill yet, and I’m hoping it’s not accumulating interest or anything.
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Just to clarify you chose COBRA but didn’t pay for it, so now you owe for those two months. Is that correct?
If so, yes, by electing COBRA, you’re responsible for the payment. I’m not sure if interest is accruing, but it can be sent to collections.
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My understanding is the insured has another 30 days to pay the premium but must pay it current otherwise, it lapses. Nothing about electing forces payment. Most cobra administrators won’t reinstate until payment is received.
The dates start running the later of the coverage end date or the date of the cobra notice
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Actually it’s 45 days, but yes. I can’t say if you’re liable for COBRA premiums even if you elected coverage but didn’t use it. You have 60 days to elect coverage and another 45 days to submit payment, making it a total of 105 days.
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You’re actually right, and nothing forces them to pay. We insured a group of accountants who pushed every rule to the limit. The administrator didn’t bend the rules and didn’t let them in once they missed the deadline.
Of course, they wanted reinstatement right after they paid, which was easy to do. That was back before benefits software could manage everything in one place.
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Yes, I elected it on the last day I was eligible. At the time, I didn’t realize it was retroactive, and I wanted to avoid a 3-month gap in coverage to avoid a tax penalty. I haven’t called them yet to see if I can retroactively cancel or unelect, but I haven’t made any claims or used the insurance.
If it gets sent to collections, are there any penalties I should know about?
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Penalties: I mean, not really, outside of the potential harm to your credit report / score, and being harassed by debt collectors.