COBRA, which is known by most as continuation of benefits, stands for the Consolidated Ominbus Reconciliation Act. Under this 1985 law, covered employees and their dependents who lose health insurance because of one of a series of qualifying events* are entitled to purchase continuation of that coverage. COBRA however, is typically very expensive.
Now that the Affordable Care Act (ACA) is here, many people who qualify for COBRA can find more affordable coverage by buying a plan on the marketplace (aka the exchange) with financial assistance in the form of a premium subsidy and/or reduction of cost sharing. Click here to see if you may qualify for assistance.
An event* that would make you eligible to start COBRA would also make you eligible to purchase coverage on the exchange during a special enrollment period.
But What if You Already Have COBRA? Can You Switch to a Marketplace Plan to Save Money?
The answer depends on when and why your existing COBRA coverage is ending.
Prior to July 1, 2014 in States Using the Federal Marketplace (eg., Virginia)
For a limited time, you may be able to enroll in a new plan through the federal marketplace, regardless of the reason you are ending your COBRA coverage.
This is because of a special enrollment period created by the Department of Health and Human Services (HHS) to address concerns that employees may not have been given enough information about marketplace plans to fully understand their options. Click here to read the HHS notice. You must call the Marketplace Call Center at 1-800-318-2596 to get approval for this special enrollment period. The extension goes through July 1, 2014.
During Open Enrollment
During an open enrollment period you can drop your COBRA coverage for any reason and instead purchase a marketplace plan.
Note: Open enrollment for 2014 coverage ended on March 31, 2014. Open enrollment for 2015 coverage is November 15, 2014 through February 15, 2015.
Outside of Open Enrollment
Things get a little trickier if you are ending your COBRA coverage outside the dates of regular open enrollment (unless it during the special enrollment period of May 2, 2014 through July 1, 2014 mentioned above).
If you wish to end your COBRA benefits early, you cannot enroll in a marketplace plan outside of open enrollment. You must wait until either the next open enrollment period or until your COBRA coverage runs out on its own.
If your coverage runs out, this qualifies you for a 60-day special enrollment period during which you can enroll in a marketplace plan.
Avoid a Gap in Coverage
If you are going to replace your COBRA coverage with a marketplace plan, make sure you don’t have a gap in coverage by keeping your COBRA in effect until your new plan starts.
Keep in mind that If you apply for coverage between the 1st and 15th of a month, your coverage will be effective on the 1st of the very next month. If you enroll between the 16th and last day of the month, your coverage will begin on the 1st of the second next month. (For example if you enroll between January 1 and 15, coverage begins February 1; if you enroll between January 16 and 31, coverage begins March 1).
Contact Virginia Medical Plans for Help
Virginia Medical Plans can help you select and purchase a marketplace plan. Simply enter our broker information when applying online through healthcare.gov:
First name: Jonathan
Last name: Katz
FFM User ID: JONKATZAGENT
NPN Number: 1585616
Contact us today if you need help choosing a plan on or off of the marketplace.
*Qualifying events for COBRA include termination of employment, reduction of hours, divorce or legal separation, death, eligibility for Medicare, loss of dependent child status. Click here for a more detailed look at qualifying events.