If you’re usingCOBRAhealth insurance, chances are you’velost (or left) your job, gotten a divorce, aged off a parent’s health plan, or your spouse transitioned to Medicare or passed away. Any of these situations can make your finances fragile and your bills harder than usual to pay. Likewise, the stressfulness of these situations can make you prone to lose track of details here or there.
Although the deadline to pay yourCOBRA health insurance premiumis a bad detail to forget, you aren’t the first person to be late paying your COBRA premium. The consequences of being late paying for COBRA can range from a bit of a hassle to permanently losing your COBRA coverage. What happens in your situation depends on whether you’re late on your initial COBRA premium payment or late with a payment for ongoing COBRA coverage.
This article will explain how COBRA deadlines and grace periods work, and what you need to know about making sure that you don’t inadvertently lose your coverage due to failure to pay your premiums.
It’s important to note that under COBRA rules, the health plan is not required to send monthly premium notices.Your plan may do so, but it’s wise to set yourself some sort of reminder to ensure that you remember to pay your premium, even if you don’t get a premium notice from the insurance company.
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Deadline Extension Due to COVID Ends July 10, 2023
During the COVID national emergency, COBRA election and payment deadlines were extended. They could last for up to one year, instead of the normal timelines discussed below. These deadline extensions end July 10, 2023, and the normal rules will once again apply as of July 11, 2023.
Late Paying Your Initial COBRA Premium
Your Initial COBRA premium must be paid within 45 days of the time you elect COBRA coverage.Your COBRA administrator will consider the date your COBRA election form is postmarked to be the date you elect COBRA. That postmark sets your 45-day clock ticking.
This initial COBRA premium payment might be larger than subsequent monthly payments since it could cover more than one month of health insurance coverage, depending on how soon you elect COBRA.
For example, let’s say you get laid off on June 15, your coverage is scheduled to end on June 30, and you elect COBRA on August 10. You’ll have another 45 days to pay your first premium (so it will be due September 24), but you’re going to have to get caught up on premiums for July, August, and September at that point.
There is no grace period if you’re late paying your initial COBRA premium payment.If it isn’t paid on time (ie, within 45 days of electing COBRA), you lose your right to have COBRA coverage; you’ll have to find other health insurance options oryou’ll be uninsured.
However, in a situation like the one described above, in which a person has to pay multiple months of COBRA premiums, the health plan must allow at least a 30-day grace period for the months after the first month (this applies to all months after the first month, as described below).
Late Paying for Ongoing COBRA Health Insurance
But if you don’t make your premium payment within the 30-day grace period, your coverage can be canceled permanently.
An Example
Let’s say you’ve been on COBRA continuation health insurance for six months. Your health plan sets May 25 as the due date for your premium for coverage from June 1 through June 30. You miss the May 25 deadline and enter your grace period.
You break your ankle on June 10 and rack up an emergency room bill for $4,000. On June 15, you hobble to the post office on crutches, mailing your late COBRA premium payment well within the 30-day grace period. Your health insurance company has to credit your payment for June, ensuring that you continue to have seamless coverage.
If you had waited until June 26 to make your late COBRA premium payment, you would have been beyond the 30-day grace period and your COBRA coverage would have been canceled permanently (assuming your plan uses the minimum required grace period; plans can offer longer grace periods if they choose to do so).
You would be uninsured, and you would have no help paying that ER bill. The 30-day grace period is measured from the premium due date, not from the start of the coverage period.
Summary
A Word From Verywell
If you’re enrolled in COBRA, it’s important to stay on top of the monthly premiums. Your plan may send invoices, but they aren’t required to; it’s up to you to make sure you send in your premiums on time each month.
If you decide to cancel your COBRA, you do do so at any time. But the termination of your COBRA due to failure to pay premiums (or your choice to cancel it) will not trigger a special enrollment period to sign up for anindividual/family planoranother employer’s plan. So if you’re letting your COBRA lapse, you’ll want to make sure that you have other coverage in place, without needing to rely on a special enrollment period.
5 SourcesVerywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.U.S. Department of Labor; Employee Benefits Security Administration.FAQs on COBRA continuation health coverage for employers and advisers.Paychex.End of COVID-19 National Emergency to Impact COBRA as of July 11, 2023. May 4, 2023.U.S. Department of Labor, Employee Benefits Security Administration.An employer’s guide to group health continuation coverage under COBRA.Brown & Brown of Louisiana, LLC. Compliance Overview.COBRA Premiums.Centers for Medicare and Medicaid Services.COBRA continuation coverage questions and answers.
5 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.U.S. Department of Labor; Employee Benefits Security Administration.FAQs on COBRA continuation health coverage for employers and advisers.Paychex.End of COVID-19 National Emergency to Impact COBRA as of July 11, 2023. May 4, 2023.U.S. Department of Labor, Employee Benefits Security Administration.An employer’s guide to group health continuation coverage under COBRA.Brown & Brown of Louisiana, LLC. Compliance Overview.COBRA Premiums.Centers for Medicare and Medicaid Services.COBRA continuation coverage questions and answers.
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
U.S. Department of Labor; Employee Benefits Security Administration.FAQs on COBRA continuation health coverage for employers and advisers.Paychex.End of COVID-19 National Emergency to Impact COBRA as of July 11, 2023. May 4, 2023.U.S. Department of Labor, Employee Benefits Security Administration.An employer’s guide to group health continuation coverage under COBRA.Brown & Brown of Louisiana, LLC. Compliance Overview.COBRA Premiums.Centers for Medicare and Medicaid Services.COBRA continuation coverage questions and answers.
U.S. Department of Labor; Employee Benefits Security Administration.FAQs on COBRA continuation health coverage for employers and advisers.
Paychex.End of COVID-19 National Emergency to Impact COBRA as of July 11, 2023. May 4, 2023.
U.S. Department of Labor, Employee Benefits Security Administration.An employer’s guide to group health continuation coverage under COBRA.
Brown & Brown of Louisiana, LLC. Compliance Overview.COBRA Premiums.
Centers for Medicare and Medicaid Services.COBRA continuation coverage questions and answers.
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