Transition From COBRA to Exchange Could Cause Coverage Gap
California residents who transfer from a COBRA health plan to a plan offered through the state's health insurance exchange could face a six-week gap in coverage if they did not meet the March 15 application deadline, U-T San Diego reports.
COBRA -- or the Consolidated Omnibus Budget Reconciliation Act of 1985 -- allows individuals who lose their job or leave their position to continue coverage through their former employers' insurance plans if they pay the full amount of the premium. COBRA plan premiums often can exceed $1,000 per month, which makes enrolling in plans through Covered California a less-costly option, according to U-T San Diego.
Bruce Elliot, manager of compensation and benefits for the Society for Human Resource Management, said, "In nine out of 10 cases, getting an exchange plan is going to be way cheaper." He also noted that because COBRA plans run month to month, they can be canceled quickly.
Details of Coverage Gap
Individuals who applied by midnight on March 15 for a health plan through Covered California and who pay their first month's premium by March 26 will gain coverage on April 1.
However, individuals who submitted applications after midnight on Saturday could face delays of up to six weeks.
If their new coverage does not take effect until May 1, individuals enrolled in COBRA plans would have to continue paying their COBRA premiums or fall into a coverage gap.
Covered California spokesperson Roy Kennedy said individuals applying for coverage through the exchange should ensure that their COBRA coverage has stopped before their exchange plan starts. He said, "You can have one or the other, but not both at the same time" (Sisson, U-T San Diego, 3/14).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.