COBRA gives workers and their families the opportunity to stay on their employer group plan after a voluntary or involuntary job loss.
A lot of retirees think, “I’ll retire but just stay on my employer group plan through COBRA. THEN I’ll enroll in Medicare.”
Bad idea.
Why?
Being on COBRA will not protect you from paying late-enrollment penalties when you do decide to go onto Medicare.
Here are 5 things you NEED TO KNOW about COBRA and Medicare:
1. If you are 65 or older (eligible for Medicare benefits), Medicare A & B is supposed to be your primary insurance and COBRA can be, at best, secondary.
2. Cobra insurers want to keep your business, so they will sometimes pay in the absence of Medicare. But this leads to coverage gaps and late enrollment penalties when COBRA ends.
3. You should still be able to get a Medigap policy without medical underwriting because coming off a plan that pays secondary to Medicare (i.e. COBRA) confers Medigap guaranteed-issue rights.
4. Since COBRA lasts 18 months, many people are misled into thinking that they can go on COBRA for 18 months and then enroll in Medicare Part B penalty-free when COBRA stops…
5. BUT…After 18 months, they are outside their special enrollment period and will not be able to enroll in Medicare until the next general enrollment period.
This interaction between COBRA and Medicare is confusing. 🤪
If you need help as you transition from employer insurance to Medicare, we are a free resource that can help you.