With the inevitable high tech layoff’s coming up, it’s time for a word of warning about COBRA. At the moment, I’m of course thinking about Seagate employees but this applies to anyone that has or is expecting to lose their job and offered COBRA.
The issue is the effect that electing COBRA has on your ability to select an Affordable Care Act (ACA or Obamacare) plan. What it comes down to is this:
When you lose your employer coverage, this creates a 60 day special enrollment period (SEP) for you to enroll in an ACA plan. This is the important part so pay attention….
If you elect COBRA, or your employer pays for COBRA for you as part of your severance package, that act cancels the SEP. The consequences of the COBRA election is the only time you can change to an ACA plan is either during the regular open enrollment period (Nov 1 through Jan 31) or when COBRA terminates (i.e. 18 months). You cannot voluntarily terminate COBRA and enroll in an ACA plan anytime you like.
Your Human Resources department SHOULD be explaining this to you. My experience with HR is that they are dumber than a box of rocks. Also, in general they are not your friend. Hopefully your experiences are better than mine, but color me skeptical.
Note, I’m not saying you shouldn’t elect COBRA, it can be an excellent choice depending on your situation. What I am saying is that you SHOULD make an informed decision. Additionally, do NOT elect COBRA simply to “buy time” to make a decision. Once you elect COBRA, you are “stuck” with that decision until either the next ACA open enrollment period or when COBRA expires 18 months after it starts. Of course, ideally you will find another job with benefits in short order.
Here are some useful links, as why should you believe me!?
Searching on the phrase “selecting COBRA terminates ability to enroll in ACA” will provide you with a plethora of reading material. Please make an effort to inform you fellow employees that lost their job about this post. Also, it would be great to get feedback of how well various HR departments, including Seagate, inform their employees of these hazards.
You can leave comments on this post or email me at boulderisstupid AT yahoo.com.
