COBRA is Not Primary- Medicare is Primary!
If you are on COBRA Insurance coverage and over 65 years old, Medicare is the Primary Insurance for you. This means that your Cobra insurance carrier is not required to pay the first portion of your claims that should be covered by Medicare. Thus, you could owe up to 80% of your costs for Medical Expenses.
See more about COBRA here:
Late Enrollment Penalties
In addition, you are at risk for late enrollment penalties for Medicare Part B (10% for each 12-month period in which you should have signed up for Part B).
See more about Late enrollment penalties here:
Special Enrollment Window
If you are over 65 and leaving an Active Group Medical coverage plan, you will have an 8-month Special Enrollment window to sign-up for Medicare Part B without penalties. It is critical that you sign-up during this 8-month window or you will not be able to sign-up until the annual enrollment window (January 1-March 31) and your coverage will not be effective until July 1.
See more about Special enrollment windows here:
My First Medicare Case
I officially joined Senior Advisors in June 2015. One of my first Medicare cases was a friend & mentor, whom I play basketball with at a local YMCA... let's just call him "Mike".
Mike had left a company that was sold in October of 2014. He was 66 at the time. He went on Cobra benefits starting in October 2014. At that time, it was not made clear to Mike that his Cobra coverage would not be the primary insurance carrier.
One afternoon in June 2015, I met with Mike for a cup of coffee. He was providing his guidance about my new role at Senior Advisors, and we stumbled upon his current insurance situation. I felt terrible that he had just exceeded 8-months since he left his prior active insurance coverage, which means he was outside his special enrollment window.
I urged him to go down to Social Security asap to beg and plead and see if they would let him sign up for Part B. Mike went down to Social Security the following day and pleaded his case and his confusion regarding his Cobra coverage and coordination with Medicare.
Unfortunately, nothing could be done.
Heavy exposure for Mike
Mike will not be able to sign up for his Medicare Part B until January 2016 and the Part B coverage will not be effective until July 1, 2016. Mike is heavily exposed with his current Cobra coverage and he will be further exposed starting in April 2016 when his Cobra expires. Since Mike is over the age of 65, he will not be able to legally purchase a individual health insurance policy and thus will have no medical coverage from April to June 2016 until his Medicare Part B starts July 2016.
Don't be like Mike
This is a very common situation for individuals over 65 that have Cobra. The Medicare rules are complicated and confusing. Similar situations apply to individuals on Retiree benefits, who need to sign-up for Medicare Part B and may not be aware of this.
If you are over 65 and on Cobra (or Retiree) benefits, and you have any doubts about the right Medicare selections, we would be happy to assist you with the process.
Please call us at 856-866-8900 or 908-272-1970.