COBRA limitations and Medicare

When people leave or lose their jobs, many decide to continue their health coverage under provisions of a law passed in the 1980s. It is called the Consolidated Omnibus Budget Reconciliation Act (COBRA).  It can permit people to continue their group health plan for up to 18 to 36 months. Normally, doing so requires the former employee to pay all of their health premiums, although some employers provide part of these payments.

The “catch” with COBRA coverage is that it is not considered participation in an active employer group health insurance plan under Medicare rules. Accordingly, when a person on COBRA turns 65, it no longer has to be their primary payer of health insurance claims. It may provide secondary coverage to help pay valid claims that Medicare does not fully pay.

Enrolling in Medicare entails the same decisions as other new enrollees, and is covered in other FAQ entries.

The primary concern of people in this situation is that they can lose primary health coverage by failing to get Medicare.  Before this happens, people should contact their COBRA insurer and review how it will handle claims when they turn 65 and become eligible for Medicare.

Otherwise, they could unintentionally lose their primary insurance and face steep medical bills should they have a serious illness of accident.

People with questions about COBRA can call the State Health Insurance Assistance Program (SHIP), which provides free Medicare help from trained counselors.