As a senior about to retire and eligible for Medicare and COBRA, understanding your options will help you decide which coverage is best for you.
COBRA
Consolidated Omnibus Budget Reconciliation Act, was passed by Congress in 1985 to protect qualified beneficiaries and their dependents from losing health coverage abruptly should group health insurance stop. Benefits are typically available when a qualifying event occurs, such as a divorce or legal separation, death of a covered employee, retirement, or, in some cases, eligibility for Medicare.
Current Coverage
Seniors often delay signing up for Medicare Part B if they have comparable health insurance, COBRA is not considered comparable coverage. If you wait to enroll in Part B until your coverage ends, you will pay a late enrollment penalty. If you have coverage at the time you become eligible for Medicare, sign up for Part B to avoid the late penalty. Enrollment in Part B triggers open enrollment rights for Medicare Supplement. You will have six months from the date you enroll in Part B to choose a plan without regard to your current health condition. If you have COBRA before enrolling in Medicare, your benefits may end on the date you sign up for Medicare. However, your spouse and dependents may be able to keep coverage for up to 36 months. You may be able to keep benefits for services not provided by Medicare. For example, if dental or vision coverage is provided, you may be able to continue paying for benefits for as long as you are entitled.
Enrolled in Medicare
You may have already signed up for Medicare when benefits are made available to you. You can sign up for coverage even if you are already enrolled in Medicare. Medicare becomes your primary payer, while COBRA acts as your secondary payer. However, you will be responsible for both the Part B premium and your COBRA premium. Maybe your benefits include prescription drug coverage or vision care. With Medicare, these services are not included but are extra. You do have the option to turn down coverage benefits. But, if you have dependents who rely on you for health coverage, be sure to consider your options carefully. Only applies to companies with 20 or more employees. If you are planning on retiring or leaving employment where it is offered, you should receive a letter notifying you of your rights and offering you the option to elect continuation coverage. Typically, benefits extend for 18, and in some cases, 36 months.
References:
https://www.medicare.gov/supplement-other-insurance/how-medicare-works-with-other-insurance/who-pays-first/cobra-7-facts.html
MUC55-2017-BCBS
