Short term health insurance between jobs

Question

My wife is changing jobs- her and the kids are currently on her employer's group health plan. She is changing employers unexpectedly- she has only been at this employer for about four months. She has another job lined up, but there is around a 3 week gap between the end of her current employment and the start of her new employment. Her new employer offers benefits and she will be putting herself and the kids on that plan as well.

Before this everyone was on my group health plan for several years while my wife was in school.

As far as I know, my wife should be eligible for COBRA through her current employer, but this should also be a qualifying life event for her to get coverage through my workplace as well. There are also short term health care plans as well.

Is there any difference or advantage to these options beyond premiums, deductibles, and coverages? Does changing insurance frequently cause any kind of problem? Can I sign up for insurance for three weeks or a single month at a time? Would there be any issue with not signing up for any insurance and then enrolling in COBRA only if an unexpected health issue arises?

Answer 1

COBRA continuation is likely not the optimal move at this time. Employer-sponsored coverage subsidized by an employer, unless the available plans are absolutely awful, will likely result in a lower overall cost compared to COBRA (even assuming reaching the out-of-pocket maximums). That being said, it's completely down to the plans you have access to.

COBRA coverage is expensive (up to 102% of the combined employee and employer cost - the total cost of employer-sponsored health insurance can be found on the W-2 Box 12 code DD), and it takes effect retroactively as long as you enroll before the 60-day enrollment window closes. In other words, if you end up needing coverage during the uncovered 3-week period, you can enroll after the medical event and still get coverage retroactive to the day the employer-sponsored coverage ended. The main risk there is if the medical event is so severe that it's impossible to enroll (i.e. full incapacitation).

If your plan is already to wait until your wife's new coverage becomes available, it's probably safe to wait since the new coverage will start within the 60-day COBRA enrollment window. If insurance is needed before the new coverage starts, enrolling in COBRA will cover the events between loss of coverage and COBRA enrollment. If coverage isn't needed, there's no need to spend the money to enroll in COBRA. Again, full incapacitation would be the main risk. It may make sense to have the COBRA enrollment form completed and ready to be sent just in case.

Answer 2

Is there any difference or advantage to these options beyond premiums, deductibles, and coverages?

One issue is that not all doctors accept all insurance plans. Picking a plan that would mean that your favorite medical provider is out-of--network, is something that most people would choose to avoid.

If you are only going to have an interim plan for a few weeks this might not make a big difference.

Does changing insurance frequently cause any kind of problem?

It can be confusing to remember who was the provider when you had that office visit. You will have to make sure the office/billing staff have the correct information. Submitting the claim with the wrong insurance information can cause delays.

Can I sign up for insurance for three weeks or a single month at a time?

I am sure you wouldn't be the first person to have to get insurance from the ACA website but then qualified for employer coverage a few days later. Yes you can signup, and then drop it a few weeks later.

Would there be any issue with not signing up for any insurance and then enrolling in COBRA only if an unexpected health issue arises?

If you know when coverage with the new employer will start, and it is truly going to be a short window, and you can avoid non-emergency medical expenses during the gap, you might want to make it without having to enroll in COBRA.

If the expected gap will be close to the three month gap that you can have and still be considered to have continuous coverage you might have to get COBRA or ACA coverage.