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I retired this year, my last day of work was 4/4/15. due to unused pdo time I was on payroll until 6/19/15. At the end of August I recieved info from cobra about continuing my insurance/ I unfortunately signed up even though premiums were double to what I was told. The letter said my coverage would begin 9/1/15 when they withdrew first premium through "payflex" (no other options were given for enrollment). On 9/1 they deducted over $1800 from my account saying it was retroactive from June. As far as I know I had no coverage June, July or August. Is there any recourse for me? How can they charge me for something I did not have? Can I cancel within a certain time period and get my money back? I cannot afford to lose that much money on retirement income. How is this legal??

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COBRA provides you the option to continue your coverage as you had during your employment, after you leave your job. It is optional, you need to actively elect it. Once you elect, coverage starts from the day your employment coverage ends.

So to answer your questions:

  1. Yes, it is legal. You elected this yourself, no-one forced you.

  2. You cannot get your money back.

  3. You did have coverage in June-July-August, since your COBRA election provided coverage from the date you left your job.

As to cancellation, from the DOL FAQ:

Q12: Can continuation coverage be terminated early for any reason?

A group health plan may terminate coverage earlier than the end of the maximum period for any of the following reasons:

  • Premiums are not paid in full on a timely basis;
  • The employer ceases to maintain any group health plan;
  • A qualified beneficiary begins coverage under another group health plan after electing continuation coverage;
  • A qualified beneficiary becomes entitled to Medicare benefits after electing continuation coverage; or
  • A qualified beneficiary engages in conduct that would justify the plan in terminating coverage of a similarly situated participant or beneficiary not receiving continuation coverage (such as fraud).

If continuation coverage is terminated early, the plan must provide the qualified beneficiary with an early termination notice. The notice must be given as soon as practicable after the decision is made, and it must describe the date coverage will terminate, the reason for termination, and any rights the qualified beneficiary may have under the plan or applicable law to elect alternative group or individual coverage.

If you decide to terminate your COBRA coverage early, you generally won't be able to get a Marketplace plan outside of the open enrollment period. For more information on alternatives to COBRA coverage, see question 4 above.

  • It does seem that the company made an error though if they sent him a letter saying "your coverage begins on September 1" if it actually began on June 20. – BrenBarn Sep 9 '15 at 19:33

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