I have recently quit my job to freelance and I am now in a position where my old health insurance ends on 8/31, but my new health insurance can only begin as soon as 10/01. However, until 10/31, I can choose ("elect") to continue my prior health insurance coverage under COBRA .

In a perfect world, I could ignore this COBRA election form for the time being, knowing that if anything bad were to happen to me in September, I could always elect to continue my COBRA at that time.

Is this a correct understanding of how COBRA works?

If so, will there arise a situation in which I have health insurance in spirit but not in letter in September, thus subjecting me to the tax penalty under the Affordable Care Act?

  • Who told you your new coverage can only begin on 10/1?
    – quid
    Aug 30, 2016 at 21:33
  • @quid I think it's just how Mass HealthConnector works given that I'm getting to this so late in the month.
    – eLillie
    Aug 31, 2016 at 13:19

2 Answers 2


COBRA can be enacted retroactively. You have 60 days to elect coverage, so you can wait until it's needed to enact it, but you will have to pay for the retro-active coverage. I did the same thing when I changed jobs last year and it saved me a ton rather than electing it right off the bat.

From www.cms.gov:

Qualified beneficiaries must notify the plan administer of their election according to the instructions laid out in the election notice. Qualified beneficiaries must be given an election period of at least 60 days during which each qualified beneficiary may choose whether to elect COBRA coverage. This period is measured from the later of the date of the qualifying event or the date the COBRA election notice is provided. COBRA coverage is retroactive if elected and paid for by the qualified beneficiary.

You can go up to 3 months before an ACA penalty might be assessed. I'll try and find the specific wording about that. Definitely not something to worry about at this stage.

Here's a link to the healthcare.gov site relating to COBRA.

Does COBRA count as qualifying health coverage (or "minimum essential coverage")? Yes. This means if you have COBRA coverage you don’t have to pay the fee that people without coverage must pay.

Update: Here's the IRS blurb about coverage gaps and ACA penalties:

  1. What qualifies as a short coverage gap?

In general, a gap in coverage that lasts less than three months qualifies as a short coverage gap. If you have more than one short coverage gap during a year, the short coverage gap exemption only applies to the first gap.If you have a coverage gap of 3 months or more, you are not exempt for any of those months.


Am I formally insured during the COBRA election period if I ultimately choose not to elect coverage?


You have about 60 to elect COBRA coverage. In your example if you elect to continue coverage via COBRA on October 20th, you will need to pay premium for September and October. Many people in your position will just wait to see if they ever actually need the coverage.

Since you've had an involuntary loss of coverage, you're given a "qualified life event" enrollment window for individual coverage. I don't know who told you the soonest you can have coverage is 10/1, but because of your coverage loss you're able to buy individual coverage with no break in coverage which should get you a 9/1 coverage date. You will likely need some form of notice from your former plan indicating your coverage loss date.

  • I believe by "COBRA period" he means the 60-day period you're referring to.
    – BrenBarn
    Aug 31, 2016 at 4:12
  • @BrenBarn I agree, and in that period he will not be covered if he chooses not to elect coverage.
    – quid
    Aug 31, 2016 at 4:13

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