Health insurance is overwhelming, especially when you're faced with picking a plan that covers your providers, medications, and medical needs. Additionally, you would like to keep your finances intact and not make a mistake.
If you are eligible for both Medicare and COBRA in New Jersey, it is very important to fully understand your options so you are not penalized or accidentally have a gap in health insurance. In order to make an informed decision you'll need to know what each program is and which plan fits your needs and eligibility status.
You've likely heard much about Medicare and COBRA insurance plans. But what exactly are these plans, and how do Medicare and COBRA differ from each other?
Medicare is healthcare insurance for individuals age 65 and older. You can also qualify for Medicare if you are on Social Security disability and under age 65. Medicare has multiple parts to it and monthly premiums associated with it.
Medicare is individual coverage so a spouse or dependents are not covered under Medicare unless they individually qualify.
COBRA allows anyone who lost their job to keep employer coverage for up to 18 months after being terminated. While working, the employer helps pay for the health insurance cost, however once eligible for COBRA the employer no longer has to contribute to the cost and COBRA is typically a much higher monthly premium.
Unlike Medicare, COBRA allows you to have your spouse and dependent children covered under the plan. If you become eligible for Medicare, but your spouse or dependents do not, they can continue on COBRA for up to 36 months (18 additional months after the initial 18 month period).
The new American Rescue Plan, which is the CoronaVirus relief bill helps pay for the cost of COBRA for certain New Jersey residents.
If you are on COBRA and are eligible for Medicare then you need to know your options. Although COBRA can continue your employer coverage up to 18 months, Medicare does not consider COBRA to be “Credible” insurance. The enrollment windows for Medicare allow you up to 8 months to enroll in Medicare after losing employer coverage. If you do not enroll in Medicare during the 8 months after losing employer coverage, and continue on COBRA past the 8 months then you will have missed your eligibility period for Medicare. If this happens you can only apply for Medicare during the General Election Period (January - March) and Medicare will start on July 1st. Additionally, you will be penalized for not having credible insurance while you were on COBRA and eligible for Medicare. This penalty stays with you the rest of your life.
Therefore If your COBRA runs out in April and you did not apply for Medicare, you would have no insurance for 15 months, April until July of the next year! This can be devastating which is why you must plan ahead and not make assumptions.
To find out more, contact New Jersey Medicare Brokers.