COBRA and Medicare, who pays first? Questions and Answers
COBRA and Medicare.
What is COBRA (The Consolidated Omnibus Budget Reconciliation Act of 1985)?
COBRA is a law that requires employers with 20 or more employees to let employees and their dependents keep their group health coverage for a time after they leave their group health plan under certain conditions. This is called continuation coverage. You may have this right if you lose your job or have your working hours reduced, or if you are covered under your spouse's plan and your spouse dies or you get divorced. COBRA generally lets you and your dependents stay in your group health plan for 18 months (or up to 29 or 36 months in some cases), but you may have to pay both your share and the employer's share of the premium. Some state's laws require employers with less than 20 employees to let you keep your group health coverage for a time, but you should check with your State Department of Insurance to make sure. In most situations that give you COBRA rights, other than a divorce, you should get a notice from your benefits administrator. If you don't get a notice, or if you get divorced, you should call your benefits administrator as soon as possible.
What happens if I have COBRA and enroll in Medicare?
If you already have group health coverage under COBRA when you enroll in Medicare, your COBRA may end. The length of time your spouse may get coverage under COBRA may change when you enroll in Medicare. For more information about group health coverage under COBRA, call your State Department of Insurance, (see pages 31- 33).
What happens if I am in Medicare and choose to get COBRA coverage?
If you elect COBRA coverage after you enroll in Medicare, you can keep your COBRA continuation coverage. If you have only Medicare Part A when your group health plan coverage based on current employment ends, you can enroll in Medicare Part B during a Special Enrollment Period without having to pay a Part B premium penalty. You need to enroll in Part B either at the same time you enroll in Part A or during a Special Enrollment Period after your group health plan coverage based on current employment ends. However, if you have Medicare Part A only, sign-up for COBRA coverage, and wait until the COBRA coverage ends to enroll in Medicare Part B, you will have to pay a Part B premium penalty. You do not get a Part B special enrollment period when COBRA coverage ends. State law may give you the right to continue your coverage under COBRA beyond the point COBRA coverage would ordinarily end. Your rights will depend on what is allowed under the state law.
Remember, enrolling in Medicare Part B will also trigger your Medigap open enrollment period. To make sure you understand about this, you should call 1-800-MEDICARE (1-800-633-4227, TTY/ TDD: 1-877-486- 2048 for the hearing and speech impaired) and ask for your free copy of the Guide to Health Insurance for People with Medicare. You can also call your State Health Insurance Assistance Program (see pages 31- 33).
Who pays first, Medicare or my COBRA continuation coverage?
If you or your spouse are age 65 or over and have COBRA continuation coverage, Medicare is the primary payer. If you or a family member has Medicare based on a disability and COBRA continuation coverage, Medicare is the primary payer. However, if you or a family member have Medicare based on ESRD, COBRA continuation coverage is the primary payer for a 30-month period and Medicare is the secondary payer.
Who should I call if I have questions?
You should call your benefits administrator for questions about COBRA coverage and payments. If you have Medicare questions, call 1-800- MEDICARE (1-800-633-4227, TTY/ TDD: 1-877-486-2048 for the hearing and speech impaired). After January 1, 2001 you should call the Coordination of Benefits Administrator at 1-800-999-1118.