Medicare and COBRA can work together in certain situations, but does it make sense to have both?

COBRA is the Consolidated Omnibus Budget Reconciliation Act; this legislation helps provide medical insurance to employees that would otherwise lose health coverage during an employment loss. Medicare is insurance designed for those aged 65 and over or for those with qualifying disabilities.

Like many Americans, employment situations have become complicated. If you’ve recently changed employers or lost employment, you may have some questions about your coverage. Well, you’re in luck because we have the answers on everything COBRA and Medicare-related.

Understanding COBRA and Medicare Coordination

If you’re on COBRA coverage before you sign up for Medicare, your COBRA insurance will likely end when you sign up for the federal program. Whether or not you choose COBRA coverage, you’ll have eight months to sign up for Part B without being penalized.

If you miss the Special Enrollment Period to sign up for Part B, you’ll have to wait until the General Enrollment Period. Late enrollment fees can apply.

It’s best to talk to the plan administrator through the office in which you were employed to discuss specific cobra coverage. If there are any changes to your situation such as a divorce, you have 60 days to notify the plan administrator of the change.

Can You Have Medicare and COBRA at the Same Time?

Technically, yes you can have both Medicare and COBRA at the same time. If you do take COBRA, it’s important to know that you don’t want to drop your Medicare.

Medicare becomes your primary insurance and COBRA is secondary. This means Medicare will pay its portion first and the COBRA will cover some of the expenses Medicare doesn’t pay.

How Does Medicare Work with COBRA?

If you’re already on Medicare when you become eligible for COBRA, you’re given allowance to enroll in COBRA insurance. COBRA tends to be very costly, but if you have high-cost medical conditions, you may want COBRA insurance.

What if I Have End-Stage Renal Disease Medicare and COBRA?

Those eligible for Medicare because of End-Stage Renal Disease (ESRD) will have COBRA as the primary insurance during the first 30-month coordination of benefits period.

During this coordination period, the COBRA plan will pay first, and Medicare will pay second. For those that don’t have COBRA, Medicare will pay primary.

Can I Have Part A Only and COBRA?

Some beneficiaries will only have Part A because the employer group coverage was creditable coverage through Medicare, allowing a delay in Part B and Part D. Now that you don’t have the employer plan, you’ll need to sign up for Part B.

You might need Part D too; it depends on if your COBRA drug coverage qualifies as “creditable coverage” under Medicare guidelines.

If your coverage is creditable, you have 63 days to find Part D when COBRA ends to avoid a late enrollment penalty. However, if the coverage isn’t creditable, you have 63 days after losing your employer coverage to enroll in Part D.

COBRA and the Medicare Part B Penalty

You need to enroll in Part B as soon as you’re eligible. You’ll have 8 months from the end of your employment to avoid a Part B late enrollment penalty.

Losing your employer coverage gives you a Special Enrollment Period. But when COBRA ends, you won’t qualify for a Special Enrollment Period.

FAQs

Is COBRA always secondary to Medicare?

No, during the ESRD 30-day coordination period, COBRA would be primary. Otherwise, COBRA is secondary.

Is COBRA considered creditable coverage for Medicare?

Talk to the plan administrator to find out if the CORBA policy meets Part D creditable coverage standards. You need to sign up for Medicare Part B.

Can a Medicare-eligible person elect COBRA?

Yes, if you’re eligible for Medicare you can still elect to enroll in COBRA insurance. You may need to sign up for Medicare Part A, B, and D depending on your coverage.

Just because you can sign up for COBRA doesn’t mean it’s in your best interest. Be sure to review all your options.

Looking to Supplement Your Medicare Coverage?

If you already have Medicare, COBRA might not be your best option if you lose your employment. A Medicare Supplemental plan could shore up your coverage and carry just a low monthly premium that could be much cheaper than COBRA.

We have licensed insurance agents who could show you the various options available to you and answer any questions you have. Our agents’ time and efforts are of no additional charge to you but can be invaluable.

So give them a call today. Or, if you find it easier, complete our online rate form to receive the best rates and plans in your area.

Picture of the author
by Lindsay Malzone, Lindsay Malzone is the Medicare expert for Medigap.com. She's been contributing to many well-known publications as an industry expert since 2017. Her passion is educating Medicare beneficiaries on all their supplemental Medicare options so they can make an informed decision on their healthcare coverage.