This is from Winstead, Attorneys at Law:
For former employees contemplating electing COBRA continuation coverage (“COBRA”) or medical coverage from health reform’s insurance marketplace (the “Marketplace”), there are two distinct 60-day periods during which they may elect health insurance coverage, but these periods are not equal or equivalent. ...
If an employer uses both the 30-day period to notify the Plan Administrator of the employee’s termination of employment and health coverage and the Plan Administrator uses the full-14 day period available for it to notify the terminated employee of his right to elect COBRA, this may significantly reduce the period during which the former may compare COBRA coverage with coverage available on the Marketplace with full information. This limitation occurs because the employee’s termination of employment starts the 60-day special enrollment period during which the individual is eligible to enroll in coverage on the Marketplace, while COBRA’s 60-day election period begins when the election notice is sent to the former employee. If the COBRA notice is not sent by the employer until near the end of the initial 30-day period and the plan administrator does not act on such notice until near the end of the 14-day period, this means that 44 days have passed since the termination of employment and there are only 16 days remaining during which the former employee may compare coverage available on the Marketplace to the COBRA considering both the coverage and premiums (see attached timelines). An employer and plan administrator who take the maximum time periods for providing the COBRA election and notice may lead more employees to electing COBRA because they may have miss the opportunity to enroll under the Marketplace’s special enrollment period for termination of employment. ...
If an employer offers a separation package providing continued medical coverage for a period following employment termination, this continuation of coverage can delay the deadline for providing the COBRA notice and election. Some such delays effectively eliminate any period during which the former employee can choose between the two coverage options. For example, if coverage is continued for two months after employment termination and the COBRA notice will not be required to be sent until after the period during which the former employee can elect coverage on the Marketplace. ...
Covered California also expressly makes this same point on its website, here:
My employer agreed to pay for a few months of my COBRA coverage. Can I enroll in a Covered California health insurance plan after my employer stops paying for my COBRA?No, if your employer pays your COBRA premium for a limited time and then stops paying your COBRA premium, that loss of COBRA will not qualify you for special enrollment in a Covered California plan. If you go without health insurance coverage, you may face a penalty when you pay your taxes. You can enroll in a Covered California health insurance plan during open enrollment. The next open enrollment period will be in the fall of 2014.
