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Do I Start a New Deductible With Cobra Insurance?

If a change in employment has you continuing your health insurance through the Consolidated Omnibus Budget Reconciliation Act, or COBRA, you may have a few questions. One key question is whether or not you have to satisfy another deductible when COBRA coverage begins. Since you are continuing your current coverage, any costs that apply to your deductible still qualify. If you already satisfied this year's deductible, you will not have to meet another deductible until the next calendar year.

  1. Coverage Period

    • Typically, you are eligible for COBRA benefits for 18 months after employment ceases. This period extends to 36 months for dependents of a deceased employee. The average coverage period for COBRA coverage is approximately 18 months.

    Electing COBRA Coverage

    • You do not need to elect COBRA insurance coverage immediately after terminating employment. The law gives you 63 days to decide if you want to do that. Be aware that you will need to pay the back premiums at the time you elect coverage. Your former employer can also charge an administrative fee equal to 2 percent of the insurance premium. If you have a Health Savings Account, or HSA, you can use the funds in this account to pay COBRA premiums during your unemployment or until you become eligible for health insurance benefits with your new employer.

    Changing Insurance Carriers

    • If the company through which you have your COBRA insurance coverage changes insurance carriers, you may have to meet the new insurance plan's deductible. This will probably be the case, even if you met the deductible on your prior insurance plan. If your former employer changes health insurance carriers and plans, you must change plans as well to continue your COBRA benefits.

    Spousal COBRA Coverage

    • If your spouse has coverage through her employer's health insurance and she loses her job, she has the option of continuing her insurance through her former employer's COBRA plan or joining yours. If she joins your plan and had coverage prior to the qualifying event, she will have to meet the deductible for this plan, even if she meets the deductible on her previous plan.

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