Applying for COBRA benefits can be a lifesaver when transitioning between jobs or dealing with unexpected life changes. However, many applicants make mistakes that lead to delayed coverage, higher costs, or even disqualification. In this guide, we will highlight the top mistakes to avoid when applying for COBRA benefits in 2025, ensuring you maintain uninterrupted health coverage without unnecessary stress.
1. Missing the COBRA Enrollment Deadline
One of the most common mistakes is failing to enroll in COBRA within the required 60-day period after losing employer-sponsored coverage. Missing this deadline means losing your right to continue coverage.
Tip: Mark important dates on your calendar and set reminders to ensure timely enrollment.
2. Not Understanding COBRA Costs
Many people assume their employer will continue covering part of their premiums. However, under COBRA, you are responsible for the full premium, plus a 2% administrative fee.
Tip: Calculate the full cost beforehand to determine if COBRA is the best option or if a marketplace plan is more affordable.
3. Assuming COBRA Covers Everything Your Previous Plan Did
While COBRA continues your existing coverage, some benefits may change based on your employer’s plan modifications.
Tip: Review your plan details and confirm what’s covered before enrolling.
4. Not Notifying Dependents About COBRA
Each eligible family member has an individual right to elect COBRA. Failing to inform them could result in lost coverage.
Tip: Ensure that all dependents who need coverage are aware of their enrollment rights.
5. Failing to Pay Premiums on Time
Late or missed payments can lead to policy termination. COBRA allows a 30-day grace period for premium payments, but once coverage is canceled, reinstatement is difficult.
Tip: Set up automatic payments or calendar alerts to avoid missing deadlines.
6. Not Exploring Alternative Health Insurance Options
COBRA can be expensive, and there may be more affordable options such as ACA marketplace plans, Medicaid, or short-term health insurance.
Tip: Compare different insurance plans to find the most cost-effective and comprehensive coverage.
7. Assuming COBRA is Automatic
COBRA coverage is not automatic. You must actively enroll and complete the required paperwork within the given timeframe.
Tip: Contact your employer or plan administrator promptly to initiate the process.
8. Ignoring Special COBRA Extensions
Some situations, such as disability, may extend COBRA coverage beyond the standard 18 months. Many people are unaware of these extensions.
Tip: Check eligibility for any extended COBRA provisions if applicable.
9. Expecting COBRA to Last Forever
COBRA coverage is temporary and lasts between 18-36 months, depending on circumstances.
Tip: Plan for a long-term health insurance solution before your COBRA coverage expires.
10. Not Seeking Professional Assistance
Health insurance policies can be complex, and mistakes in your application can lead to coverage gaps.
Tip: Consult a benefits specialist or insurance broker for guidance.
Conclusion
Applying for COBRA benefits requires careful attention to deadlines, costs, and available options. Avoiding these common mistakes can help you maintain seamless health coverage and make the most of your COBRA benefits. Whether you’re transitioning between jobs or experiencing other qualifying events, staying informed and proactive will ensure you secure the best possible health coverage in 2025.
FAQs
1. Can I enroll in COBRA after the 60-day deadline?
No, if you miss the 60-day enrollment window, you lose your COBRA eligibility permanently.
2. Can I switch from COBRA to a marketplace plan?
Yes, you can switch to a marketplace plan during open enrollment or if you qualify for a special enrollment period.
3. Will COBRA cover my pre-existing conditions?
Yes, COBRA continues the same coverage as your previous employer-sponsored plan, including pre-existing conditions.
4. Can I add new dependents to my COBRA plan?
No, COBRA only covers those who were enrolled in the original employer-sponsored plan.
5. Is COBRA coverage available if my employer goes out of business?
No, COBRA is not available if the employer ceases to offer a health plan altogether.