Commenter Satby has just been laid off and is looking forward to going on the Exchange for coverage that starts on January 1, 2014.
There is a way to game the system for effectively free coverage via COBRA if nothing goes wrong in December for Satby. The Department of Labor COBRA FAQ has some relevant details to about COBRA and how to create a COBRA option for free as a transitional bridge to Exchange policies going live on Jan. 1, 2014.
Q15:
The initial premium payment must be made within 45 days after the date of the COBRA election by
the qualified beneficiary. Payment generally must cover the period of coverage from the date of COBRA election retroactive to the date of the loss of coverage due to the qualifying event.
Premiums for successive periods of coverage are due on the date stated in the plan with a minimum 30-day grace period for payments. Payment is considered to be made on the date it is sent to the plan. If premiums are not paid by the first day of the period of coverage, the plan has the option to cancel coverage until payment is received and then reinstate coverage retroactively to the beginning of the period of coverage.Q6
Plan participants and beneficiaries generally must be sent an election notice not later than 14 days after the plan administrator receives notice that a qualifying event has occurred. The individual then has 60 days to decide whether to elect COBRA continuation coverage. The person has 45 days after electing coverage to pay the initial premium.
The clock starts no later than Dec. 15 for Satby to elect coverage under COBRA. However the election period runs to at least Feb. 1st and no later than Feb. 15. During that period, Satby can elect coverage effective Dec. 1 as long as the payments come in. If Satby elects COBRA, Satby is ineligible for the Exchanges until the 2014 open enrollment period. The reason to go this route would be to cover any extreme outlier situations such as Satby getting hit by a bus on Dec. 17th. It is a pure adverse selection risk play. If Satby makes it to Dec. 22nd without any major medical expenses in January, the smart play is to get subsidized Exchange insurance. It is a free option so it would be a smart one to take to get de facto coverage for the month of December for free.
The cost is a roughly one week at the end of December where Satby would have already selected Exchange Insurance. If she had been hit by a reindeer on Christmas Eve, she would lock into COBRA for the year or at least be subsidy ineligible even after she signed up for Exchange insurance.