FAQ: When Should I Sign Up For COBRA, Part 2

One of the most often asked I get during COBRABusters workshops is if someone should wait until close to the 60 day deadline to make a decistion about COBRA coverage.

There are three important reasons why you shouldn’t delay.  Each reason is an opportunity cost. This post deals with the second costly reason and opportunity cost.  If you did not read the post about the first reason, you can find it here.

The second reason is this:  Chances are good, it won’t get there in time. It is highly risky to wait close to 60 days to elect COBRA as your COBRA election must be received by the 60th day.

If you wait until the 58th or 59th day, then you better overnight the form at your own expense because if you don’t have a delivery/receipt confirmation by overnight delivery or certified mail then it is your word vs. your COBRA administrator’s word whether they received it within 60 days.

So you’ve blown some extra cash in overnight mail and delivery/receipt confirmation, just to prove somebody received it.

In the years I’ve been advising people through the COBRABusters workshops, I can recall several instances where someone was denied COBRA because their COBRA administrator claimed they did not receive the check and the ex-employee had no documented proof otherwise.  If your COBRA administrator takes a hard line on this, you could be denied COBRA, which for adults with pre-existing conditions is the only coverage option.

Risking insurability  is the second reason why you should not delay your COBRA decision, but the third reason is potentially more expensive than reason one or two.