FAQ: When Should I Sign Up For COBRA, Part 3

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 third and most costly reason and opportunity cost.  If you have not already done so, you can read here the posts about the first reason here and the second reason here why you shouldn’t delay your COBRA decision.

The third reasonwhy you shouldn’t delay is something I see over and over again with jobseekers.  About 55 days after termination is usually when when many people worry about COBRA.

But 55 days into a job search (with no or little income coming in) is exactly when a job searcher should really have their job search ramped up, with a fine-tuned resume or resumes and cover letters, business cards,  their target companies and positions identified, they should have developed and mastered their thirty second commercial, answers to interview questions, etc.

The first one or two weeks into a job search is exactly when you should develop a new personal  budget, determine what they can do to reduce their cash outflow, and  make their decision about your medical insurance.

Even if you don’t have to implement the decision until later, at least you have resolved the issue in your mind (and your spouse’s mind).   Making a healthcare decision right away eliminates stress and lets you focus 100% on your job search/marketing campaign starting in the second month. 

Every month you’re unemployed is another month in which you have to pay their own health insurance premiums, vs. landing a job with an employer that will pay your health insurance premium for you.   This represents a huge opportunity cost.

As a job seeker, you are conducting a vital marketing campaign to help win not just any old job, but “the job” that you really want and are passionate about, and not the job that you have to accept to pay the bills.

Every day in job search mode is a day with big opportunity costs.  Not only are you not earning an income and paying for your own insurance, but you are expending a tremendous amount of mental and emotional energy.  There are few things more stressful and exhausting in life than being out of work and searching for a new job.  And for every day someone you are out of work,  your job search is a day longer, and the days quickly stretch into weeks/months/and even years.

I know first hand and from the folks that I talk to that the emotional and mental toll of a job search on families and marriages is tremendous.  The longer you’re unemployed, the harder it is to explain your employment gap to a potential hiring authority, recruiter or referral source.  And regardless of your past career successes and qualifications, the longer you are in the job market, the less desirable you are perceived vs. other people in job search mode that are competing for the same job.

In today’s lousy job market, there are hundreds if not thousands of qualified candidates for every job opportunity that is posted.  And the same goes for the “hidden job market” of jobs that are only accessed through referrals and networking.   The longer you are out of work, the less likely you are of even being referred for these hidden jobs.

Worse yet, the longer you are out of work, the more likely you are to take any old job, not the job yo really want.  Unfortunately, this often leads to a second, more costly, and more difficult to explain job search, within a year or less of accepting that “any old position.”

In summary, the third reason to make a decision about COBRA as soon as possible is that as a job seeker,  you are in competition for the same coveted few positions as  perhaps hundreds or thousands of  other job searchers.  If, at 55 days into a job search, you are wastin your valuable time exploring options and applying for coverage or filling out and overnighting your COBRA election forms,  while your competition is working hard  to build their networks, meeting with potential referral sources, and interviewing, who is likely to get hired first?  And who is likely to earn income first and have their insurance premiums paid by their new employer?

Just like the fighter that lets down his right guard for a split second in the tenth round and gets TKO’d by their opponent, or the golfer that took his eye off the ball before making contact,  the job searcher that delays a COBRA decision until right before a deadline gives their job competition a huge advantage over finding a job and getting hired.

The mental and emotional toll from even a short job search on an individual and their family is huge, and missed opportunities in a job search can often be traced back to lack of focus and not taking action. And with a little soul-searching, perhaps being reluctant to make decisions about COBRA is an indicator of a tendency to avoid making other decisions and taking action.

If this sounds like someone you know, please forward this post to them.  Make decisions quickly, implement your decisions when it benefits you most.  Stay focused on your goal and devote your talents and all your energy towards  reaching your goal.   Avoid procrastination and anything or anyone that diverts your attention on reaching your goal.