Going Down the ACA and COBRA Insurance Rabbit Hole


Mr. Groovy and I are moving into uncharted territory—in 2017 we will no longer have employer covered health insurance. We’re each eligible to continue employer coverage through COBRA, but we’ll roll the dice and enroll in Obamacare under the Affordable Care Act. However, we have little idea what that will look like. I share our decision-making process with the hope that it will help someone. I’m no Obamacare expert—I don’t think anyone is given how often the rules change—but please do your homework before making any choices about your own health care coverage.

What is COBRA?

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, which went into effect in 1986. COBRA provides a set of federal health coverage provisions giving certain former employees and family members the right to extend health coverage from a group plan, after separating from a position. COBRA coverage is offered based on a qualifying event.

What is a qualifying COBRA event?

For the purpose of early retirement—or retiring before Medicare age (65), the major qualifying event for COBRA is job separation. If your employer falls under COBRA rules, you qualify for coverage if you quit, or if you are terminated (except for gross misconduct). Spouses and dependents may also be eligible for coverage.

For more information about COBRA see the United States Department of Labor website.

What is a qualifying life event for ACA purposes?

Anyone may purchase an ACA insurance policy during the open enrollment period. Outside of open enrollment, you must have a qualifying life event. Qualifying life events include:

Job loss (for any reason)

A move out of your zip code or county

Birth of a child

Marriage or divorce

See here for a list of all ACA qualifying life events.

When a COBRA qualifying event and an ACA qualifying life event cross paths

I retire from work on October 14. I’ve already received my COBRA election notice. Under the rules, I have 60 days to complete and return the enrollment form. Subsequently, I have 45 days to pay the premium to activate my coverage. In early December I’ll elect coverage—but I won’t complete the payment process. Mr. Groovy will do the same. By electing COBRA, the option is kept alive for both of us—should we retroactively need insurance. Open enrollment begins November 1, for ACA coverage starting in January. Our current employer health insurance ends this month. If some horrible accident or medical condition befalls us between October 14th and December 31st, we pay for the policy. Yes, unbelievably, COBRA may be elected retroactively.

COBRA costs approximately $1400/month combined for both of us to keep our current employer health insurance. That’s $16,800 a year. ACA  costs as low as $0 (yes, zero dollars) a month with a $12,670 deductible. A high deductible health plan  (HDHP) with a Health Savings Account (HSA) costs $99/month with a $13,100 deductible. To calculate ACA costs I’ve applied 2016 rates to projected 2017 income—we don’t yet know the 2017 rates and plans. We do know we’re eligible for Premium Tax Credits (PTCs), or subsidies, to keep our monthly premium costs low. Since we’re both healthy, ACA is the clear winner.

When 2017 ACA plans roll out we’ll run the numbers on various Blue Cross and Blue Shield of North Carolina (the only ACA insurer in our county) plans and pay close attention to the benefits. We want to choose a plan with an HSA but I seriously doubt one will be offered in 2017, which is a disappointment. Contributing the maximum dollar amount to an HSA would help with future medical bills and premiums. It would also reduce our income by $8,750 for Obamacare purposes (and thus, increase our subsidy). We may go with a Silver plan since those are the only ones that offer cost sharing reduction subsidies (CSRs). CSRs lower your medical bills, while PTCs lower premiums.

It’s very important to note—once you elect COBRA coverage (and activate it by paying your premium) you are no longer eligible to enroll in an ACA plan based on a qualifying life event. It’s essential to understand that you must be able to afford making consecutive monthly COBRA premium payments until the next open enrollment period. Stop paying, and you risk going without insurance and perhaps facing an Obamacare penalty. Keep this in mind if you are downsized from a job. Some employers offer three months of COBRA payments to sweeten the deal—but be very careful about accepting “free money” because it could cost you dearly.

A note about dental insurance

You may be aware that no ACA compliant health insurance plan may exclude you from coverage due to preexisting conditions. You may also know there are no waiting periods imposed for treatment. And you may know you can’t be turned down for insurance due to a gap in coverage—although you may owe the penalty. But here’s something you may not know—dental plans for adults do not fall under ACA rules and insurers may impose waiting periods for treatment based on a gap in coverage. I learned this from the medical secretary at my dentist’s office and later confirmed it with Blue Cross/Blue Shield.

Many individual dental insurance plans employ the 63-day rule. This means if you have a gap in coverage of 63 days or more, you may enroll in the plan—but you may need to wait six or twelve months before benefits apply to most procedures. But don’t worry—when you renew your dental plan in the second year you’ll be covered for treatment immediately! They’ve got your back!

Luckily for Mr. Groovy and me, we can sign up for our employer dental and vision plans via COBRA. We may elect these policies, separate from COBRA medical coverage. Our COBRA dental premiums are similar to those on the individual market, with twice the dollar amount of benefits.

Our current game plan

  1. Mr. Groovy and I will each sign up for COBRA dental and vision insurance through our respective employers. The policies will cost approximately $100 month combined and the coverage will take us into 2018.
  2. We’ll each sign and submit the COBRA election form for medical coverage but won’t pay the premium. As I mentioned previously, the regulations give you 60 days to elect coverage and then another 45 days to pay the premium. We only intend to pay the premium if (I can hear my mother saying “God forbid”) we’re faced with some horrible health catastrophe before January 1.
  3. We’ll both sign up for Obamacare health coverage during the 2017 open enrollment period.

Final thoughts

No amount of preparation will shed light on every facet of the new health insurance paradigm. Think of health insurance in the way we’ve grown accustomed to thinking about home insurance—you won’t know how good your policy is until you need to use it.

One way of avoiding ACA entirely is by joining a health care sharing ministry (HCSM). These are becoming increasingly popular. HCSMs are not insurance plans, but rather group sharing arrangements that fall outside of the ACA. Many revolve around religious beliefs—but not all of them do. If  you join a qualified HCSM (one recognized as such by the federal government) you receive a form to file with your taxes making you exempt from Obamacare. HCSMs can be a good option under the right circumstances.

Other ways to avoid ACA include:

Nothing beats the best advice I can offer, which is this—Don’t get sick!

What do you think? Will you take advantage of COBRA or Obamacare if you retire early? Are you already on Obamacare? Please share your thoughts and experiences, and correct me if I’ve gotten any of the facts wrong. My head is still spinning.

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  1. K

    Based on additional advice, I submitted a new application to see what would happen.

    Even though I’m eligible and enrolled in COBRA now, November 2016, assume I drop COBRA and get a short term policy to cover December.

    Then I can answer the ENROLLED in coverage question “NO”

    For this next question it is DNA because I did just quit it by not paying.
    Did anyone lose qualifying health coverage on or after 9/8/2016? Don’t select anyone who lost coverage because they didn’t pay their premiums.

    The result is that I qualify for $5K of credits, but I need to send in supporting documents before I can actually qualify for and use them. I really don’t have have anything that supports my own 2017 income assumptions.

    It’s all very confusing and still it appears to be a catch-22 with regard to COBRA eligibility and how the enrollment questions are worded. I would hate to start in on it and then get disqualified for the ACA and having given up my COBRA.

    The other factor is that maybe I’ll find something fun to do that pays real money and end up paying a lot for ACA coverage anyway.

    I’d like to see something official on this example from .gov – dropping Cobra in November or December and then enrolling fresh for 2017 as if the COBRA experience never happened.

    • Mrs. Groovy

      I don’t know whether the .gov site will ever be that forthcoming about COBRA.

      We still have not applied because we’re traveling without a secure connection at the moment. We’ll probably start an application on Thursday. So they asked if you lost coverage as of 9/8?

      Good luck with the new application. I think if you don’t like the results you might be able to delete it and start again. The entire situation is ridiculous.

  2. K

    Thanks MrsG.

    From your hub link this allies to my situation:
    Question Five: If someone voluntarily drops COBRA during an exchange open enrollment, are they eligible for subsidies in the individual marketplace?

    Per federal agency guidance issued April 21, 2014, during the exchange open enrollment, a person can voluntarily drop his or her COBRA coverage and (#1) obtain an exchange plan instead, even if COBRA has not expired. (#2) The individual also may be determined eligible for a subsidy in this case. (This result is possible because the exchange is hosting its enrollment season, and subsidy money that an individual might qualify for is therefore available to use to fund purchases.)


    I found (#1) true, that I can get ACA coverage. But even though I estimated 2017 income well inside the subsidy range, none were offered.

    This has to be burden for many of those newly unemployed in 2016 that initially chose COBRA and commenced paying for it. In my case, the ACA premiums for Silver and even Bronze would be about 15% of MAGI.

    My COBRA eligibility ends on Sept 30, 2017. I guess now that the ACA subsidy might kick in only for the balance of 2017 at special enrollment time in October.

    The costs of the transition from COBRA to ACA during open enrollment is not as transparent as it ought to be. Like I said, I was blind-sided by the premium estimates because the rules and pre-enrollment calculators do not call out the and nuances of this COBRA situation.

    It ought to be called out in big bright letters that (A) if you are paying for COBRA and (B) you are eligible to continue COBRA in 2017, then you won’t qualify for an ACA subsidy during your remaining COBRA-eligible coverage period.


    • Mrs. Groovy

      The rules are complex, convoluted, and change frequently. Interpretations also differ which is why I recommend calling healthcare.gov and if necessary, ask to speak with a supervisor.

      This looks like a good resource with current advice, webinars, etc. But check this question from 2015. In particular see the last sentence of the answer.

      Does an offer of COBRA coverage prevent someone from receiving a premium tax credit?

      COBRA is continuation coverage that is available to workers and their families after some circumstances makes them no longer eligible for the worker’s employer plan. The same rules that apply to people who are eligible for retiree coverage apply to people who are eligible for COBRA. Like retiree coverage, an offer of COBRA coverage does not bar someone from being eligible for premium tax credits. It is only a barrier to receiving premium tax credits if the person actually enrolls. During the marketplace open enrollment period, an individual enrolled in COBRA could drop that coverage and enroll in a marketplace plan with premium tax credits, if otherwise eligible.

  3. K

    I got a good COBRA deal this year from April until now. I thought I could get discounted ACA in 2017 via the open enrollment. It is true, that I can switch to ACA as of January 1, but it appears that since I still have COBRA available to me, that no discounts apply. I was very surprised. I thought maybe I did the application wrong and resubmitted it a couple of times with tweaks, but the answer is the same that having workplace coverage available, there are no ACA discounts. Comments?

    • Mrs. Groovy

      Did the application ask if you were currently on COBRA? The only way around it I can think of, and I’m not suggesting it, is to try to apply saying you are totally uninsured. You’d probably have to pay the Obamacare penalty at the end of the year. I just don’t know if they have any way to check on the veracity of your situation.

      Edit: I just found this:

      The rules seem very ambiguous to me and I think there’s a chance you might still qualify for the subsidy, even by voluntarily dropping your COBRA coverage. I recommend you do a little more research and then call healthcare.gov. The online application process might prevent you from getting a subsidy but I wouldn’t take that as gospel. If the person you talk with confirms you’re ineligible for a subsidy, ask them to point you to the exact rule, as written, that states this.

  4. I’m covered under the ACA. I’m young and healthy (other than pain issues) and make enough to not get a subsidy. I chose bronze and pay $160/month. It was definitely tricky when I lived in a different state, because so much with the ACA depends upon how your state chose to implement it. As a small business owner, I’ll hopefully be sticking with ACA for a long time.

    • Mrs. Groovy

      Our state didn’t go for the Medicaid expansion. And right now we only know of one insurer involved in ACA for 2017. Many people are going to be in a jam. I also doubt the insurer will renew in 2018 when it loses more money. It’s going to be a bumpy ride.

  5. If Hillary gets in I wouldn’t be suprised if we went to single payer as that is what she wanted in the 90s. The whole thing has been a debacle from the get go yet government knows best.

    Had a friend who had like 15 employees before ACA he could afford insurance and nice plan to cover them. Not any more all his employees had to go on ACA because the plan he was given was triple what he paid and less coverage.
    This wasn’t thought out very well and people should have seen that when Nancy said we have to pass it to see what’s in it.
    Of course you can’t promise people lower rates and at the same time tell companies they will make better profits.
    Another thing I would like to see is more churches and religous organizations offer health sharing.
    I’m not on ACA but I do have government healthcare and have had it for along time all it is managed care really.

    I had to go to the emergency room found out that for both my insurances my definition of emergency doesn’t fit there’s. Though the billing office of the hospital did send it back to the VA and they covered it the second time.

    • Mrs. Groovy

      Thanks for the thoughtful comment, Doug. I totally agree with you about Hillary’s agenda for a single payer system. In fact, I don’t think anyone in the federal government has been too unhappy about the horrible way Obamacare has been playing out. It just gives them more ammo to push for single payer. Hey, Mr. G and I are older. We’ll get more out of a single payer system than young people will. But who’s paying for it?

      I hear you about your employer friend. Many businesses have been affected. Dave Ramsey says on his show that his insurance for staff rose $1M. I know, no one feels too badly for him. But my job is a better example. My employer was recently reclassified from medium to small and suddenly they couldn’t afford the Cadillac plan we’ve been on for 11 years. It was a PPO with low co-pays and deductible – all employer covered. We have not paid one dime towards premiums. But now they just switched to an HMO with higher co-pays. It’s still a good plan and it’s still free for all employees but it’s not like the one we used to have.

      Mr. G’s government coverage was great – free for him and me. At one point I was covered under 2 policies.

      It boggles my mind that more people were not disturbed about Nancy’s comment. I mean really, this is how you pass a law?

      You mentioned the VA so thanks for your service!

  6. RETROACTIVE Cobra!! I never knew that. What a brilliant strategy to leverage your options. Great post! I’ve been thinking about HCSM’s, and plan on checking those out when we’re facing 10 years of private retiree medical insurance. Scary topic.

    • Mrs. Groovy

      The retroactive thing is not ideal. It’s questionable whether a policy would be viewed as active at the time it might be needed most, as in the case of an accident. There would probably be a lot of untangling to do after the fact. At least one good thing about retirement is having time to make calls (and linger on hold). Supposedly Hillary wants to lower the Medicare age to 55 which could be good for us. I see the entire thing moving towards single-payer government health insurance, which I believe was the goal to begin with.

  7. With all these animals like Cobras, Hippas, I feel the urge to pull the deranged orangutan back out of his retire early lifestyle for a few consultation sessions. But the bananas will bust our grocery budget and that just won’t sit well with Mr. PIE and his frugal ways. Thus, I turn to good blogs like this to expand my knowledge further.

    Yes, my head is bloody spinning also with which tactics to invoke regarding income estimations and timing of application for Obamacare. You explain it well but every body situation is quite unique.

    We plan to finish in mid 2018 and will go from two high salaries to pulling my pension and living from the taxable portfolio dividends and a bit of principal reduction from the old PIE swag bag of investments.

    I need fo read this post again and that one from Justin again otherwise my mad jungle buddy may be called upon to share his financial musings and healthcare subsidy wizardry.

    • Mrs. Groovy

      We may as well have a deranged orangutan in charge of the whole shebang! He’d do a better job!

      Let’s hope there are significant changes by 2018 and it becomes less tangled. Normally I’d suspect that it wont improve, but since insurers are pulling out, something’s gotta give.

      Yes, Justin has written some great pieces on this. For anyone unfamiliar, that’s http://rootofgood.com/

  8. I have worked for a couple of companies over the course of my career. I would get a COBRA packet from my former employer. It would collect dust for 2 months – then I would shred it and toss it.

    Thank you for writing this post. While it made me feel dizzy and make my head hurt, I did learn a lot from it.

    Based on the details you have provided, I would do exactly what you are planning on doing.

    Now I know what COBRA is and also how ACA can be leveraged prior to age 65.

    • Mrs. Groovy

      My head is still hurting, Michael. I couldn’t even write half of what I found or you’d want to bash your computer (tablet or phone) screen. As others have mentioned, I’m sure this is all bound to change by the time you need to think about it — except in the case of a sudden job loss where the COBRA deal might look sweet – just know it puts an end to ACA eligibility unless you’re in an open enrollment period. Thanks for commenting.

  9. Oh my goodness! I am not looking forward to figuring this out when the time comes. Thanks for the details and overview – I look forward to reading about how Obamacare works out for you guys.

    My mom has had COBRA coverage for a year (with many frustrations) and is switching to ACA this year, so it will be interesting to compare costs and coverage.

    If my husband stays with his current employer until age 55, they will pay our health insurance until Medicare kicks in. That is a huge benefit – and so many people tell us he should stay just for that. But it’s 13 years away. We only have this one life. I highly doubt he’ll stick around just for the insurance.

    • Mrs. Groovy

      I had COBRA coverage when I was much younger but relative to income, it wasn’t as expensive for me as it is now.

      Mr. Groovy was in the same position as your husband. Had he kept his NY govt job and retired now at 55, we’d have his NY State insurance plan which was excellent. But, 10 more years in NY, and at THAT job would have killed his spirits. I understand completely if your husband doesn’t stay 13 more years

      By the way this is a similar thought trend to what I’ve been reading about regarding jobs with student loan forgiveness. Sometimes it’s just better to aggressively pay off the loans than be tethered to a job.

  10. We joined Liberty Healthshare because ACA plans in my state are ridiculous. The cheapest ones were like $800+ per month (which is fine) but with a $13,000 family deductible and no dental. So it’s basically pointless. I hope you find the right answer for your needs and affordable options to choose from!

    • Mrs. Groovy

      Thanks for your input about Liberty, Holly. I know it’s one of the larger ones and I’d be curious to know how it’s been working out.

      $800 month for nothing – and this was supposed to make everyone’s lives better. It would be comical if it weren’t so sad.

  11. There are a lot of good tips here (in your post and the helpful comments). We’re happy to be covered by an employer plan right now. While I try to understand these types of options for when we do semi-retire, I’m also pretty positive that things are likely to change over the next few years.

    • Mrs. Groovy

      I feel the same way about Social Security benefits. I was starting to understand the way couples can make the most of it and then the rules changed. And I’m sure they will again, before we collect. Just keep in mind that activating COBRA ends the ACA qualifying life event. This could be important if you face a sudden job loss. Thanks for commenting, Harmony.

  12. This was a great overview and something that I may have to look into over the next few year. It’s amazing how complicated it is. It really shouldn’t be.

    Be careful if you go the HCM route, I understand the have a payout cap. So, god forbid, you get really sick, they will stop paying at some point. That’s exactly when you need them!

    • Mrs. Groovy

      Thanks, Jon. I agree about being careful with the HCMs (HCSMs). That’s why I mentioned they may be good under the right circumstances. In addition to caps they don’t seem to be good for people with preexisting conditions. But for young, healthy people who don’t want to pay the penalty? And who might want to say FU to Obamacare and the government? It could be a viable option. Personally, I don’t like the fact that with a few of the large ones, everyone has to publicly announce to the group members what procedures they want covered. And then someone sends you the check directly. Weird, huh? That’s one of the ways the HCSMs are able to make the distinction that they’re not in the health insurance business.

  13. Awesome overview, I love reading things like this which helps me think through how some of the important considerations would impact me. Granted things will change between now and then. Thanks for sharing your thought process in such a detailed manner!

    Sounds like a perfect and well thought out plan with regard to COBRA to keep “coverage” through the end of the year.

    The CSRs and the PTCs are where it gets real confusing. But basically you are expecting your income to be so low (well managed) to allow your premiums to be fully subsidized, so your only health care cost would be in the form of a deductible if you needed care. Sounds like a great option, even though the deductibles are outrageously high.

    It’ll be interesting to see how the plans shake out in 2017 (and every year going forward) given all the tumult with the exchanges and the managed care providers.

    Sounds like you are well prepared though!

    • Mrs. Groovy

      Thanks, Green Swan! Exactly – we’re expecting to manage our incomes to maximize the subsidies. One thing to note about the deductibles is that some plans have co-pays which state “before the deductible”. So if you have a $10K deductible but certain doctors or specialists are subject to a co-pay of $50 before the deductible, you just pay the $50. And the $50 goes towards your deductible. If the co-pay is stated as “after the deductible” then you first have to meet the deductible before the co-pay applies.

      The terminology is very tricky. There are co-pays, co-insurance, deductibles and cost sharing. The cost sharing subsidies (CSRs) can lower the others so it will definitely be worth looking into those plans. They’re only available with the Silver plans, which we weren’t planning to consider when we thought we could go with a high deductible health plan (HDHP) with an HSA. Those have mainly been offered at the bronze level.

  14. Greetings Goovy Freedomists! We just signed up for our new health insurance in Tennessee, and I’m still confused as heck. I tried to sign up at the HealthCare.gov site, but my application was denied. (I think I tried to apply too early; I was beyond 62 days from being without health insurance.)

    A few days later, I tried to sign up via EHealthInsurance.com and gave up, but they called me and helped me get my application through the HealthCare.gov site. (I think that’s what happened?) My wife and I got approved for health insurance, but we’re supposedly too poor to get our son on the same policy. Our 2016 income of $44,000 is considered so low that our son is on the CHIP program which includes not only health insurance but also dental and vision insurance.

    I have not seen any monthly rate for our son, and the policy for my wife and I is $40.28 a month. We got a bronze policy with a high deductible. We view it as a catastrophic plan just in case something bad happens. One thing is for certain: this stuff is confusing as all get out.


    Great reading for those interested…okay maybe not so great:

    Cover Kids Income Guidelines:
    (It appears that our family of 3 would have to earn $50,400 to be ineligible for Cover Kids.)

    Got this one from Root of Good: http://kff.org/interactive/subsidy-calculator/

    • Mrs. Groovy

      Oh, Ed, you’re making my head spin again!

      The 62 day thing is a hold over from the HIPPA rules. I don’t know if you recall how you used to need a “certificate of coverage” as proof that you didn’t have a break longer than that. Under Obamacare that doesn’t apply — I believe up until recently employer group plans were allowed to apply it but that’s been phased out. The Obamacare rule is a break in coverage of 3 consecutive months costs you the penalty. For you and your family, I’m assuming you needed the coverage for October, November and December.

      EHealthInsurance.com is really good but I’m glad they helped you with Healthcare.gov. When I called Blue Cross to inquire about an individual dental policy I asked if we could file for ACA medical directly with them for 2017. They said yes, but not if we’re eligible for subsidies.

      Thanks for the links. The Kaiser Foundation is a great site. Those folks have really taken the time to do the research.

  15. Louisa

    Thank you for outlining this subject so carefully!
    Check if you need actually need dental coverage.
    Paying for two annual check-ups and cleanings out of pocket might be less expensive than the premiums.
    “Health” insurance might cover catastrophic dental events that are handled through surgery, (like getting hit in the mouth and having your teeth knocked out). But it wouldn’t cover routine fillings, and presume not dentures.
    And do you need vision coverage?

    • Mrs. Groovy

      Thanks for reading and commenting, Louisa!

      You’re right that two annual checkups/cleanings would probably be less expensive than the premiums. But just add in an extra x-ray or two, or a cavity, and the coverage is worth it. I’ve had so much dental work that I feel more comfortable keeping the insurance. Mr. Groovy does too. And I wouldn’t want to count on being covered by health insurance for dental surgery – you don’t know what these plans will allow. And then there’s that large deductible.

      The vision coverage is really inexpensive, like $6 month each. I checked with the optometrist we last used, and an exam for people with no insurance is $99. Plus both our plans cover many types of glasses for free, or almost free. The thing with COBRA is that you only have that initial window to decide. We can cancel down the road any time if we feel we’re not getting our money’s worth.

      • Louisa

        Thanks for the summary of your thinking on dental costs. Envious of the vision coverage! Our employer hasn’t offered that for many years, and we certainly would have made use of it.

  16. The federal ACA marketplace is really confusing. That said, it’s a heck of a lot better than trying to buy insurance in the open market (due to the subsidies) or not having coverage at all.

    There’s a lot of confusion and the websites don’t always exchange information properly…that meant we ended up paying 3 months worth of premiums last December (last month BCBS, first month of UHC twice.) It all worked out in the end, but not everyone can afford paying 3 months of premiums in December even if it means lower expenses for January and February.

    We went with Blue Cross in 2015, and then switched to United Health Care because the costs for equivalent coverage had gone up so much.. We’ll likely have to go back to BCBS due to UHC dropping out, and I dread seeing the numbers.

    • Mrs. Groovy

      That stinks about overpaying but I’m glad it all worked out. You’re right about everyone not being in the position to do that.

      Yes, the UHC plans looked more reasonable than BCBS for 2016. I believe BCBS is going up 18% in 2017. With all the trouble they had administering the plan, they were able to make a case for needing to hire more staff. I’m sure that’s true given that thousands of new people will sign up in 2017.

  17. I remember well the few years between the time I retired and the time I became eligible for Medicare. Plus I was reminded of it just the other day when posting our year to year expenses, because Medicare is one of the reasons my costs went down.

    I used coverage from the ACA marketplace and yes, it was terribly confusing. Even worse, when I did get Medicare, I cancelled my ACA policy directly with the insurer and had to endure months of problems because apparently you are supposed to cancel your policy directly with the ACA marketplace.

    Anyway, it sounds like you’ve got a good plan going, and that’s very interesting to know about the dental coverage gap.

    • Mrs. Groovy

      That’s a good tip about cancelling through ACA and not directly through the insurance company. Thanks for mentioning it, Gary. I have some experience with Medicare since I’m handling my aunt’s medical policy. She was on an Advantage plan which was great for her in Florida, since all the doctors she used were on it. But she couldn’t use it in North Carolina and my brother and I had to research policies. We decided that original Medicare with a supplement was better. The whole Medicare thing is very complicated too.

  18. If you sign up for COBRA but don’t actually pay for it, do you have a penalty for not having coverage for the entire year?
    It’s awfully confusing, but I think that since you have a qualifying event you can sign up for an ACA plan to get you through the end of this year and avoid COBRA entirely. For us, the ACA was much, much less expensive than COBRA.

    • Mrs. Groovy

      It’s an interesting question, Julie. The penalty doesn’t apply to us because you are allowed a short gap in compliant coverage of less than 3 consecutive months in a row. Even one day in a month counts as a month. Since we have insurance in the month of October, we only have a 2 month gap for November and December. And you are correct about us having a qualifying event to sign up for ACA to get us through the end of the year. But it’s expensive based on our 2016 wages. And we’ve been good about getting some medical appointments in before retiring so we feel OK about not having it.

  19. Oh gosh. This insurance stuff is complicated! The law in this area is so new and ever changing that it’s difficult to keep up. I know alot of lawyers are getting very interested in this area.

    • Mrs. Groovy

      I can see why lawyers would hop on the bandwagon. There are insurers that are deliberately not following the rules and not covering treatment that is supposed to be covered. Or, they’re hiking up prices on co-pays for prescriptions to virtually eliminate the treatment of diseases associated with them. It’s a mess. Thanks for commenting FP.

  20. I would be lying if I said my eyes didn’t have a glazed over look thinking about this. Trying to understand my insurance and my husband’s insurance (he JUST got prescription coverage!) is frustrating enough. This seems like a whole different level of overwhelming. However, if anyone can navigate the waters, you can. And if I ever pull the pin, you can bet your blog will the be the FIRST resource I check.

    When my mom retired early, she did COBRA. And I remember that working out well for the whole five minutes she stayed retired 😉 Now she’s finishing up job #2 for pension #2 😉 But the rub is that she’s almost 70 and still working.

    • Mrs. Groovy

      You and me both (eyes glazed over). I’ve been examining the topic for a few weeks and the part that’s torture is – just when you think you understand it, you realize you don’t. I didn’t realize your mom was still working at 70. That’s fantastic that she’s able to but I just hope it’s by choice.