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Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Can I Drop COBRA for Subsidized Coverage in Exchange?

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Question: I recently quit my job. I enrolled in a Covered California plan with premium assistance. My old company offered me COBRA coverage but it’s much more expensive. Does an offer of COBRA coverage someone from receiving a premium tax credit?

Answer: An offer of COBRA coverage does not prevent you from being eligible for premium tax credits. You could not receive premium tax credits if the you had actually enrolled in COBRA, then dropped it in favor of Covered California coverage. If a former employee actually enrolls in the COBRA plan, it is considered minimum essential coverage and becomes a barrier to receiving premium tax credits. People who are enrolled in COBRA coverage generally must wait until the marketplace open enrollment period to drop that coverage and enroll in a Covered California health plan with premium tax credits.


It may have been the case, but if you speak to the majority of reps at Covered CA, they do NOT know this. I’ve been told, clients have been told, you enroll in COBRA, that’s it, you’re out until open enrollment. This would have been SO helpful for so many, it should be more widely circulated. Particularly amongst the CC member service team.

You can ride the COBRA for 60 days but, beyond that an individual would be shut out until open enrollment if they tried to drop the COBRA thereafter. This has always been the case. It’s all about the 60 day window. They don’t care what you have in between. :)

I recently found out about something, and most of the CC geniuses don’t even know this. You can enroll in COBRA for a month or two, if you cannot be without coverage, then go into CC. Basically you have to answer that you do NOT have any other offer of coverage on the app, because if you do indicate you enrolled in COBRA, you’re out, as you know. I spoke with a rep who justified it by saying that by the time they DO enroll in a CC plan, they won’t have COBRA, that’s why you can say no. REALLY?

Here’s the link to the page I was shown: http://www.coveredca.com/individuals-and-families/special-circumstances/cobra/ Scroll down a ways until you hit “Using COBRA Until your Covered CA plan Becomes Effective”—mind blowing.

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