Do deductibles carry forward when switching to COBRA?
Asked by: Prof. Jesse Schmidt | Last update: December 10, 2025Score: 4.5/5 (46 votes)
Does my deductible start over when I switch to COBRA?
Yes- the deductibles and OOPMs reset at the same times as the employee plan. COBRA is just an extension of the plans that are offered to the employees- if the company switches carriers or plans or does open enrollment for the employees, that will also trigger those changes for COBRA participants.
What happens when you switch to COBRA?
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, ...
Do deductibles carry over when switching insurance?
If you cancel your current health insurance policy and purchase a new one, the deductible does not carry over to the new insurance company. Instead, you will be responsible for meeting the new policy's deductible before your insurance provider starts paying for your medical bills.
What happens to your health insurance deductible when you change jobs?
Does my deductible start over if I change jobs? Unfortunately, you can't transfer the deductible amount you have paid into your new health insurance plan. Your deductible will start over when you change jobs and enroll into your new company's insurance plan.
COBRA Insurance | What You Need to Know
How long can you use cobra after leaving a job?
COBRA coverage lets you pay to stay on your job-based health insurance for a limited time after your job ends (usually 18 months). You usually pay the full premium yourself, plus a small administrative fee.
How does deductible carryover work?
Any amount that you pay toward your deductible in the fourth quarter of your plan's year is credited for the current year and the next year. This may help you save money when you need services near the end of the year.
How much is cobra insurance?
How much does COBRA insurance cost? COBRA insurance typically costs 102% of the total health plan premium. This includes both the employee and employer contributions, along with a 2% administrative fee.
What is the major medical deductible carryover period?
The major medical deductible carryover period normally applies to expenses incurred during the last three months of the plan year. is the principle under which the company insures only part of the potential loss, the policyowners paying the other part.
How do deductibles work when you have two insurances?
If both plans have deductibles, you'll have to pay both before coverage kicks in. You don't get to choose which health plan is primary, meaning the one that pays first. You don't get to choose which insurer will pay a certain claim.
What is the COBRA loophole?
If you decide to enroll in COBRA health insurance, your coverage will be retroactive, meaning it will apply to any medical bills incurred during the 60-day decision period. This loophole can save you money by avoiding premium payments unless you actually need care during this time.
Is COBRA cheaper than marketplace?
Both COBRA and ACA Marketplace plans have their advantages. COBRA lets you keep your exact employer-based plan but is often more expensive. ACA plans may be more affordable, especially with subsidies, but require choosing a new plan. The best choice depends on your financial situation and healthcare needs.
Does COBRA kick in immediately?
An employee eligible for COBRA insurance must opt for it within 60 days of their employer-sponsored insurance termination date. The coverage starts the day the previous coverage ends.
Can you deduct COBRA premiums from your taxes?
Are my COBRA premiums deductible? Yes they are tax deductible as a medical expense. There isn't necessarily a “COBRA Tax Deduction”. You can only deduct the amount of COBRA medical expenses on your federal income tax in excess of 7.5% of your Adjusted Gross Income and then only if you itemize deductions.
Why is COBRA coverage so expensive?
COBRA coverage is not cheap.
Why? Because you're now responsible for paying your portion of your health insurance: The cost your employer contributed to your premium, in addition to the 2% service fee on the cost of your insurance.
Does my deductible start over?
When you reach the total deductible amount, your health plan will start to pay a portion of certain health care services for the rest of the plan year. Keep in mind, your plan's deductible starts over at the beginning of each plan year.
When I go on cobra, does my deductible start over?
Because your coverage is “continued,” your deductible won't reset until the new plan year, etc.
Can medical deductions be carried forward?
You can include only the medical and dental expenses you paid this year, but generally not payments for medical or dental care you will receive in a future year. (But see Decedent under Whose Medical Expenses Can You Include, later, for an exception.)
What happens when you max out your deductible?
Once you reach your deductible, your insurance starts to help with the costs of services you're eligible for. But once you reach your out-of-pocket maximum, your insurance pays the total cost for all covered services.
What are the disadvantages of COBRA coverage?
- COBRA can be expensive, especially compared to the premiums you were paying before your qualifying event. ...
- COBRA does not apply to all employer-sponsored health plans—in particular, those organizations with fewer than 20 employees may have no requirements. ...
- Even if you get an extension, COBRA is only temporary.
How long can I stay on COBRA?
While COBRA is temporary, in most circumstances, you can stay on COBRA for 18 to 36 months.
Are there alternatives to COBRA?
Instead of enrolling in COBRA continuation coverage, there may be other more affordable coverage options for you and your family through the Health Insurance Marketplace, Medicaid, or other group health plan coverage (such as a spouse's plan) through what is called a “special enrollment period.” Some of these options ...
How do deductibles work with Cobra?
Your Insurance Deductible Will Rollover When COBRA Insurance Is Elected. Your election of COBRA is a continuation of the exact same health plan you had through your employer.
What happens to my deductible if I switch insurance?
What happens to my deductible if I switch plans? If you switch plans mid-year — due to a job change, for example — you'll typically find that you start over with a new deductible on the new plan.
What is a deduction carryover?
Carryovers. Some deductions are eligible for “carryover.” This means that if you couldn't use the full deduction amount this year, you may be able to carry the remaining portion over to future tax years. Some examples include: Capital losses.