Does the following COBRA insurance strategy work?

Question

All,

I have a child with a medical condition that is not covered under my current insurance plan because it comes from a self-insured, out-of-state employer. (Don't argue that fact - I've checked the law, and they don't have to pay).

However, employer-based group insurance issued by an in-state employer is required to cover this condition. So, I developed the following strategy and wanted to know if it would work:

1) Wife gets job with an in-state employer that offers group health to child. This shouldn't be THAT hard to find.

2) Wife keeps job long enough to get coverage (usually several months to a year).

3) Wife quits.

4) We buy COBRA for child for 12-18 months, afterwhich we should no longer need treatment.

5) If treatment looks like it will be needed longer, repeat steps 1-4.

If I read the law right, this works. In fact, it looks like I don't even have to get COBRA for the wife - just for the child. Is there a flaw in this plan (other than high COBRA premiums)?

Answer 1

I won't argue that fact.  If the employer is self-insured, that means, there ISN'T an outside medical policy in place, so they aren't SUBJECT to any insurance rules.   You don't HAVE employer based group INSURANCE.  

You'll have to buy cobra for the child and the wife.  AND, usually with a pre-existing, unless the child has a current certificate of credible coverage, there will be an 18 month wait before the child's pre-existing conditions are covered.

Worst case - after wife's insurance kicks in, you still have to wait 18 months before the pre-existings are covered.

Answer 2

Wouldn't it be easier for your wife to just keep the job for 12-18 months- then she would be making money, and you wouldn't have to pay high COBRA premiums?

Answer 3

It's legal, but completely unethical.

Answer 4

It works.