Leaving a job can be stressful, no matter the circumstances. For many, it’s a season of uncertainty and questions, including “What am I going to do for health insurance?” Going without isn’t a good option – what if something happens?
This is where The Consolidated Omnibus Budget Reconciliation Act (COBRA) comes in. Under this law, workers and their families have the right to continue their health insurance coverage after leaving a job. This means you’ll still be allowed health benefits provided by your group health plan for a limited amount of time, whether you left your position voluntarily or involuntarily, or are experiencing a major life event.
But is COBRA always the best choice? Let’s take a look.
Is there a better option than COBRA?
While COBRA is a convenient way to continue coverage, for many people, it’s just not an option. It’s a short-term fix, lasting only up to 18 months. On top of that, it can be expensive – since your previous employer no longer contributes, the entire premium amount becomes your responsibility, as does COBRA’s 2% administrative fee. This means you’ll be paying up to 102% of what your premium used to be. The average monthly COBRA premium can cost between $400 to $700 per person. If you are also covering your family, it can add up.
Fortunately, you have other health coverage options besides COBRA.
Private health insurance
You can purchase a health insurance plan directly from a private organization or agent. This option is typically better for those who need fuller coverage and who don’t have a limited budget – although it’s often not as expensive as COBRA. Private health plans are sold outside of your state or federal Marketplace, and coverage may vary depending on what they offer.
These plans typically include some form of coverage for preventive care as well as services for pre-existing conditions. Unlike short-term options, private health coverage can be renewed if you find that your plan is working well for you, though premium and deductible rates can change.
Medicaid is an insurance option created for those with limited income. Since some states have their own Medicaid requirements, eligibility varies by monthly income, the size of your household and more. Also, you can apply to enroll in Medicaid at any time – there is no annual enrollment period to meet. You can apply for Medicaid through the Health Insurance Marketplace or your state’s Medicaid agency.
Can I use the Marketplace instead of COBRA?
If COBRA doesn’t work for you, the Health Insurance Marketplace is a great health coverage option for both individuals and families. Many states run their own health exchanges where you can shop, compare and enroll in a plan that works best for you and your budget. If your state doesn’t have its own Marketplace, you can use the federal government Marketplace.
When can you enroll? Though it varies by state, you are usually eligible for a 60-day Special Enrollment Period triggered by loss of job-based coverage, beginning either before or after this qualifying event.
Having some type of health insurance coverage is important
Health, like so many other things, can be very unpredictable. A good health plan offers peace of mind and more. Whether through COBRA, a private health plan or another option, quality coverage ensures you’re being taken care of in all the ways that count, in a way you can afford.
Have more questions about your individual health insurance options?
Our experts will help you find a health plan you’re confident in – no matter your situation.