3 Options If You Lose Job-Based Health Insurance
Ending a job for any reason can be stressful. Whether you quit or get let go, there are sure to be things weighing on your mind.
While losing your job-based health insurance can be a scary thought, there are numerous options available to ensure that you don’t have to forego insurance altogether.
Option 1: COBRA
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a law put in place by the federal government for employees that have quit or been let go. It entitles them to a temporary continuation of coverage under their former employer’s health insurance.
Here’s what you need to know.
If your former employer has 20 or more employees, you will typically be eligible for COBRA. The administrator is required to advise you of your eligibility for COBRA as soon as you resign or are fired.
Under COBRA, you are entitled to 18 months of extra coverage after your job-based plan ends. This can be a great option for some people. However, it typically comes at an increased personal cost than what was paid previously.
Depending on your income level , you may be eligible for additional benefits like Medicare and Part B.
Option 2: Find a plan through the health insurance marketplace
In previous years, if you quit or lost your job you had two realistic options for health insurance. To get continuation of coverage through COBRA or go without until you found yourself back on a health plan with a new employer.
Enter, Obamacare! Also known as the Affordable Care Act (ACA). Obamacare has shaken up the industry and introduced a second option for those looking for coverage.
Under the ACA, those that quit or lose their jobs are given a special window to shop for a new plan through the health insurance marketplace.
Here’s how it works.
- Typically, once you quit or are let go you will be notified by your health plan administrator that your coverage is ending. At this time, you will be granted a 60-day window to shop the healthcare marketplace.
- Once you create an account, you will be able to browse all the available options. Even if you are happy with your current health plan, it pays to shop around.
- If you do opt to continue your existing coverage through COBRA, the special enrollment period will close. If you do want to shop for coverage again, you will have to wait for the open enrollment period. In the event that your COBRA coverage ends, the 60-day enrollment window will open again.
- This is also a great opportunity to check whether your income level entitles you to discounts on your premiums. You will receive this information when you apply for a plan. You will also find out your eligibility for programs like Medicaid and CHIP (Children’s Health Insurance Program).
Option 3: Forego Health Insurance
Under the ACA, all citizens are required to hold a minimum level of coverage known as the ‘individual mandate’. All health plans sold after January 1, 2014, are ACA compliment. These include most job-based cover, individual major medical plans (including Obamacare compliant plans as well as grand-fathered and grand-mothered plans) TRICARE, Medicare, most Medicaid plans and CHIP.
Along with the risk that comes with being uninsured, those not meeting the mandate are liable for a fee. These include people suffering financial hardship or those who live in an area without multiple insurance providers in the market. The good news is this fee has been repealed and will no longer apply come tax time 2020. Regardless, opting to forego health insurance entirely is a huge risk and not one that should be taken lightly.