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- You can choose to opt into COBRA insurance, which is a federal law that extends your employer-based health insurance while you are switching jobs
- You can choose a health insurance plan through the Obamacare Health Insurance Marketplace
- You can shop for a short-term or private health insurance plan as a safety net to cover your basic health care needs
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A Closer Look at COBRA
The Consolidated Omnibus Reconciliation Act of 1986 provides health benefits to employees, spouses, and their dependents after they leave their jobs. The law allows employees to keep their group health plans between 18 and 36 months after they lose their employer-based coverage.
The law applies to any local or state government plans and any plans obtained through the private sector. Under the law, you will receive benefits that include outpatient and inpatient care, doctors’ visits, prescription drug coverage and other major medical benefits. However, there is no life insurance coverage under COBRA.
The law states that if your former employer had 20 or more employees in the past calendar year, then you qualify for your employer’s group health insurance plan after leaving. Once you receive a notification from COBRA, you have 60 days to decide if you want to opt into the program.
The cost of COBRA includes a 2 percent administration fee plus the costs of your former employer’s contributions. COBRA also requires you to pay your entire premium.
If you’re looking for a new private health insurance plan, try our free comparison tool. It’s a great way to get quotes from your state’s leading health insurance providers all in one place. All you need is your zip code and some basic info to get started.
The Affordable Care Act and the Healthcare Marketplace
The ACA allows you to shop for medical coverage on your state’s healthcare marketplace, also known as a healthcare exchange. Since losing your job or changing jobs is a qualifying event, you enroll in a plan on the marketplace outside of the open enrollment period.
The marketplace offers competitive policies with affordable premiums. Health insurance through the Marketplace is open to all Americans, and you cannot be denied based on pre-existing conditions.
According to Obamacare Facts, the only factors that affect your premium payments are income, geography, tobacco use, and the size of your family.
You can freely shop your state’s marketplace for insurance companies that participate in your area. In many cases, you may qualify for subsidies that help you pay the cost of your health insurance and deductibles if you qualify as low income. Since you are switching jobs, you may have little to no income, so you may qualify for tax credits that help you pay some of the costs.
Before you begin shopping for a new plan on the Marketplace, take into consideration how much you have paid toward your deductible in your employer-based plan. If you have paid a large amount of money toward your deductibles, you may want to keep your current plan until you find or start a new job.
Remember that you can keep your past employer-based group plan under the laws outlined in COBRA.
Shopping for a New Plan
Statistics show that nearly 50 percent of all Americans, about 177 million people, receive their health insurance from their employers, according to Time.com. Therefore, if you change jobs or lose your job, you must obtain coverage according to the laws under the ACA. However, the ACA allows you a two-month window to go without health insurance before the government penalizes you when you file your federal income taxes.
Remember that a job change or job loss is a qualifying event, so you can enroll in a plan outside the open enrollment period.
This provision gives you some time to do some side-by-side comparisons on available policies in your state’s healthcare marketplace and private policies.
If you lose your job through no fault of your own or you planned the job change, having no job at any time feels like jumping out of a plane with no parachute. If it is a planned event, you must have an exit strategy in place. That strategy must include your health insurance, and you must address the gap in your coverage.
Although the Affordable Care Act addresses many issues surrounding gaps in your health insurance, it is not your only option. Several short-term health insurance policies exist that can keep you from incurring hefty medical bills during your job change.
Enter your zip below and discover all your health insurance options with free online quotes!
[su_spoiler title=”References:” icon=”caret-square” style=”fancy” open=”yes”]
- https://www.medicareinteractive.org/get-answers/medicare-and-other-types-of-insurance/understanding-cobra/what-is-cobra
- https://www.dol.gov/sites/default/files/ebsa/laws-and-regulations/laws/cobra/COBRAemployee.pdf
- http://obamacarefacts.com/insurance-exchange/health-insurance-marketplace/
- http://time.com/money/4490196/health-insurance-coverage-census-2015/
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