When people lose their job unexpectedly or consider leaving their job to do their own thing, one of the first things they think about is their health coverage. A lot of people get their health insurance through their employer and aren’t sure what to do when that coverage ends. The good news is that you have options. Here are the top 3:
1) Continuation Coverage
If you work for a company with 20 or more employees, you will be offered the option to continue your coverage for up to 18 months under COBRA when you leave. COBRA is not a special type of insurance; rather, it’s simply a continuation of the group health plan. You have 60 days to decide if you want COBRA or not, and if you do you’ll have to pay the full premium—the amount you were previously paying plus the amount the employer was contributing to your premiums.
If your company has fewer than 20 employees, you may qualify for state continuation. In Texas, that continuation can last for up to 9 months, and, like COBRA, you’ll have to pay the full cost of the coverage. Continuation may also be offered for an additional six months after COBRA ends if you do work for a company with 20 or more employees. Not all companies, though, are required to offer state continuation.
To learn more about COBRA, download the free Employee’s Guide to Health Benefits Under COBRA.
2) HIPAA Special Enrollment Period
A second option is a HIPAA Special Enrollment Period (SEP) under your spouse’s plan. If your spouse has group health coverage, you may have originally declined it because you have coverage through your employer. However, if you lose your employer-sponsored coverage, you have 30 days to join your spouse’s health plan. As with COBRA, most employers require employees to pay the full cost of coverage for their dependents.
3) ACA Special Enrollment Period
COBRA and HIPAA have been around for years, but now there’s a third option for people who lose their coverage under their employer plan: an individual health insurance policy. The Affordable Care Act allows people who lose their job-based coverage 60 days to purchase a plan through the individual marketplace. These plans are guaranteed issue—you can’t be turned down or charged more due to a pre-existing condition. And, if you earn less than 400% of the Federal Poverty Level and are not eligible for coverage through your spouse’s employer, you may qualify for a premium tax credit to help you pay for your health insurance.
If you’d like to get an individual health insurance quote, JME can help.
How do you decide?
Everyone’s situation is different, so it’s great to have so many options. As a general rule of thumb, if you qualify for a premium tax credit, that’s probably the way to go. Otherwise, you’ll need to compare the premiums and the benefits of the three available options: individual coverage, your spouse’s plan, or continuation of your group health plan.