What happens to my medical insurance if I lose my job?
If you have left your job for any reason and lose job-based health coverage, you qualify for a Special Enrollment Period and have the option of coverage through the ACA Marketplace.
COBRA requires that an employer’s group health plan provide a way for an employee (and their family) to temporarily continue their employer-provided health insurance if they lose a job or their hours are reduced. It covers you seamlessly from your termination date, and you have 60 days to enroll or opt-out. The coverage is temporary but can extend from 18 to 36 months. Your employer will send you the costs and more particulars. Here are additional COBRA details and FAQ’s.
Benefits include access to a familiar plan, the same drug plan, your current doctors, and no need to restart payments for deductibles or out-of-pocket maximums a new plan can require.
However, it also may be significantly more expensive. Kaiser Family Foundation’s 2021 annual survey found that 79% of single employees pay less than 25% of the cost of their health plan, and employers pay at least 75%. Usually the plan requires you to pay 100% of the cost, plus a 2% administration fee. An employer can offer to share that cost but doesn’t have to.
While continuing is convenient, it may be too expensive. Because termination or reduced hours are two of many ways to qualify for a SEP (special enrollment period), the ACA market may offer more affordable options. Other affordable options could be a spouse’s plan if you are married, or Medicaid if you meet income requirements.