Here’s how COBRA and ACA Marketplace insurance compare.
Health Insurance After a Job Loss
COBRA is still offered to employees who are laid off or terminated from a job, but these days there is another more permanent solution. When you leave or lose your job, a window opens to the government’s Health Insurance Marketplace. You can use this window to shop for plans in your state or region. In recent years, open enrollment on the Marketplace has typically been restricted to the period from Nov. 1 to Jan. 15 (although you must enroll by Dec. 15 if you want coverage to start on Jan. 1). However, when you leave a job outside of the normal enrollment period, you have a 60-day enrollment window to shop and sign up for coverage.
COBRA
COBRA continuation coverage refers to benefits extended by the Consolidated Omnibus Budget Reconciliation Act (COBRA). This law gives most employees losing a job the right to continue receiving health insurance benefits for a set time—typically 18 or 36 months. COBRA plans are nearly identical to the insurance offered by your employer, but you may need to pay extra premium costs in addition to a 2% administration fee.
Affordable Care Act
Under the ACA, the government’s Health Insurance Marketplace provides individuals a way to shop for coverage on their own. They can use this resource to see how individual and family plan prices compare to COBRA. They can choose from a variety of plans based on what meets their needs. Keep in mind that through the government Marketplace, you may qualify for cost-saving premium tax credits, Children’s Health Insurance Program (CHIP) coverage, or free or low-cost Medicaid based on your income and dependents.
Can You Just Skip Insurance Coverage?
Whether you decide to take COBRA or shop for a Marketplace plan, health coverage is a must. Opting out of health coverage is simply not a sensible option for several reasons, including:
Financial penalties: While the federal “shared responsibility payment” no longer applies as of 2019, some states have individual insurance mandates with financial penalties for lack of coverage.Unexpected out-of-pocket expenses: Even young, healthy people can find themselves with steep medical bills after an illness or accident. Uninsured patients often pay two to four times as much as insurers for the same treatments.Worse health care outcomes: Unsurprisingly, interruptions in access to care lead to worse outcomes for patients. For example, studies have shown that cancer patients with gaps in coverage have worse survival rates than those who have access to continuous health insurance coverage.
How To Find a Health Insurance Plan
To find coverage and prices in your area, you can visit HealthCare.gov and compare online or call 1-800-318-2596 (TTY: 1-855-889-4325) with questions. You won’t know the full cost of your health coverage until you investigate and find out which options are available to you.
How To Drop COBRA for a Marketplace Plan
If you do decide to take COBRA, the Marketplace window will close. If you want to shop for your own coverage in the future, you will have to wait until the next open enrollment period or a special enrollment period to shop for a Marketplace plan. You can drop COBRA at any time during the open enrollment period or a special enrollment period to shop for your own policy. If your COBRA coverage ends, you must find health insurance on your own. If your coverage ends during a time that’s outside of an enrollment period, the 60-day window to shop for Marketplace coverage will open to you again.
