When you lose or leave your job, you have several options to get health care coverage. Usually, you can:
- continue using your job-sponsored health coverage through COBRA;
- enroll in an individual policy through the federal health insurance marketplace; or
- choose Medicaid/Medicare/CHIP if you or your dependents are eligible.
Below are some tips to help you decide which of these coverage options is best for you. Pay close attention to the enrollment deadlines. You can’t buy coverage until the next Open Enrollment period if you miss them.
COBRA
In 1985, Congress passed the Consolidated Omnibus Budget Reconciliation Act (COBRA), which requires continued health coverage to be offered to employees who have lost or quit their job, as well as those who get reduced hours or have had other major life events (such as divorce or death).
COBRA coverage will most likely cost more than your health coverage when you were an active employee and can cost upwards of 102% of the cost of the plan, since the total cost of the plan includes the part formerly paid by your employer. COBRA generally applies to group health plans provided by private, state, and local government employers, but is not applicable to federal and church employees.
You have 60 days from when your job-based coverage ends to choose COBRA coverage, and each beneficiary must choose coverage independently. If you decline COBRA coverage but change your mind and decide you want it, you can revoke your waiver if it is within the 60-day election period and choose COBRA.
Visit the US Department of Labor’s website for more detailed information on COBRA coverage.
Federal Health Insurance Marketplace
While you may qualify for COBRA, you also have the option of seeking other health care coverage, including the federal health insurance marketplace (marketplace), a spouse’s health care plan, Medicaid, Medicare, or CHIP.
Losing your job-based health coverage qualifies you for a special enrollment period in the marketplace so you won’t have to wait until the annual open enrollment period at the end of the year. This means you can shop for an individual policy through an agent, directly from the health insurer, or though the marketplace. You must select a plan from the marketplace within 60 days of losing your job-based coverage.
To learn more about marketplace coverage, visit healthcare.gov or call 1-800-318-2596.
️*️⃣ Depending on your income, you may be able to get marketplace coverage at a lower cost with subsidies outlined in the Affordable Care Act (ACA). To see if you qualify for these subsidies, use healthcare.gov’s Income Levels and Savings Calculator.
Medicare, Medicaid, and CHIP
If you’re nearing 65 or have disabilities, and need low-cost coverage, you may want to consider Medicare and/or Medicaid. While Medicare and Medicaid are both health insurance programs administered by the government, there are differences in covered services and cost-sharing. Visit the Texas Health and Human Services’ (HHS) website for more info on Medicaid in Texas. To learn more about Medicare, visit medicare.gov or call 1-800-633-4227.
If you have children and need free or low-cost coverage, you may want to consider the Children’s Health Insurance Program (CHIP). Visit HHS’ website for more info on the CHIP program.
*️⃣ You can apply for and enroll in Medicaid, Medicare, or CHIP any time of year.
Takeaways
The best health care coverage option depends on your individual needs and budget. Review each option. Use the online calculators and comparison tools to do the math to figure out which health plan offers the coverage you want at the price you can afford.
Download and print the National Association of Insurance Commissioners’ (NAIC) Shopping Tool Packet to help you take notes as you compare health plans and use OPIC’s Health Insurance Shopping Checklist for questions to consider as you make your final decision.