When you resign or lose your job, the thought of losing your health insurance plan can add to your anxiety about the future. The good news is that under the Consolidated Omnibus Budget Reconciliation Act (COBRA), most people employed by public or private entities with 20 or more employees can keep their health insurance plan through their employer when they leave their jobs.
What is COBRA?
If you wish to retain your health insurance plan through COBRA, you must leave your job due to a “qualifying event.” This can include leaving your job for any reason other than gross misconduct or a reduction in your work hours. You must be covered by the plan on the day before the qualifying event that caused you to lose your health insurance plan.
Duration of Coverage
The duration of coverage depends on when the event occurred. If your job was terminated or your work hours were reduced, you may be covered for up to 18 months. If your job ended or your hours were reduced and you became eligible for Medicare before the 18 months following the event, COBRA coverage lasts for up to 36 months after the date you became eligible for Medicare.
Cost of COBRA
In most cases, COBRA can be expensive because you must pay the full premium. You must pay the part that your employer paid on your behalf when you had your job. You may also have to pay up to 2% for administrative fees. As of 2019, the shared responsibility payment under the Affordable Care Act (ACA) has been eliminated. This means you do not have to pay a tax penalty for not having health insurance if you choose to forego COBRA or other options.
Alternatives to COBRA Health Insurance
If you cannot afford health insurance through COBRA but want to get a healthcare plan, there are other options besides COBRA that may suit you.
1. Short-term Health Insurance
You have the option to get a short-term health insurance plan to cover the gap between your current plan and one you will obtain at your new job. One of the best things about this alternative to COBRA is that you can apply quickly and get approved. Getting a quote for a short-term plan online takes less than 30 seconds. You could be covered by insurance as soon as the next day after applying. Most importantly, you can apply at any time, not just during open enrollment periods, as is the case with most healthcare plans.
These plans tend to be cheaper than some other COBRA alternatives for this reason. For example, you may be denied coverage if you have a pre-existing condition. You should also be aware that this option might not cover some critical health issues like maternity care or mental health services.
Short-term health plans are offered for durations ranging from one month to less than a year. The length of time depends on the state you live in. Most importantly, the policy may impose an annual or lifetime financial limit on coverage. They are not intended to be a long-term solution.
Some short-term health plans do not meet insurance requirements under ACA rules. This means they may not include the essential health benefits package required by ACA plans, but they can still help fill gaps in your coverage and help you avoid paying more for COBRA.
2.
Health Insurance through the ACA Market
ACA plans are considered a
Source: https://www.thebalancemoney.com/alternatives-to-cobra-health-insurance-2385910
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