Just left my job: COBRA or a Marketplace Plan? What’s best for me?


For most people, losing a job has historically meant losing affordable health care coverage as well. Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), most employers must offer terminated employees continuation coverage of the group health insurance provided while employed. That COBRA coverage, though, is usually offered at full price plus a two-percent administrative fee, which makes the monthly premium unaffordable if you’re newly unemployed. Thanks to the Affordable Care Act, however-new options are available in the Health Insurance Marketplace.

COBRA Coverage and Costs

While you are employed, your employer typically pays the majority of the premium for your group health plan. Under COBRA, you pay your current premium plus your former employer’s portion. In 2015, the average worker paid about $89 per month as a premium for single coverage; employers paid about 4.5 times that amount for the remainder of the premium. That means a worker who loses their job might have to pay around $521 a month, plus an additional $10.42 in administrative fees. The good news is that there are options to get access to quality, affordable care that doesn’t necessarily cost $530 per month.

Health Insurance Options for the Unemployed

If you lose your job and do not have a spouse who gets insurance through work that you could join, you still have the following options for health insurance:

  • Elect COBRA continuation coverage through your former employer
  • Visit the Marketplace to find plans available and affordable to you
  • Purchase private insurance
  • Remain uninsured

Keep in mind that failing to have health insurance not only puts you at risk physically but financially, since you might be fined under the ACA individual responsibility mandate during tax season.

Marketplace Alternatives

Loss of job-based health care coverage qualifies for a special enrollment period in the Marketplace. This means you don’t have to wait until the usual open enrollment period in order to sign up for coverage. In the Marketplace you’ll find several affordable plan options according to your anticipated income for the year. An estimated eight out of 10 people who choose a Marketplace plan pay less than $100 a month as a premium, in large part due to tax credits and financial subsidies that can save you money. Additionally, depending on your state, household size and projected income, you might qualify for no- or low-cost Medicaid benefits.

Want to understand your health care options after employment? Call or make an appointment with a HealthSherpa Consumer Advocate. Don’t delay, though, since you only have 60 days from the date of unemployment to decide.

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