Individual and Family
If your employer offers COBRA, you may have the option to keep your current health insurance coverage for up to 18 months, if your employment terminates at any point in the year.
COBRA, or the Consolidated Omnibus Budget Reconciliation Act, is a federal law that allows those who have quit or lost their job, to keep their employer-sponsored coverage for up to 18 months (and in some cases longer). The catch is that you will be paying for the coverage in total, rather than splitting it with your employer.
You may qualify for COBRA if you experience a qualifying event that causes you to lose your employer sponsored health insurance. Some qualifying events include:
Dependents can qualify for COBRA too. Some qualifying events that would allow dependents to qualify for COBRA include
One of the chief concerns for those considering opting into COBRA is the cost. When it comes to group – or employer sponsored – health insurance, your employer typically picks up most of the bill. In fact, according to the KFF, employers paid about 82% of the premium for single coverage and 71% of the premium for family coverage. On the other hand, if you opt in to COBRA, 100% of the bill is your responsibility, along with a portion of administrative fees.
On average, an employer sponsored health insurance plan for a single person cost $6,896 per year. Employers on average paid 82% for single person coverage, leaving the individual with only 18%of the bill, which was $1,241 a year on average.
An employer sponsored family plan cost $19,616 on average. On average employers paid 71% of the bill, leaving the employer with the remaining 29% of the bill, which was $5,689 a year on average.
The transition from having your plan be employer-sponsored to paying everything on your own can be quite a shock to those only used to paying a small percentage of their health insurance premium.
Those who opt into COBRA should make sure that they’re okay with paying 100% of their health insurance premiums and the administrative fee at least until the next open enrollment period. Once you opt into COBRA you cannot qualify for a special enrollment period if you choose to end your COBRA coverage early. Make sure that you can afford these payments so you are not left without health insurance in the middle of the coverage year.
If you decide that you don’t want to opt in to COBRA, you have other coverage options.
Loss of your employer sponsored insurance is a qualifying event that triggers a special enrollment period, this means that you don’t have to wait until the open enrollment period to enroll in a new plan.
During this special enrollment period you can purchase an individual or family plan through a state or federal exchange, or through an online brokerage such as eHealth. Some examples of qualifying life events include:
If you expect to get another job with health benefits or would prefer to wait until the open enrollment period to purchase a plan, in most states you can purchase short-term health insurance plans to fill any gaps in coverage that you experience.
Short-term plans generally have low premiums with applications getting approved as soon as next day. While the coverage that short-term plans offer is not as comprehensive as major medical plans, they still supply some coverage. This is a great option for those who’ve opted into COBRA, found that they had difficulty affording 100% of their premiums plus the administrative fee, and chose to end their COBRA coverage early.
eHealth, the first and largest online brokerage, offers a wide selection of short-term health insurance plans to choose from – along with other health insurance products – that may be right for you if you choose not to opt into COBRA or are looking for coverage for when your COBRA coverage runs out.