Most Americans under the age of 65 get their medical health insurance from a company. This makes life fairly simple as long as you work that gives solid health benefits: All that you should do is enroll when you are eligible, and if your employer offers a few options to choose from, select the one that best suits your requirements each year on your employer's annual enrollment period.
But the downside to having health insurance associated with employment is the fact that losing your job will also mean losing your wellbeing insurance, adding stress to an already stressful situation.
The great news is that you've got options – probably several, with respect to the circumstances. Let us take a look at what you ought to know about health insurance if you've lost your job and are facing losing your employer-sponsored health coverage.
Can I enroll in self-purchased insurance when I've lost my job?
Open enrollment for 2022 health insurance runs through at least January 15, in many states. But if you're losing your job-based medical health insurance next, you do not have to hold back for the following annual open enrollment period to sign up for a new ACA-compliant plan. You'll qualify for your personal special enrollment period because of the loss of your employer-sponsored health plan.
This will allow you to enroll in a plan with the marketplace/exchange and make use of the subsidies which are bigger than ever, thanks to the American Rescue Plan.
If you enroll prior to your coverage loss, your new plan will require effect the very first from the month after your old plan ends, meaning you'll have seamless coverage if your old plan's ending on the last day from the month.
Your special enrollment period also continues for Two months after your coverage loss, although you'd possess a gap in coverage if you wait and enroll after your old plan ends, since your new plan wouldn't take effect retroactively.
If you're in that situation, you will probably find that a short-term health plan is a great choice for bridging the gap until your brand-new plan becomes effective. Short-term plans won't cover pre-existing conditions and aren't regulated through the Affordable Care Act (ACA). But they can provide fairly good coverage for unexpected medical needs throughout a temporary window when you'd well be uninsured.
COBRA (or state continuation) versus self-purchased coverage
Alternatively, if COBRA can be obtained, you have 60 days to determine whether you want to capture it or not. This can be used window like a small cushion involving the old coverage and your new coverage, because COBRA becomes effective retroactively if and when you elect to utilize it. Therefore if you'll have a one-month gap involving the job plan ending as well as your new plan starting, you could elect COBRA if you end up getting medical needs during that month. The coverage would seamlessly start when your old plan might have ended, avoiding any gap in coverage so long as you pay all COBRA premiums that are due.
If COBRA (or state continuation coverage) is available, your employer will notify you and also provide you with details about what you will need to do in order to activate the coverage continuation, just how long you can keep it, and how much you will need to pay every month to keep the coverage in force.
If you depend on COBRA after leaving your work (instead of transitioning to some self-purchased plan in the marketplace), you will have a special enrollment period once the COBRA subsidy ends. This can permit you to transition to an individual/family plan at that time if you want to.
COBRA coverage vs individual-market health insurance
Here's what to keep in mind when you are deciding between COBRA and an individual-market health plan:
- ACA marketplace subsidies are actually offered at all income levels, depending on the cost of coverage in your town (the American Rescue Plan eliminated the income cap for subsidy eligibility for 2022 and 2022). And the subsidies are substantial, since the most of the premium cost for almost all marketplace enrollees. Unless your employer is subsidizing your COBRA coverage, you'll probably find that the monthly premiums are lower should you sign up for an agenda through the marketplace, as opposed to continuing your employer-sponsored plan.
- Have you already spent a lot of money on out-of-pocket costs under your employer-sponsored plan this year? You'll almost certainly be beginning again at $0 should you switch to an individual/family plan, even if it's offered by the same insurer that provides your employer-sponsored coverage. Depending on the specifics of your circumstances, the cash you've already paid for out-of-pocket medical expenses this year could offset the lower premiums you likely will see available on the market.
- Do you have certain doctors or medical facilities you need to continue to use? You will want to check carefully the provider networks of the available individual/family intends to find out if they're in-network (provider networks can differ significantly between the employer-sponsored and individual market, even if the plans can be found through the same insurance company). And if there are particular medications that you need, you will want to make sure they're around the formularies of the plans you're looking at.
- Will you be eligible for a reasonably limited subsidy if you switch to an individual/family plan? Should you choose qualify, you'll need to shop inside your exchange/marketplace, as subsidies aren't available if you purchase your plan from an insurer. (You can call the number towards the top of this page to become of a broker who are able to help you enroll in an agenda through the exchange.) And again, because of the ARP, subsidies are larger and much more accessible than usual; that will continue being the situation throughout 2022 as well.
What if my earnings are lacking for subsidies?
In order to qualify for premium subsidies for a plan purchased in the marketplace, you must not be eligible for Medicaid, premium-free Medicare Part A, or an employer-sponsored plan, as well as your income has to be a minimum of 100% of the federal poverty level.
In most states, the ACA's growth of Medicaid eligibility provides coverage to adults with household income up to 138% of the poverty level, with eligibility determined based on current monthly income. Therefore if your earnings has suddenly dropped to $0, you'll likely be eligible for Medicaid and may transition to Medicaid when your job-based coverage ends.
Unfortunately, you may still find 11 states where most adults face a coverage gap if their household earnings are underneath the federal poverty level. They aren't entitled to premium subsidies available on the market, as well as aren't entitled to Medicaid. This is an unfortunate situation those 11 states have formulated for his or her low-income residents. But you will find strategies for avoiding the policy gap if you are in a single of those states.
And remember that subsidy eligibility in the marketplace is dependant on all your family members income for the whole year, even if your current monthly income is underneath the poverty level. So if you earned enough earlier in the year to become subsidy-eligible, you are able to sign up for an agenda with subsidies according to that income, despite the fact that you will possibly not earn other things for the rest of the entire year.
What if I'll soon be eligible for Medicare?
There has been an increase recently within the number of people retiring in their late 50s or early 60s, before they're eligible for Medicare. The ACA chose to make this a far more realistic option from 2022, thanks to premium subsidies and the elimination of medical underwriting.
And the ARP has boosted subsidies making them more widely available through the end of 2022, making affordable coverage more accessible for early retirees. That's especially true for those whose pre-retirement income might have made them ineligible for subsidies in the year they retired, because of the “subsidy cliff” (that has been eliminated through the ARP through the end of 2022).
So if you are losing your work or choosing to leave it but you just have a few months or a couple of years before you'll be 65 and eligible for Medicare, rest assured that you won't have to go uninsured.
You'll be able to sign up for a marketplace plan during your special enrollment period triggered by the lack of your employer-sponsored plan. As well as should you earned a fairly robust income in the earlier part of the year, you might still be eligible for a premium subsidies to offset some of the cost of your new plan for all of those other year.
And marketplace plans will always be purchased on the month-to-month basis, so you can cancel your coverage when you eventually transition to Medicare, regardless of when that occurs.
Don't worry, get covered
The short story on all of this? Coverage is available, and obtaining your own health plan is not as complicated as it can seem initially, even when you've had employer-sponsored coverage all of your life.
You can register outside of open enrollment if you're losing your job-based insurance, and there's a good chance you'll be eligible for a financial help that will make your brand-new plan affordable.
You can find out more about industry where you live and the available plan options by selecting your state on this map. There are zero-cost enrollment assisters – Navigators and brokers – available throughout the country that will help you understand everything.
Louise Norris is an individual health insurance broker who has been covering health insurance and health reform since 2006. She's written a large number of opinions and academic pieces concerning the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform by other health insurance experts.
