This is a question people ask themselves every day. When you’re between health insurance coverage, it can be hard to know what to do for the time being. You probably have heard of the Consolidated Omnibus Budget Reconciliation Act, or COBRA, but is that your only option?
Nope, you have other options! Let’s break them down to see which one may be right for you.
COBRA grants former employees, retirees, spouses, and dependents temporary access to the same benefits they received on their previous employer's plan, usually up to 18 months. The downside to COBRA is that it tends to be more expensive. The difference is that you are responsible for the entire premium rather than just some of the premium, as most employers pay for part of your coverage as part of your benefits package. You will also continue to have coinsurance, deductibles, and copayments; plus, COBRA carries an administrative fee of up to 2%. COBRA may be right for you if:
- Your doctor is out of network on other plans
- You reached your deductible before your coverage ended
To get you through until the next open enrollment period, you can use this short-term health plan that offers temporary coverage from 30 to 364 days or two back-to-back six month policies. This plan is ideal for people who are:
- Looking for an alternative to health care reform plans
- Recent college graduates
- Part-time or temporary employees
- Between jobs and looking for an affordable alternative to COBRA
- Newly employed and waiting for health benefits to begin
- Waiting for Medicare eligibility
Option 2, if you qualify:
Depending on why you are between coverages, you may be eligible for a special enrollment period, so you don’t have to wait for open enrollment to apply. You may be eligible if your health insurance ended due to: loss of job-based coverage, the end of an individual plan, COBRA expiration, aging off a parent’s plan, losing eligibility for Medicaid or CHIP, and other similar circumstances.
Important: Voluntarily ending coverage, including failing to pay premiums, or losing coverage that doesn’t qualify as minimum essential coverage doesn’t make you eligible for a special enrollment period.
If you qualify, you are eligible to apply for these two types of coverage:
Traditional PPO health plans are less expensive than COBRA, so compare coverage options. This plan may be right for you if:
- You’re looking for a plan with options, so you can save money by choosing a plan that offers the balance of premium, coverage, and deductible that's right for you.
High-deductible health plans can save you money on your premium. When you pair this type of plan with a tax-advantaged health savings account (HSA) that you own and control, you can maximize your health care spending. This plan may be right for you if:
- You are relatively healthy. If your expected medical costs are low, you can reduce your monthly premiums significantly by choosing this type of plan.
Regardless of which option you choose, it is important that you do not allow your coverage to lapse. If the unexpected happens without coverage, you and your family will be responsible for 100% of all medical costs that may occur.
For more information on health insurance 101, visit our Learning Center.