Health Insurance Between Jobs

Losing your job is stressful enough without worrying about health coverage. The good news: you have options beyond expensive COBRA, and marketplace subsidies can make coverage surprisingly affordable when your income drops.

Your Coverage Options

Option 1: ACA Marketplace (Usually Best)

The marketplace is typically your most affordable option because:

• Subsidies kick in immediately - Lower income = higher subsidies
• Coverage can start the 1st of next month - No waiting period
• 60-day Special Enrollment Period - Job loss qualifies you to enroll anytime

Example: Lost a $60K job in March. Expecting $20K unemployment rest of year. At that income level, you might pay $50-150/month for a Silver plan with strong Cost-Sharing Reductions.

Option 2: COBRA

COBRA lets you keep your exact same employer plan, but:

• You pay the FULL premium (what you paid + what employer paid + 2% admin fee)
• Typical cost: $600-$800/month for individual, $1,500-$2,000+ for family
• Lasts up to 18 months

When COBRA makes sense: - You're mid-treatment with specific doctors - You've already met your deductible - You have a high-cost condition and great employer plan

Option 3: Spouse's Plan

If your spouse has employer coverage, losing your job triggers a Special Enrollment Period for their plan too.

Option 4: Short-Term Plans (Use Caution)

Short-term plans have low premiums but major gaps: - Don't cover pre-existing conditions - Limited benefits - Don't count as ACA-compliant coverage

The 60-Day Window

You have 60 days from losing job-based coverage to enroll in a marketplace plan. Don't wait.

Timeline: 1. Day 1: Job ends, start gathering documents 2. Days 1-7: Apply on HealthCare.gov 3. Day 15: Select plan, pay first premium 4. 1st of next month: Coverage begins

COBRA Bridge Strategy

You have 60 days to elect COBRA, and it's retroactive. Smart strategy:

1. Don't elect COBRA immediately
2. Enroll in marketplace plan
3. If major health event before marketplace starts, elect COBRA retroactively to cover the gap

This gives you a safety net without paying COBRA premiums unless you need them.

Estimating Your Income

Your marketplace subsidy depends on projected annual income for the year. Include:

• Income earned so far this year from your job
• Severance pay (counts as income)
• Unemployment benefits (counts as income)
• Expected income from new job (if you know)
• Spouse's income (if married filing jointly)

Be accurate, not optimistic. Underestimating income means paying back subsidies at tax time.

Documents You'll Need

• Termination letter with coverage end date
• Pay stubs from this year
• Severance agreement (if applicable)
• Unemployment determination letter
• Last year's tax return (for income reference)

Step-by-Step Enrollment

1. Go to HealthCare.gov or your state marketplace
2. Select "Lost job-based coverage" as your qualifying life event
3. Enter your coverage end date
4. Provide income estimate for the full year
5. Compare plans - Silver often best if you qualify for CSRs
6. Select plan and pay first premium
7. Coverage starts 1st of the following month

What About My FSA/HSA?

FSA (Flexible Spending Account): - Usually ends when employment ends - Spend remaining balance on eligible expenses before termination - Some plans offer short grace period

HSA (Health Savings Account): - You keep it - it's yours forever - Can use funds for any qualified medical expenses - Can continue contributing if you enroll in HSA-eligible plan

Timing Your Job Search

If you have flexibility on start dates, consider:

• Starting new job on the 1st aligns coverage transitions cleanly
• Ask about new employer's waiting period - some have 30-90 day waits
• Negotiate earlier coverage start as part of job offer

Common Mistakes to Avoid

1. Waiting too long - Don't miss the 60-day window
2. Assuming COBRA is only option - Marketplace is usually cheaper
3. Underestimating income - Leads to tax-time repayment
4. Forgetting spouse/dependent coverage - They lose coverage too
5. Going uninsured - One accident can mean financial disaster

Next Steps

1. Calculate your projected annual income
2. Check your eligibility with our quiz
3. Compare marketplace plans on HealthCare.gov
4. Enroll within 60 days of losing coverage