An unexpected job loss—or even an expected one—is tremendously stressful.

It’s not just the lost income that hurts. Losing the valuable health benefits that your family relies on can also be a great source of stress.

Fortunately, if you’ve lost access to your health plan due to job loss, or if that loss is imminent, you still have several possible options:

• You can choose to enroll in COBRA continuation coverage. 
• You can take advantage of a special enrollment privilege and enroll in a new Marketplace individual or family coverage plan.
• You can enroll in a health sharing plan. 
• You can join your spouse’s employer plan, if he or she has one. However, you may have to wait until your spouses’ employers’ open enrollment period to do so. 
• You can enroll in Medicaid or Medicare, if you qualify. 

Let’s examine each of these options in more detail, as well as the pros and cons of each.

Option 1: Join Your Employer’s COBRA Plan

The term “COBRA” is an abbreviation for the Consolidated Omnibus Budget Reconciliation Act.

That’s the federal law that allows you to continue your employer-sponsored health insurance coverage for a limited period after certain qualifying events.

These events include job loss, reduction in work hours, or other qualifying life events that result in the loss of health insurance coverage.

Normally, when you choose COBRA coverage, your former employer stops paying your group insurance premium. Instead, you pick up both your employee portion and your former employers’ portion of the premium, plus a small administrative charge.

Not all employers are subject to COBRA, and not all employees may qualify for coverage. Small businesses with fewer than 20 employees are generally exempt from providing COBRA.

Advantages of COBRA Health Insurance:

• Continuity of Coverage. COBRA allows individuals to maintain the same health insurance coverage they had while employed, providing a sense of continuity and avoiding disruptions in healthcare.
• Familiar Network of Provider. With COBRA, individuals can generally continue to see the same healthcare providers and use the same medical facilities, which can be important for those with ongoing health needs.
• Comprehensive Coverage. COBRA typically offers the same level of coverage as the employer-sponsored plan, including medical, dental, and vision coverage. This can be advantageous for individuals who want to maintain their existing benefits.
• Pre-Existing Conditions. COBRA coverage cannot deny individuals based on pre-existing conditions, ensuring that those with ongoing health issues can still access necessary medical care.

Disadvantages of COBRA Health Insurance:

• Cost. COBRA coverage can be expensive, as individuals are responsible for the full premium, including the portion that the employer previously covered. This additional premium can be a significant financial burden for those transitioning between jobs. What’s more, the Obamacare subsidies don’t apply to COBRA coverage. If you elect COBRA, you’ll have to pay the full premium.
• Limited Duration. COBRA coverage is temporary and typically lasts for up to 18 months (or longer in certain circumstances). After this period, individuals need to find alternative health insurance options, which can be challenging.
• No Employer Contribution. Unlike when employed, employers do not contribute to the cost of COBRA coverage. This means individuals bear the full cost, which is often higher than what they paid while employed.

Do COBRA Plans Qualify for a Subsidy Under Obamacare?

No.

Some employers will help subsidize COBRA premiums after a layoff as part of a severance package. But you won’t get an Affordable Care Act Subsidy of any kind for your COBRA coverage.

This is another reason why COBRA coverage is usually very expensive compared to going out and finding a new individual or family plan that’s qualified under the ACA. 

Does Being Offered a COBRA Plan Disqualify Me for a Subsidy?

No.

Depending on your income and the size of your household, you may still qualify for a subsidy under the Affordable Care Act, even if you had the option of a COBRA plan.

Explore the Health Sharing Alternative

You aren’t limited to traditional, off-the-shelf health insurance plans after a layoff or job loss.

Depending on your circumstances, you may be better off dropping health insurance altogether and joining a health sharing plan.

Health sharing, also known as medical cost sharing, is a non-insurance alternative to traditional health insurance that has gained popularity in recent years.

This approach involves individuals coming together to share healthcare costs, guided by shared values and principles.

What is Health Sharing?

In a health sharing plan, members pool their financial resources to cover each other’s medical expenses.

These plans are typically organized by religious or ethical organizations, and they operate based on a set of common beliefs and values.

Members contribute a monthly share amount, which is then used to pay for the medical bills of fellow members who have eligible expenses.

Health Sharing Advantages

• Cost Savings. Health sharing typically saves hundreds of dollars per month for a family compared to the unsubsidized cost of a traditional health insurance policy. The difference can easily amount to thousands of dollars per year for a family that doesn’t qualify for an Affordable Care Act policy. 
• Freedom of Choice. Health sharing plans offer flexibility when it comes to choosing your healthcare providers. Unlike some traditional insurance plans that have restricted networks, health sharing plans often allow you to see the doctors and specialists you prefer.
• Shared Values Many health sharing plans are organized around shared values, such as faith-based principles. This can be appealing to individuals who want their healthcare contributions to align with their beliefs and values.

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