When you lose employer-sponsored health insurance, most employers are required to offer you COBRA continuation health insurance. However, the high price of continuation coverage is often enough to cause a health event in itself! As a result, many Americans who lose employer-based coverage are looking for alternatives to COBRA insurance that can take effect as quickly as possible.
The ACA Marketplace as an Alternative to COBRA Continuation Coverage
When you lose your employer-sponsored health insurance, it triggers a special enrollment period which will allow you to purchase a new insurance plan, even outside of open enrollment. The Affordable Care Act (ACA) created an insurance marketplace in each state that allows Americans to compare health insurance plans and purchase insurance coverage. The insurance generally takes effect on the 1st of the month following when it was purchased.
In many cases, financial assistance will be available to help with health insurance purchased in the Marketplace. If a family earns between 100 percent – 400 percent of the federal poverty level, they will qualify for assistance with monthly premiums. In addition, those that earn between 100 percent – 250 percent of the federal poverty level qualify for assistance with cost-sharing, such as copayments and deductibles. In 2014, the federal poverty level was $23,850 for a family of four. However, a family that has access to other affordable, employer-sponsored health insurance will not qualify for financial assistance in the Marketplace.
Finally, the Marketplace can help you determine if you are eligible for Medicaid or the Children’s Health Insurance Program (CHIP). Many states expanded their eligibility requirements for Medicaid in 2014, so even if you previously did not qualify, you may qualify under the new guidelines. Even families with other insurance for the adults may qualify for CHIP coverage for children. For more information, visit the Healthcare.gov Medicaid and CHIP site.
Other Alternatives to COBRA Insurance
Sometimes the ACA Marketplace doesn’t offer the best alternatives to COBRA continuation coverage. Fortunately, there are other options that are affordable, as well.
If your spouse has affordable employer-based coverage, and you could join that plan, you will likely not qualify for tax credits in the Marketplace. You may find that it’s more practical to add yourself to their coverage than it is to purchase separate insurance, especially if their coverage offers excellent access to your preferred medical providers.
If being added to another plan is impractical or unaffordable, you still purchase insurance through the Marketplace without tax credits, or you can contact insurance companies directly to purchase insurance. This may be helpful if you preferred provider doesn’t offer insurance plans in the Marketplace. In some cases, you may be able to select an insurance option that is more affordable than an un-subsidized Marketplace policy.
If you experienced a significant loss of income, you may now qualify for Medicaid or CHIP coverage. As mentioned above, many states have expanded Medicaid qualification guidelines. If you don’t want to go through the Marketplace, you can contact your state Medicaid office directly to apply for coverage. Medicaid and CHIP are available year-round, without any specific enrollment period.
Regardless of what you choose as an alternative to COBRA insurance, you will want to act quickly. You only have a window of 60 days surrounding your loss of employer-based or COBRA coverage to find a new plan. If you miss that timeframe, you will have to wait until the next open enrollment period, which can mean months without any medical coverage at all. That’s an option no one wants to experience, so move quickly to find alternative coverage.