Can I Keep My Health Insurance If I Quit My Job?

Losing employer-sponsored health benefits after leaving a job does not necessarily mean an immediate loss of coverage, as several avenues exist to maintain health insurance.

Continuing Coverage with COBRA

The Consolidated Omnibus Budget Reconciliation Act, known as COBRA, is a federal law allowing for the temporary continuation of group health coverage. This option is typically available to employees of private-sector employers and state or local governments that maintained at least 20 employees on more than half of their typical business days in the prior calendar year. Voluntary job termination is generally considered a qualifying event that makes an individual eligible for COBRA.

An individual electing COBRA is responsible for the full premium amount, which includes the portion previously paid by the employer, plus an administrative fee. The election period for COBRA coverage provides at least 60 days, starting from the later of the date the election notice is furnished or the date coverage would otherwise be lost.

To elect COBRA, the process begins after the former employer notifies the health plan of the qualifying event, which they must do within 30 days. The plan administrator then has 14 days to send the COBRA election notice to eligible individuals. Upon receiving this notice, the individual must complete the necessary election forms and submit them by the specified deadline. The initial premium payment is typically due within 45 days of the election date, with subsequent payments made monthly. If elected within the required timeframe and all payments are made, COBRA coverage is retroactive to the date health benefits were initially lost.

Exploring Health Insurance Marketplace Plans

The Health Insurance Marketplace, established by the Affordable Care Act (ACA), provides a platform for individuals to compare and enroll in health insurance plans. Losing job-based health coverage, even due to voluntarily leaving a job, is a qualifying event that triggers a Special Enrollment Period (SEP).

Generally, individuals have 60 days before or 60 days after losing their job-based coverage to apply for a Marketplace plan through a SEP. The Marketplace also offers potential financial assistance, such as Premium Tax Credits and Cost-Sharing Reductions, designed to lower monthly premiums and out-of-pocket costs based on household income and size. Before applying, it is helpful to have an estimate of the household income and information about all household members to ensure an accurate application.

The procedural steps for applying and enrolling through the Health Insurance Marketplace typically involve visiting Healthcare.gov or a state-specific exchange website. An individual must create an account and accurately input their personal and financial information. This information is used to determine eligibility for plans and any financial assistance. After reviewing the available plans and selecting one that aligns with their needs, the individual must make the first premium payment to activate coverage.

Other Avenues for Coverage

Beyond COBRA and Marketplace plans, several other distinct options for health insurance coverage may be available, depending on an individual’s specific circumstances.

Spouse’s Employer-Sponsored Plan

Losing job-based coverage is typically considered a qualifying event, which allows an individual to be added to a spouse’s existing employer-sponsored health plan. There is usually a short enrollment window, often around 30 days from the qualifying event, to make this change. Contacting the spouse’s human resources department or benefits administrator is the initial step to explore this option.

Medicaid

Medicaid is a joint federal and state program providing health coverage to eligible low-income individuals and families. Eligibility criteria for Medicaid vary significantly by state, generally based on factors such as income, household size, age, and disability status. Applications for Medicaid can typically be submitted directly through state Medicaid agencies or through the Health Insurance Marketplace website, Healthcare.gov.

Short-Term Health Insurance

Short-term health insurance plans offer temporary coverage intended to bridge gaps, often lasting from one to four months. These plans are not required to comply with the comprehensive consumer protections of the ACA, meaning they may not cover pre-existing conditions or essential health benefits. Short-term plans are typically obtained directly from private insurance companies.

Medicare

Medicare is a federal health insurance program primarily for individuals aged 65 or older, though it also covers younger people with certain disabilities. While not directly tied to employment status for most beneficiaries, job loss might prompt an eligible individual to enroll in Medicare if they had previously deferred enrollment due to employer coverage. Enrollment for Medicare is managed through the Social Security Administration.