How Long Does Your Insurance Last After You Quit a Job in Texas?

When an individual leaves a job, maintaining health insurance is a key concern. Understanding available pathways is important for continuous access to medical care. This involves knowing when employer benefits end and exploring federal, state, and private options. This guide helps individuals make informed healthcare decisions after employment changes.

When Employer-Sponsored Coverage Ends

Employer-sponsored health insurance typically ends on the last day of employment or the end of the month. The exact date depends on company policy. Consult human resources or benefit documentation to confirm the termination date.

Some employers may offer a brief grace period, but this is not universal. Proactive planning is important to avoid a lapse in coverage.

Federal COBRA Continuation

The Consolidated Omnibus Budget Reconciliation Act (COBRA) offers temporary health coverage continuation after events like job termination. It’s available to employees of private-sector employers with 20 or more employees, or state and local governments. COBRA lets eligible individuals keep their previous employer’s health plan, which can be useful for continuing with current providers.

For employees who resign or have reduced hours, COBRA coverage typically lasts up to 18 months. Dependents (spouse, children) may get up to 36 months under specific circumstances like death of the employee, divorce, or a child losing dependent status. If a qualified beneficiary becomes disabled within the first 60 days of COBRA, coverage for all beneficiaries may extend to 29 months if the Social Security Administration determines disability.

COBRA costs can be substantial, as individuals pay the full premium (employer and employee portions) plus an administrative fee up to 2%. Employers have 30 days to notify the plan administrator, who then has 14 days to send the election notice. This means the notice is typically provided within 44 days of the qualifying event.

After receiving the COBRA election notice, individuals have at least 60 days to decide. This period starts on the later of the notice date or the date coverage would otherwise be lost. If elected, the initial premium is generally due within 45 days. Subsequent payments typically have a 30-day grace period.

Texas State Continuation Options

Beyond federal COBRA, Texas offers state-specific continuation options, especially for employees of smaller businesses not subject to federal COBRA. Texas law includes “Mini-COBRA” for employers with 2 to 19 employees. This allows eligible individuals to continue group health coverage for up to nine months if they don’t qualify for federal COBRA. To qualify, individuals must have been covered by the plan for at least three months before the qualifying event.

If federal COBRA benefits are exhausted, Texas law may allow an additional six months of continuation coverage. This applies if the health plan was issued by an insurance company or HMO subject to Texas insurance laws. This state continuation period begins immediately after federal COBRA ends. Employees must elect this coverage within 60 days of their original termination date or federal COBRA end date, and they pay the full premium.

Exploring Other Health Coverage Pathways

Beyond COBRA and state options, other avenues exist for health insurance after leaving a job. The Health Insurance Marketplace, under the Affordable Care Act (ACA), offers individual and family plans. Job loss is a qualifying event, triggering a special enrollment period to enroll in a Marketplace plan outside annual open enrollment. This period typically lasts 60 days from coverage loss.

Many may qualify for financial assistance (subsidies) through the Marketplace to reduce premium costs. Eligibility depends on household income, generally 100% to 400% of the federal poverty level, though temporary changes may remove the upper income limit through 2025. Subsidies can significantly lower monthly premiums, making Marketplace plans more affordable than COBRA for some. Medicaid is another option for lower-income individuals and families, with eligibility based on Modified Adjusted Gross Income (MAGI) relative to the federal poverty level.

Joining a spouse’s health plan is often a viable and cost-effective alternative. Loss of coverage due to job termination typically triggers a special enrollment period for the spouse’s plan. Short-term health plans can bridge coverage gaps, but offer limited benefits, often exclude pre-existing conditions, and do not comply with ACA requirements. Recent federal rules limit their initial term to three months, with a maximum total duration of four months, including renewals.