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2 options if you lose job-based coverage

If you lose job-based health insurance, you have 2 main options:

  • Buy a plan through the Health Insurance Marketplace
  • Sign up for COBRA coverage

Option 1: Buy a health plan through the Marketplace

If you leave your job for any reason and lose your job-based insurance, you can buy a Marketplace plan. Losing job-based coverage, even if you quit or get fired, qualifies you for a Special Enrollment Period. This means you can buy insurance outside the yearly Open Enrollment Period.

Your coverage can start the first day of the month after you lose your insurance.

Option 2: Sign up for COBRA coverage

You may be able to keep your job-based health plan through COBRA continuation coverage.

COBRA is a federal law that may let you pay to stay on your employee health insurance for a limited time after your job ends (usually 18 months). You pay the full premium yourself, plus a small administrative fee.

Get covered to avoid the penalty

If you don’t have qualifying health coverage for all or part of the year, you may have to pay a penalty.

This is true no matter what your employment status is.

More Answers: If you lose job-based coverage

Can a Marketplace plan start the same day I lose my job-based insurance?

No. Marketplace plans take effect the first day of the month after your job-based insurance ends. So if you lose your insurance plan on March 7 and select a Marketplace plan by March 31, coverage can start April 1.

If I have a gap in health insurance, will I have to pay the penalty?

If you’re uninsured for two consecutive months or less, you don’t have to pay the penalty. This is called the “short coverage gap” exemption.

You’re considered covered any month you have insurance for at least one day.
When I apply for a Marketplace plan after losing job-based insurance, does the income I made this year before I left my job count?

Yes. Savings on a Marketplace plan are based on your estimate of income for everyone in your tax household for the full calendar year you want coverage. Learn how to estimate your yearly income.

What if I lost my job-based insurance and I’m now eligible to enroll in a spouse’s plan? Can I buy a Marketplace plan instead?

Yes. But if you’re offered coverage through your spouse’s job, you aren’t eligible for premium tax credits or other savings on a Marketplace plan – even if you don’t accept the offer.

The only exception is if your spouse’s plan doesn’t meet certain standards for affordability or coverage. Most plans meet these standards, even if they charge high premiums for spouse and dependent coverage.
What if I leave my job with insurance and start another job that has a waiting period before I can enroll in it?

You can buy a Marketplace plan to provide coverage until your new job-based insurance starts. Until then, you can qualify for savings on a Marketplace plan based on your income.

Once you enroll in the new job-based insurance you can keep the Marketplace plan, but you’d have to pay full price.
You can end your Marketplace plan any time without penalty. To see how to avoid a gap in coverage, learn about deadlines for ending plans.
What if I leave my job that had health insurance and take a new job that doesn’t offer health insurance?

As long as you don’t have another offer of qualifying health coverage, you can enroll in a Marketplace plan and may be eligible for premium tax credits and other savings based on your income.