Here are your options if you had employer-provided coverage and lost it, or were never covered at all.
You’re an Employee and have Lost Your Health Coverage
If your employer provides you with insurance coverage, you’ll lose it if you’re laid off, fired, your employer goes out of busienss, or your hours are reduced so your employer no longer has to provide coverage. You have several your options for obtaining replacement coverage.
COBRA (short for Consolidated Omnibus Budget Reconciliation Act) is a federal law that allows you to keep your health insurance for up to 18 months after you leave your job. Employers with 20 or more full-time-equivalent employees are usually required to offer COBRA coverage. You have to sign up within 60 days after losing your employer-based coverage.
The good thing about COBRA is that it allows you to keep the same coverage you has as an employee. You get to keep the same doctor, health plan, and medical network providers. The bad thing about COBRA is that it’s expensive. COBRA coverage can cost as much as 102% of the full premium paid for your employer-provided coverage--that’s 102% of the total premium amount that was paid each month by both you and your employer. There are no federal tax subsidies to help you pay for COBRA coverage.
Instead of COBRA coverage, you can obtain individual coverage for yourself and your family under the Affordable Care Act (ACA), also known as Obamacare. In 12 states, you apply for coverage through the state-run health exchange (also called marketplaces). In the other states you apply through the federally run exchange at www.healthcare.gov.
Ordinarily, you may apply for ACA coverage only during the annual open enrollment period, which is during November and December of each year. However, after the open enrollment period ends, you may obtain individual coverage if you have a “qualifying life event.” This includes losing your existing health coverage because you were laid off from your job, you quit your job, or your work hours were reduced below the level required for you qualify for employer-provided coverage. This rule also applies if you obtained coverage though the employer of a family member—usually your spouse.
Like COBRA coverage, ACA coverage can be expensive. But you can choose lower-cost plans with higher deductibles and copays. Moreover, unlike COBRA, there are federal tax credits available to help pay your premiums. You’ll qualify for these tax credits if your family income is no more than four times the federal poverty level (more in California). In 2020, a family of four can have an income up to $104,800 and qualify. An individual can earn up to $51,040. The amount of your credit depends on your household size, income, and the cost of health insurance where you live. For more information, see www.healthcare.gov.
Medicaid is publicly funded health care for low income and disabled Americans. The Medicaid eligibility rules vary from state-to-state. In 36 states and the District of Columbia, adults can get Medicaid if their income is up to 138% of the federal poverty level. This is $17,609 a year for individuals, or $36,156 for a family of four. Eligibility is determined by your current monthly income, so you could qualify even if your annual income is over these levels. You can apply for Medicaid anytime you become eligible. For more information and links to apply, see the Medicaid & CHIP coverage guide on heatlhcare.gov.
You Never Had Health Insurance
If you’re self-employed, and have no health insurance, your best options are Medicaid (if your income is low enough) or ACA coverage if your income is too high for Medicaid. As mentioned above, you ordinarily have to wait for the open enrollment period to sign up. However, due to the coronavirus pandemic, all but one of the states that run their own ACA exchanges are allowing uninsured state residents to sign up for coverage now. You don’t have to have symptoms of Coronavirus (COVID-19) to get coverage.
These states are:
- the District of Columbia
- New York
- Rhode Island, and
- Washington state.
You can find links to the ACA exchanges for these states at www.healthcare.gov/marketplace-in-your-state/
If you don’t live in one of these states, this option will not be available to you. You’ll have to wait until the regular open enrollment period that begins in November.