Extending Your Health Coverage: How to Get COBRA Health Insurance After Quitting Your Job

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Getting fired can take you by surprise, but making a decision to quit implies having a plan in place.  It is no secret that both of these options require dealing with health insurance continuation. Without it, severe disease or a bad accident can cost you a pretty penny. And even a minor health issue is likely to result in disproportionate costs.

Life dramatically changed for millions of Americans in just a year from the moment the pandemic started. Back in April 2020, more than 6 million citizens were looking for compensations and coverage extensions. So, understanding your options is what you need to navigate through the unemployment period.

While there are multiple ways to get a continuation and safeguard your well-being, COBRA remains the most popular one. As a federal law, this program can be used by any eligible candidate nationwide. If you are considering COBRA as a way to keep your job-based coverage, here is what you need to know about the program.

How It Works

Most policyholders are aware that COBRA is not a cheap option. That is why, as a part of the American Rescue Plan Act, the government provides assistance and financial support to unemployed residents dealing with COBRA-related payments. This rescue plan was created to support the American people, including those who faced COVID-induced layoffs.

At this point, dealing with COBRA can seem complicated, but all you need to do is follow the rules and regulations.

The eligibility, however, has its peculiarities. If you are unsure about your decision to quit due to the possible inability to enroll afterward, there is no need to worry. It is possible to qualify for COBRA if you quit or even if you were fired.

On the other hand, the size of your company may determine whether you are eligible for COBRA. Let’s say that you worked for a company employing less than 20 people. In this case, it means that you will not be allowed to extend your employer-provided plan.

Depending on the qualifying events and conditions, you can be allowed or denied a continuation. Let’s unpack it a little more and look into the conditions for approval.

For an employee, the following events can guarantee eligibility:

Here are the qualification criteria for dependents:

But bear in mind that you can lose the opportunity to sign up for COBRA after losing a job if your working hours were significantly reduced or you were fired due to misconduct.

What Does Continuation Coverage Guarantee?

What you get after quitting depends on the elements of your employer-provided coverage. If it did not cover dental or mental health, you should not expect to get these benefits after leaving the company.

At the same time, some companies offer multiple insurance products — bundles — under the group plans. It means that if they cover vision, medicine, and hearing, their employees get to use the same benefits when they get fired, decide to change jobs, or retire.

Alternatively, you might have two separate coverages. Let’s say that you have your employer-provided group plan and a separate dental plan. If that is the case, you will have to apply for COBRA twice — once for each plan. However, laws, requirements, and timelines might differ from state to state.

If you have doubts or specific inquiries about enrolling in this program, we recommend contacting your company’s HR manager and insurance provider.

Understanding State Insurance Continuation Laws

The majority of the U.S. states have mini-COBRA plans. They typically imply specific timelines and rates.

Here is how the timeline for COBRA coverage looks like in some of the states:

Naturally, state laws and regulations vary considerably. With the COVID-19 pandemic, some of the timeframes might have changed. That is why we recommend checking with your State Insurance Department to stay informed about all the recent updates to state laws.

How Much Should I Expect to Pay?

As mentioned before, enrolling in this program does not imply low costs. On the contrary, you will have to bear all the expenses, including a 2% administrative fee. Since your company no longer takes part in the process, you should not expect the coverage to be cheap.

The total cost of the program will depend on the initial level of coverage provided by the company. On average, the annual cost of employer-provided coverage in the United States is around $22,000.

But here’s the good news: the U.S. Department of Labor might assist with covering up to 72% of your premium payments through its Health Coverage Tax Credit (HCTC). However, you have to meet the requirements to get it.

The HCTC eligibility implies that a person loses a job due to the negative consequences of international trade. You can visit this website for more details on the tax credit.

FAQ

Can COBRA cover such physical aspects of health as dental and vision?

It might, but only if your company provided it as a part of the group plan. Alternatively, if you had a separate plan, you can apply for its continuation individually.

How long can I expect my employer-provided plan to last after I leave the company?

Generally, it can last up to 36 months. But the timeline depends on the state laws and regulations.

How much time do I have before making the final choice?

As a rule, every eligible applicant has 60 days to pick an option that can satisfy his needs. It means that if you decide to pass on COBRA, you can pick any suitable option through the marketplace without the need to sit around waiting for the next open enrollment.

Is COBRA cheaper than other options?

No, it definitely is not cheaper. But it can be the best option if you plan to start your new job in a couple of months. If that is the case, it can be the most cost-efficient option for you.

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19 days ago

I’ve found that the length of time you can stay on cobra depends on your circumstances

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