Whether to Consider COBRA or Other Health Insurance Plans Between Jobs

Whether you were fired from your job or had voluntarily resigned from it, the health insurance plan that your former employer would have partially paid in your stead will have stopped, forcing you to seek health insurance elsewhere. As allowing yourself to remain uninsured between jobs runs the risk of incurring penalties under the Affordable Care Act (ACA), you are incentivized to have health insurance of some kind - but the lack of a steady income during this time period can make you unable to afford this.

Legislation passed in 1985 called COBRA allows you to retain the health care coverage that your previous employer's plan provided for you for a period of time lasting until one and a half years after your employment ended. However, your employer will no longer pay its portion of the insurance plan's premium, forcing you to pay for the entirety of the premium on your own.

COBRA insurance can offer highly sufficient coverage that will take your current health and your immediate family into account. While you are allotted a 60-day time frame within which you can decide whether you need its form of coverage, waiting until the 60th day to pay its premium may cause the ACA to penalize you. Meanwhile, you will need to compare how much more or less COBRA insurance will cost every month than certain other insurance options - but such options exist that can potentially provide relief for persons that feel that COBRA insurance is not viably affordable.

A short-term insurance policy is a fairly tidy method of filling in the void that will ordinarily be left over between losing a job and finding another one. Its general idea is that, while it does not last for more than 1 year, that period should last long enough for you to regain coverage at a new employer. It is also quick to apply for. However, various short-term policies have differing coverage limits, annual limits, lifetime limits, and rules for application, all of which are generally stricter than other insurance plans. For example, some short-term policies will not easily be granted if either you or your spouse are expectant for a child. Furthermore, the ACA does not qualify most short-term policies as appropriate insurance.

The ACA counts the loss of your employment and coverage as an event that qualifies you for the services of the health insurance marketplace of your state. This organization will allow you to purchase insurance that complies with the ACA's policies by design, provided that your income meets a minimum threshold to qualify. You may not even have to wait until the open enrollment period in order to qualify. This option is closed off for persons that do not maintain a high enough income, however.

If you have neither the income necessary to qualify for a health exchange nor the funds necessary to pay for COBRA insurance, you can consult a health insurance agent to search for independent policies offered by various companies and verify that they count per the ACA's standards. This independent health insurance plan is likely to offer sufficient coverage without charging as much as a COBRA plan, and it is flexible in that you can retain it for however long you need. If you do not have a spouse and you do not already have medical conditions, independent policies offer a comparatively inexpensive course that takes into account your relatively low coverage needs, although there may be annual increases to the rates.

Finally, some insurance plans offer very good coverage for comparatively inexpensive monthly rates but require you to pay for a significant amount of the coverage by yourself before the plan begins making its co-payments. These are called high deductible plans, and the idea behind paying fully for your first visits to health care professionals since starting this sort of plan is that you should not have to pay for the harshest health-related expenses afterward should those situations arise. The relatively low monthly rates imply that these types of plans are not plans that their customers believe they will need to use outside of unexpected and dire circumstances, but the scope of the provided coverage will assuredly meet those needs.

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