Many Americans under the age of 65 years are entitled to a health insurance plan from their employers. This is a great advantage because as long as you are employed, you can enjoy incredible health benefits. So, the best decision is to enroll when you are eligible, and if you are offered insurance options, choose the best fit. While there are remarkable benefits of employee health insurance coverage, but the problem is that when you lose your job, you may lose the benefit also. So, this might make you stressed.
However, the great news is that you can save this opportunity. You might wonder how? You need to know some hidden secrets about employer-sponsored health insurance plans when you lose your job.
Can You Switch to Self-Purchased Insurance When You Lose Job?
If you are have lost your job that was offering health insurance, you are not required to pause for the fall open admission period to register for the new ACA-compliant policy. Though, pandemic-related special admission windows for health policies have already culminated in many states, so you will be eligible for your special admission period due to losing employer-sponsored health coverage.
Hence, you can register for a health plan via the marketplace and obtain the benefit of the granted subsidies by the American Rescue Plan, without the need to wait till the end period.
However, if you register before your health coverage loss, your new policy will take effect from the first month your previous plan will end. Hence, you can enjoy flawless coverage if your previous plan ends.
Besides, your special admission period also remains for another two months after your health coverage loss. Though, you may have a break in health coverage if you pause and register after your old plan culminates, meanwhile your new policy might not take effect retroactively.
So, if you have a similar situation, you may realize that a short-term health plan is a better option for bridging the gap unless your new coverage takes effect. Short-term health plan does not cover former conditions and is not planned by the Affordable Care Act (ACA). However, they can offer pretty good coverage for unforeseen medical needs during the transitory window when you would be or else uninsured. But don’t forget to review your options during open admission.
COBRA Vs Self-Obtained Coverage
Considering the scope of your employer, you might be offered COBRA (state continuance). However, if your employer is too insignificant for COBRA, you still have access to mini-COBRA. Though it depends on your area of residence. So, any of these options can help you continue your health coverage, instead of shifting to a new individual insurance plan.
If COBRA or state extension is available, your company is likely to apprise you about all details. So you will know what you are supposed to do for the coverage extension procedure and for how long you can keep it.
Usually, you are required to pay the entire cost of COBRA or state extension coverage including the share (of premiums) that your company formerly paid on your behalf. The great news is that till September ’21, the federal government might pay the entire cost of COBRA as part of the American Rescue Plan for the individuals who unwillingly lost their jobs.
So, when the COBRA subsidy ends, the standard decision-making procedure will again be applicable, and you will be entitled to a special enrolment period that will allow you to shift to an individual or family health insurance plan.
COBRA Coverage Vs Discrete Market Health Coverage
So when you are deciding between COBRA and discrete-market health policy, you must keep in mind that ACA market subsidies are now accessible at all income levels, subject to the coverage cost in your region. The American Rescue Plan has abolished the income cover for subsidy entitlement for 2021 and 2022.
Also, subsidies are considerable and cover a majority of the premium charges for the bulk of marketplace enrollees. Until your company agrees to fund your COBRA coverage after the federal subsidy culminates, you will realize that monthly premiums are lower if you engage in a plan via the marketplace, contrary to extending your employer-sponsored coverage.
Free Health Coverage if You Got Unemployed in 2021
If you have been accepted for even one week of redundancy compensation in 2021, you are entitled to a premium subsidy that will entirely cover the cost of two lowest-cost Silver plans in the marketplace of your region, through the year-end.
The subsidy might also encompass the entire cost of the Bronze insurance plan, and probably some of the Gold insurance plans. However, it depends on the cost of the plan in the region of residence.
Apart from the subsidy that will enable you to grab a free Silver plan, it will also ascertain that any Silver plans available have full cost-sharing bargains.
What If Your Income is Less for Subsidies?
If you wish to qualify for the insurance premium subsidies for the plans acquired in the marketplace, you might not be entitled to Medicaid, Medicare, or employer-funded plan. Also, your income needs to meet 100% of the federal poverty level.
However, for 2021 only, you are entitled to subsidies regardless of the actual yearly income as long as you are ineligible for Medicaid, Medicare, and employer policy.
In the majority of states, the ACA’s extension of Medicaid eligibility grants coverage to adults having a household income of 130% of the poverty level, with entitlement determined by the existing monthly income. Hence, if your income has unexpectedly dropped to $0, you are probably entitled to Medicaid. And you can shift to Medicaid when your employer-granted coverage ends.
What if I Am Soon Entitled to Medicare?
Lately, there has been a surge in the number of individuals retiring in their 50s and 60s, before they are entitled to Medicare. However, ACA made it a more genuine option by granting premium subsidies and abolishing medical underwriting.
So, if you are losing your employment or deciding to resign, and you still have a couple of months or years before you are eligible for Medicare, you won’t have to go uninsured. You can register for the marketplace insurance plan during your special admission period after you lose your job. Also, marketplace insurance plans are usually bought on monthly basis, so you can cancel them when you eventually shift to Medicare.