Orlando Harmon
If you lose your job-based health insurance, you can enroll in a Marketplace plan and may be eligible for premium tax credits and other savings based on your income. You will qualify for a Special Enrollment Period to enroll to get coverage for the rest of the year, but you need to apply within 60 days of losing your job-based coverage. Your coverage can start the first day of the month after you lose your job-based insurance. If you are under the age of 65 and don't qualify for Medicare, two popular options are COBRA and the ACA. COBRA allows you to keep your employer coverage for up to 18 months, but you may have to pay the full premium. ACA plans are often cheaper and allow you to pick a health plan from your state's health insurance exchange.
| Characteristics | Values |
|---|---|
| Losing job-based health insurance | Eligible to enroll in a Marketplace plan |
| Losing job-based health insurance | Qualify for a Special Enrollment Period |
| Losing job-based health insurance | Apply for Marketplace coverage within 60 days of losing coverage |
| Losing job-based health insurance | Coverage can start the first day of the month after losing job-based coverage |
| Losing job-based health insurance | Qualify for a tax credit to lower monthly insurance payments |
| Losing job-based health insurance | Premium tax credits and other savings based on income |
| Medicaid | Qualify if total household income is above 138% FPL (poverty level) in states without expanded Medicaid |
| Short-term health insurance | Temporary plans that are not ACA-regulated, less expensive, and available in states without expanded Medicaid |
| COBRA | Continue coverage under employee health plan for up to 18 months or longer |
| ACA | Cheaper option compared to COBRA, with lower monthly premium payments |
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What You'll Learn
Losing job-based health insurance
Losing your job can be a stressful experience, and it's natural to worry about losing your health insurance along with it. However, there are several options available to ensure you remain covered.
Firstly, it's important to understand that regardless of whether you quit your job or are fired, your insurance options remain the same. If you lose your job-based health insurance, you can enroll in a Marketplace plan and may qualify for a Special Enrollment Period to get coverage for the rest of the year. This is applicable even if you are fired. To qualify for this Special Enrollment Period, you need to apply for Marketplace coverage within 60 days of losing your job-based coverage.
Marketplace plans are a popular option as they often cost less than COBRA for similar coverage, and you may be eligible for premium tax credits and other savings based on your income and household size. When enrolling in a Marketplace plan, you may need to provide proof that you lost your previous health insurance.
Another option to consider is COBRA, a federal law that allows you to maintain your previous health coverage temporarily after your employment ends. COBRA coverage typically lasts for 18 months or longer, but it requires you to pay the full cost of your coverage.
If you're in a state that has expanded Medicaid, you may qualify for Medicaid during the period you have no income. You can then switch to a private plan in the Marketplace when your income increases.
Lastly, if you are under the age of 26 and lose your job-based health insurance, you may be added to your parent's insurance plan as a dependent, depending on their plan's rules for enrollment.
Remember, it's essential to pay attention to timing when switching between insurance plans to ensure you don't miss any enrollment deadlines or special periods.
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Enrolling in a Marketplace plan
If you lose your job-based health insurance, you can enroll in a Marketplace plan. You will qualify for a Special Enrollment Period to get coverage for the rest of the year. To qualify for this Special Enrollment Period, you need to apply for Marketplace coverage within 60 days of losing your job-based coverage. Your coverage can start the first day of the month after you lose your job-based coverage.
To enroll in a Marketplace plan, you can use HealthCare.gov to create an account, apply for health coverage, compare plans, and enroll online. You can also apply by phone or get in-person help with your application. Each state's Marketplace has its own enrollment instructions. During the Marketplace open enrollment period each year, you can change your coverage during a special enrollment period if you experience a life event like moving or having a baby. You may also qualify for a special enrollment period if your household income is below a certain amount.
Marketplace premium subsidies have been more robust from 2021 through 2025 due to the American Rescue Plan and Inflation Reduction Act. The subsidy enhancements are scheduled to end by the end of 2025, after which the subsidy rules will revert to the original ACA rules. If you are in a state that has expanded Medicaid, you will qualify for Medicaid during the time that you have no income. You can then switch to a private plan in the Marketplace (with subsidies if you are eligible) or to an employer-sponsored plan if you get a job later in the year and your total annual income is more than 138% of FPL.
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Eligibility for premium tax credits
If you lose your job-based health insurance, you can enroll in a Marketplace plan and may be eligible for premium tax credits and other savings based on your income. The Health Insurance Marketplace, also known as the Exchange, is the place where you can find information about private health insurance options, purchase health insurance, and obtain help with premiums and out-of-pocket costs if you are eligible.
The Premium Tax Credit is a refundable tax credit designed to help eligible individuals and families with low or moderate incomes afford health insurance purchased through the Health Insurance Marketplace. The size of your Premium Tax Credit is based on a sliding scale. Those with lower incomes receive a larger credit to help cover the cost of their insurance.
For tax years 2021 and 2022, the American Rescue Plan of 2021 (ARPA) temporarily expanded eligibility for the premium tax credit by eliminating the rule that a taxpayer is not allowed a premium tax credit if their household income is above 400% of the Federal Poverty Line. To be eligible for the premium tax credit, your household income must be at least 100% and, for years other than 2021 and 2022, no more than 400% of the federal poverty line for your family size.
If you get the benefit of advance credit payments in any amount, or if you plan to claim the premium tax credit, you must file a federal income tax return and attach Form 8962, Premium Tax Credit (PTC), to your return. You claim the premium tax credit and reconcile the credit with the amount of your advance credit payments for the year on Form 8962.
There are certain exceptions to eligibility for the premium tax credit. For example, you cannot be claimed as a dependent by another person, and you are not eligible for the premium tax credit for coverage purchased outside the Marketplace. Additionally, if you are married and file your tax return using the filing status of married filing separately, you will not be eligible for the premium tax credit unless you are a victim of domestic abuse and spousal abandonment and can meet certain criteria.
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Applying for Medicaid
If you lose your job-based health insurance, you can enroll in a Marketplace plan and may be eligible for premium tax credits and other savings based on your income. You will qualify for a Special Enrollment Period to enroll to get coverage for the rest of the year. For this Special Enrollment Period, you need to apply for Marketplace coverage within 60 days of losing your job-based coverage.
Now, if you are specifically looking to apply for Medicaid, here is some information on that:
Medicaid provides free or low-cost medical benefits to eligible people with low incomes. Each state has its own requirements and programs, so eligibility varies depending on where you live. In general, Medicaid eligibility depends on at least one or a combination of factors, including income level, household size, disability status, and age.
To apply for Medicaid, you must be a resident of the state where you are applying for benefits. First, create an account with the Health Insurance Marketplace and fill out an application. If it appears that anyone in your household qualifies for Medicaid, your information will be sent to your state agency, and they will contact you about enrollment.
When you apply for Medicaid, you may need to provide certain information or documentation, such as proof of income, residency, citizenship or immigration status, and current health insurance information. Your state may also require you to provide information about your household size, any disabilities or medical conditions, and your current health insurance coverage.
It is important to note that not every provider accepts Medicaid. Therefore, it is recommended to locate a Medicaid or CHIP medical provider by checking with your state's Medicaid agency. Additionally, if your income is too high for Medicaid eligibility, your child may still qualify for the Children's Health Insurance Program (CHIP), which covers medical and dental care for uninsured children and teens up to age 19.
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Short-term health insurance plans
If you lose your job-based health insurance, you can enrol in a Marketplace plan and may be eligible for premium tax credits and other savings based on your income. You will qualify for a Special Enrollment Period to get coverage for the rest of the year, but you need to apply within 60 days of losing your job-based coverage. You may need proof that you lost health insurance through your job.
If you are unable to afford an ACA-qualified plan while you are between jobs, you might consider a short-term health insurance plan. These plans are not regulated by the ACA, and they use medical underwriting, don't cover pre-existing conditions, impose caps on benefits, and don't have to cover preventive care. Short-term health insurance plans are temporary and are designed to fill gaps in coverage when transitioning between plans. They are never sold in the marketplace and are not eligible for a special enrollment period for ACA-compliant plans. They typically offer fewer covered benefits and consumer protections, resulting in lower premiums.
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Frequently asked questions
Yes, you can enrol in an ACA Marketplace plan and may be eligible for premium tax credits and other savings based on your income. Losing your job-based insurance is considered an involuntary loss of coverage, so you qualify for a Special Enrollment Period to get coverage for the rest of the year.
You will likely lose your employer-sponsored insurance at the end of the calendar month in which you were fired. You then have 60 days from the date you lose your group coverage to apply for Marketplace coverage.
If you are unable to afford an ACA plan, you could consider a short-term health insurance plan. These are less expensive but are not regulated by the ACA, so they use medical underwriting, don't cover pre-existing conditions, and impose caps on benefits. You could also look into state-specific insurance programs, such as MassHealth in Massachusetts, which provides health insurance to individuals with little to no income.
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that allows you to keep yourself, your spouse, an ex-spouse, and your dependents on your former company's group health plan when your job ends. COBRA coverage can last between 18 to 36 months, but you will likely have to pay the full premium cost, which can be expensive. ACA plans are often cheaper, especially if you qualify for premium tax credits.
When choosing between COBRA and ACA, you should consider the cost of monthly premiums, deductibles, copayments, and other out-of-pocket costs. With COBRA, you get to keep your existing doctors and prescription medications, whereas with ACA, you can choose a health plan from your state's health insurance exchange, ensuring coverage for pre-existing conditions.
