What Are Your Options When Losing Health Insurance at Work?

Approximately 50% of people in the United States get their health insurance coverage through their employer. What happens to your health insurance coverage if you leave, or lose, your job?

Even if you have a pre-existing medical condition, such as a cancer diagnosis, you may have a number of options for comprehensive health insurance coverage, including: COBRA, Marketplace plan, another group health plan, Medicare, or Medicaid. Because you may be eligible more than one option, it is important to understand and compare your options to pick the best plan for you.

Here is some basic information about potential options you might have:

COBRA

COBRA is a federal law that allows eligible employees to keep their existing employer-sponsored health insurance plan after experiencing a “qualifying event.” COBRA Qualifying Events include loss of employment, loss of dependent child status, divorce or legal separation, death of covered employee, or the covered employee enrolling in Medicare. After choosing COBRA, you pay 100% of what your employer was paying for your coverage, plus a possible 2% administrative fee (for a total of 102%).

COBRA applies to private employers with 20 or more employees, or state or local governments. Most states also have a state COBRA law that covers employers with 2 to 19 employees. For more information, visit our Quick Guide to COBRA.

Marketplace Plan

You may be eligible to buy a plan through your state’s Health Insurance Marketplace. Employees who are eligible for COBRA, are also typically eligible for a Special Enrollment Period (SEP) to buy a plan, from a private health insurance company, through their state’s Marketplace. The SEP gives you 60 days from the loss of your employer coverage to buy a new plan in the Marketplace.

Plans sold in the Marketplaces are for a calendar year, meaning they typically go from January 1 through December 31. If you pick a plan mid-year, you will need to renew your plan or enroll in a new plan for the next calendar year, during the Fall open enrollment period.

Other Group Health Plan

You may be eligible for a SEP to move to a group plan that is available to you through another job that you might have, your spouse’s group plan, or if you are under the age of 26, you may be able to move to a parent’s group plan. Check the other employer’s plan for additional rules.

Medicare

If you are over the age of 65, or about to turn 65, you may also be eligible for Medicare. Medicare is a federal health insurance program that provides coverage for people ages 65+ and who are eligible for Social Security retirement benefits, have collected Social Security Disability Insurance benefits for 24 months, or have been diagnosed with ESRD or ALS.

Medicaid

You may be eligible for Medicaid in your state. Medicaid is a federal health insurance program that provides coverage to individuals with a low-income level. If you live in a state that expanded its Medicaid program under the ACA and you have a household income under 138% of the federal poverty level ($18,754 for an individual in 2022), you may be eligible for Medicaid. If you live in a state that has not expanded Medicaid, eligibility is based on having a low income level, low resource level (i.e., assets), and meeting another category of eligibility, such as getting Supplemental Security Income (SSI).

Watch Our Webinar

If you would like more information, you can watch the recording of our May 17th webinar on Options When Losing Health Insurance at Work.

Do you have other health insurance-related questions? Visit our Health Insurance Resources to learn more.