Plan Ahead: Using COBRA to Bridge the Gap in Health Insurance Coverage

Losing employer-sponsored health insurance can leave you with a coverage lapse. However, the Affordable Care Act (ACA) provides options to ensure uninterrupted coverage during this transition.

Understanding the Coverage Gap

Typically, employer-sponsored health insurance ends on the last day of employment. However, the ACA enrollment period for the Health Insurance Marketplace (also known as the exchange) runs from November 1st to January 15th each year. This means that if you lose coverage at a time outside these dates, there may be a gap in coverage.

Bridging the Gap with COBRA

The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows certain employees and their families to continue their employer-sponsored health insurance for up to 18 months after termination. To be eligible for COBRA, you must have worked for the employer for at least 20 hours per week for at least 12 months.

COBRA premiums are typically higher than those paid through your employer, and you are responsible for the full cost of the plan. However, COBRA can be a valuable way to maintain coverage while you explore your ACA options.

Using COBRA with ACA Coverage

COBRA and ACA coverage can be used in conjunction to avoid a coverage gap. If you lose employer-sponsored coverage mid-month, you can use COBRA to cover the remaining days of the month. You can then enroll in an ACA plan starting on the first of the following month.

Example:

Last day of employer-sponsored coverage: August 20th
COBRA coverage: August 21st – August 31st
ACA coverage: September 1st

In this example, COBRA covers the period between when your employer-sponsored coverage ends and the ACA coverage begins.

Important Considerations

You have 60 days from the date your employer-sponsored coverage ends to elect COBRA.
COBRA premiums are due monthly, and you will be responsible for the full cost of the plan.
You cannot enroll in an ACA plan until your COBRA coverage expires or until you lose eligibility for COBRA.

Conclusion

Losing employer-sponsored health insurance can be stressful, but the ACA provides options to ensure uninterrupted coverage. By understanding the coverage gap and utilizing programs like COBRA, you can avoid being without the essential protection of health insurance. It’s always advisable to consult with a licensed insurance agent or call the HealthCare.gov customer service line at 1-800-318-2596 for personalized guidance.