Choosing COBRA or other health insurance options if you're between jobs or lost your coverage through work
If you lose your job, become furloughed or experience reduced hours at work, you may lose your health insurance coverage though your employer. If you're in one of those situations or if you're between jobs, COBRA is one health insurance coverage option you may consider. In some cases, however, you may find that COBRA doesn't fit your needs or budget. In that case, there are other coverage options you can also consider, like short term plans or Affordable Care Act (ACA) plans. Let's review what may be available to you if your job situation changes and it impacts your health insurance coverage.
What is COBRA?
COBRA stands for the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). With COBRA, you can continue the same coverage you had when you were employed. That includes medical, dental and vision plans. You cannot choose new coverage or change your plan to a different one. For example, if you had a medical plan and a dental plan, you can keep one or both of them. But you wouldn’t be able to add a vision plan if it wasn’t part of your plan before COBRA.
Do I qualify for COBRA and how do I pay for it?
You may qualify for COBRA coverage if your job situation has changed. Here are some of the ways you may qualify:
- You lost your job, either voluntarily or by the decision of your company (for any reason except gross misconduct) and you have lost your health coverage
- You had the number of hours per week you work reduced so you no longer get benefits and you have lost your health coverage
Under COBRA you’ll have to pay the full premium for your coverage, plus an administrative fee. When you’re employed, your employer generally pays for some of the cost of your health insurance. That means you’ll likely be paying more for COBRA – and it may get expensive, depending on the kind of coverage you have.
COBRA has been expanded through the American Rescue Plan Act of 2021 (ARPA)
On March 11, 2021, the American Rescue Plan Act of 2021 (ARPA) was signed. This act includes a 100% subsidy for COBRA continuation coverage premiums for:
- Those who experienced involuntary job loss
- Those who experienced a reduction in hours of work leading to a loss in coverage
In other words, COBRA premiums would be covered at 100% for assistance eligible individuals (AEI), as defined under the Act, from April 1, 2021 through September 30, 2021.
What other coverage options may be available if I'm between jobs?
Depending on your needs and situation, there are a number of other heath insurance options, besides COBRA, that may offer the coverage you're looking for. You may qualify for no cost or low cost plans — or you may want to look into short term plans for temporary coverage that can fill the gap until you find a longer term solution.
Choosing COBRA vs. other health insurance coverage options
Looking at the variety of available plans may help you compare both cost and coverage levels before you decide which plan may work best for your situation.
Health insurance coverage options
|Type of coverage|
|Affordable Care Act (ACA) or Marketplace plans that may offer lower cost coverage options|
|Short term health insurance||
Temporary health plans that fit almost any lifestyle or budget1, 2
|TriTerm medical insurance||
Short term health insurance plans lasting nearly 3 years3
|Medicaid||No cost or low cost plans for people with lower incomes|
|Children's Health Insurance Program (CHIP)||No cost or low-cost coverage for infants, children and teens|
|Medicare||Plans for people 65 or older or those who may qualify because of a disability or special condition.|
UnitedHealthcare Exchange plans
Learn about Affordable Care Act (ACA) or Marketplace plans.
Short term health insurance plans
In times of change, find short term solutions that help you bridge the gap.
- Product design and availability vary by state. Term lengths available vary by state.
- Short term health insurance plans are medically underwritten and do not provide coverage for preexisting conditions. TriTerm Medical plans cover eligible expenses for preexisting conditions after 12 months on the plan.
- The coverage term is one day less than 3 years. In SC, plans are three 11-month terms. In IN and OK, plans are three 364-day terms. This coverage does not qualify as "Minimum Essential Coverage" as defined in the Affordable Care Act and may not cover all Essential Health Benefits in your state. And, while enforcement of the federal tax penalty is not occurring in 2019, some states may impose a tax penalty if you do not have MEC coverage.