Job changes are one of the most frequent qualifying event triggers for a special enrollment period. If you quit or lose your job and are offered COBRA benefits then in most states you’ll have a special enrollment period of up to 60 days before or after your last day of coverage under the group plan to open enroll in a new health insurance plan, either through a state based exchange or off-exchange.
However, if you elect COBRA coverage and decide that it’s too expensive, that does NOT count as a qualifying event, so it’s critical to shop for plans both on and off the exchange to compare those plans’ benefits and rates to your COBRA plan before the special enrollment period passes.
To make things more challenging, what is acceptable as a qualifying event varies by state, by exchange and even by insurance carrier. You really need to check with an experienced health insurance broker in your state to help you find out what options may be available both off-exchange and on-exchange.
While there are lots of life related qualifying events, most job related qualifying events are tied to a loss of employer sponsored coverage because people:
- Quit their job (and are offered COBRA)
- Are laid off from work (and are offered COBRA)
- Retire from work (and are offered group coverage or COBRA)
- Have hours reduced and are no longer eligible for health insurance
- Lose student health coverage when they graduate
- Have COBRA benefits that run out
- See more life related qualifying events
Watch Out! – Please remember that voluntarily ending coverage (including COBRA and retiree health plans) does NOT qualify you for a special enrollment period. Neither does losing coverage that doesn’t qualify as minimum essential coverage like a temporary insurance or min-med insurance plan. Also, not paying your premiums does NOT count as a qualifying event so it’s always wise to set up automatic premium payments so your coverage never inadvertently lapses.
Be sure to work with a reputable health insurance broker in your state to help you evaluate your plan options both on and off the insurance exchanges. Keep in mind that if you decline COBRA and your household income qualifies you for a premium tax credit, you will be able to enroll in coverage through one of the private insurance plans offered through your states’ exchange, without having to wait for an open enrollment period.
The COBRA Trap
COBRA can be an attractive option, but thanks to ObamaCare it’s no longer the only option for people with pre-existing conditions. Leaving your job and losing eligibility for employer sponsored health coverage triggers a special enrollment period that lasts for 60 days before or after your last day of coverage under the group plan (the day before COBRA would begin, if elected), so it’s important to shop for the best options right away.
You can apply for exchange health plans during the special enrollment period window and take advantage of any Advance Premium Tax Credits and Reduced Cost Sharing programs that you’re eligible for. Advance Premium Tax Credits are a type of federal subsidy that reduce your monthly premiums.
If you enroll in COBRA coverage through your former employer, however, you will need to wait to the next open enrollment period if you want to change plans. Again, voluntarily dropping your COBRA coverage or ceasing to pay your COBRA premiums will NOT trigger a special enrollment opportunity. You will have to wait until you exhaust your COBRA coverage or until the next Open Enrollment (whichever comes first) to sign up for other non-group coverage.
Be sure to work with a health insurance broker to help you review both your on and off-exchange insurance plan options. They can help you determine which carriers will accept your qualifying event and which has the best value on health insurance. There is no extra charge for their professional services. Colorado consumers please click here.
