How Big Life Changes Can Impact Your Health Insurance

Life changes, including divorce, relocation, chronic illness, and even pandemic layoffs, can result in health coverage changes. Some of these changes, like layoffs, mean losing healthcare benefits. If you lose your job, here are some options to ensure your continued coverage.

Spouse’s or parents’ policy. Some states and organizations will allow that, but you must apply within 30 days of layoff.

The Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA lets you maintain your health coverage with your former employer if that employer continues to offer healthcare benefits and has at least 20 employees. With COBRA, you do not have to requalify, so your insurance covers preexisting conditions. However, you must apply within 62 days of a layoff, and you can use COBRA for only 18 months. Additionally, COBRA is more costly because your former employer pays none of the cost and you pay 100% plus a 2% administrative fee. Some states offer COBRA plans for smaller companies and with different time span coverages.

The Affordable Care Act (ACA). ACA offers a special enrollment period of 30 days after you lose healthcare coverage. Have your tax returns and an estimate of your yearly medical costs before going to healthcare.gov or calling the helpline at 1-800-318-2596. The ACA puts no time limit on coverages, covers more, cannot deny insurance because of preexisting conditions, and greatly reduces prescription costs. However, it is more costly for many people.

Private insurance plans. Most people qualify for these plans, but they work best if you make too much to qualify for ACA subsidies. Private insurance covers basic care and may offer other benefits, like a wider choice of prescription drugs.

As experienced health insurance agents, we can help you investigate these options to help you through the difficulties of a major life change before you make important healthcare decisions.