Key Takeaways:

• COBRA Continuation: You may be eligible to temporarily continue your previous employer’s health coverage through COBRA, but it often comes with higher premiums since you’ll pay the full cost.
• Marketplace Plans: Consider enrolling in a Marketplace plan through HealthCare.gov, which might offer subsidies based on your income, especially if you’re between jobs.
• Short-Term Health Insurance: Short-term health insurance can provide temporary coverage, but it typically offers limited benefits and excludes preexisting conditions.

When you’re between jobs, keeping your health insurance is important. Going without coverage, even for a little while, can be risky if you have unexpected medical expenses. In 2022, about 26,073,700 individuals (8% of people in the U.S.) didn’t have health insurance, which shows how many are at risk of big medical bills without coverage.

According to a study by the Survey of Income and Program Participation (SIPP), people in the United States collectively owe at least $220 billion in medical debt. The study highlights that around 14 million Americans, or 6% of adults, have medical debt exceeding $1,000, while approximately 3 million people, or 1% of adults, face medical debt of more than $10,000.

Maintaining Dental and Vision Coverage

Most people in the U.S. get their health insurance through their jobs. But when you switch jobs or leave one, you might lose that coverage. Thankfully, there are options to make sure you stay covered during these gaps. The number of people using marketplace plans has grown a lot—over 21 million enrolled in 2024, compared to just over 11 million in 2020.

Knowing your health insurance options when you’re between jobs is key to protecting both your health and your wallet. Let’s look at what you can do to stay insured during this time.

Double-Check When Your Benefits End with Your Former Employer

Sometimes, your employer might keep your health benefits active after you leave your job. This could happen if you’re laid off, retiring, or if the company offers extended coverage as part of a severance deal. Having this extra time can help you transition without losing your health insurance right away.

To find out if your benefits will continue, check with your HR department about the exact end date of your coverage and any related paperwork. You can also confirm with your insurance company.

If you need dental and vision insurance, there are a few ways to get it. You can buy standalone dental, and vision plans that cover things like checkups, cleanings, eye exams, glasses, and more. These plans can be found through insurance companies or the Health Insurance Marketplace.

If you’re keeping your health insurance through COBRA, check if you can keep your dental and vision coverage as well. Some health plans might include these benefits, but often they need to be purchased separately.

Alternative Health Insurance Options

Losing your job-based insurance can feel overwhelming, but you have options to make sure you’re protected. Two of the most common ways to get coverage during this time are through COBRA and the Health Insurance Marketplace.

1. COBRA Coverage: COBRA allows you to keep your job’s health insurance after you leave, which is helpful if you’re in the middle of treatment or want to keep your current doctors. If your company had 20 or more employees, you’re likely eligible. You’ll have 60 days to decide if you want to sign up after receiving information from your employer, but you’ll need to pay the full cost, including the part your employer used to cover, which can be expensive. Still, COBRA is a good option to maintain your current coverage without switching plans.
2. Health Insurance Marketplace: The Health Insurance Marketplace is a government website where you can shop for health insurance if you don’t have job-based coverage. It allows you to easily compare plans, and if you lose your job-based insurance, you qualify for a Special Enrollment Period to sign up outside the usual timeframe. The process is simple: go online, enter your information, and see a list of available plans in your area.

Both COBRA and marketplace plans help you stay insured between jobs. COBRA lets you keep your current coverage but can be expensive, while marketplace plans, with potential subsidies, may offer a more affordable option depending on your budget and health needs.

Immediate and Temporary Insurance Options

If you’re between jobs or need coverage for a short time, there are alternative and temporary insurance options available. These plans can help bridge the gap until you find a more permanent solution, ensuring you stay protected and avoid unexpected medical costs.

Short-Term Health Insurance Plans

In most states, you can buy short-term health insurance, often called temporary insurance or short-term limited-duration insurance, which is designed for those with temporary gaps in coverage. These plans offer limited coverage for a short period, typically up to three or four months, and are meant to bridge the gap between more permanent health policies.

• Coverage Specifics: Short-term health insurance plans can help cover certain basic healthcare needs; these are not comprehensive coverage like with marketplace plans. They are designed to provide quick, temporary coverage when you need it most, such as when you’re between jobs or waiting for another type of insurance to begin.
• Limitations: However, these plans come with significant limitations. Short-term insurance generally does not cover preexisting conditions like diabetes, heart disease, or mental health issues. They also typically exclude essential services such as prescription drugs, preventative care, maternity care, emergency services, and hospitalization. Additionally, there’s often no cap on out-of-pocket costs, and these plans don’t qualify for federal financial assistance. Short-term insurance also does not have to meet federal standards for comprehensive coverage, meaning you might face unexpected expenses.
• Short-term insurance can be useful during short periods of transition. It can be beneficial if you’ve missed the Affordable Care Act (ACA) enrollment deadlines, are waiting for your ACA or Medicare coverage to start, are between jobs, or have recently turned 26 and lost coverage under your parent’s plan. However, it’s important to note that even if you qualify for a short-term plan, it may not cover all your health conditions, especially if you have a complicated medical history.

Spousal or Parental Plan Coverage

If you’re in between jobs and need health insurance, enrolling in your spouse’s or parent’s health plan is a great option. Here’s how you can do it.

To enroll in your spouse’s plan:

1. Check Eligibility: Confirm with your spouse’s HR department that you’re eligible to join their health plan during your job transition.
2. Enroll During Special Enrollment: Losing your job qualifies you for a Special Enrollment Period, giving you 30 days to join your spouse’s plan.
3. Complete the Forms: Ensure all required documents are attached and submit the enrollment form through your spouse’s HR department.

Once processed, confirm when your coverage begins under your spouse’s plan to ensure continuous protection.

To get added to your parents’ insurance plan you typically must:

• Be under the age of 26. This option is available whether you’re a student, living at home, financially independent, or even married.
• To get added, your parents will need to contact their insurance provider during the plan’s open enrollment period or a special enrollment period if you qualify.

Keep in mind that while you can be on your parent’s plan until you turn 26, the coverage typically ends at the end of the month in which you turn 26, so it’s essential to plan for when you’ll need to secure your own insurance.

Long-Term Health Insurance Solutions

If you’re seeking a long-term health insurance solution, consider options like individual plans, Medicaid, or subsidized ACA plans. Let’s explore these options to find the best fit for you.

Individual Health Insurance Plans

When you’re looking to buy an individual health insurance plan from the Marketplace, it’s important to understand a few key points to make the best choice.

• Costs: Your monthly premium can vary based on factors like your age, location, and whether you smoke.
• Coverage Levels: Decide on the level of coverage you want:
  • Bronze: Lowest monthly premiums, but higher out-of-pocket costs when you need care.
  • Silver: Balanced option with moderate premiums and out-of-pocket costs.
  • Gold and Platinum: Higher monthly premiums, but they cover more of your medical expenses.

When choosing a health plan, ensure it includes your preferred doctors and covers your regular prescriptions. Also, check if you qualify for subsidies, which can reduce your premiums and out-of-pocket costs.

Low-Income Options: Medicaid and Subsidized ACA Plans

If you’re looking for affordable health insurance and have a lower income, Medicaid and subsidized ACA plans might be great options for you.

• Medicaid: Provides free or low-cost health insurance for people with low incomes. Eligibility depends on your income, state, and family size. Contact your state’s Medicaid office or visit their website to check if you qualify.
• Subsidized ACA Plans: These plans, available through the Health Insurance Marketplace, offer financial assistance to lower your insurance costs. Eligibility for subsidies typically requires an income between 100% and 400% of the federal poverty level, with the amount of help based on your income, family size, and location.

You can apply for Medicaid through your state’s office or website, and for ACA plans through the Health Insurance Marketplace online, in person, or by phone.

When You Can Enroll in a Health Insurance Plan 

Knowing when you can sign up for health insurance is crucial. The Open Enrollment Period typically runs from November 1st to December 15th each year in most states. If you miss it, you’ll have to wait until next year unless you qualify for a Special Enrollment Period. Special enrollment happens after major life events like losing a job, getting married, or having a baby, giving you 60 days to enroll in the coverage you need.

Next Steps

We’ve covered several health insurance options, from keeping your employer’s plan with COBRA to exploring individual plans on the Marketplace and considering Medicaid. It’s important to make quick, informed decisions so you don’t risk being without coverage.

Immediate Next Steps

1. Your Options: Decide whether COBRA, Marketplace, Medicaid or another option is best for you.
2. Check Enrollment Periods: Make sure you know when you can sign up for the plan you choose.
3. Gather Necessary Documents: Have your info, income details, and any other required paperwork ready.
4. Apply for Coverage: Don’t delay—apply as soon as possible to ensure continuous coverage.
5. Confirm Your Coverage: Once enrolled, double-check that your plan is active and covers your needs.

By taking these steps, you’ll be well on your way to securing the health coverage that’s right for you.

FAQs

Can I negotiate health insurance coverage as part of my severance package?

Yes, you can try to negotiate extended health benefits as part of your severance package. Whether or not you’re successful depends on factors like your role in the company, the company’s policies, and the circumstances of your departure. It’s always worth asking, especially if continued health coverage is important to you.

What are the tax implications of choosing COBRA versus Marketplace insurance?

COBRA premiums are usually not tax-deductible unless you itemize your deductions and meet certain medical expense thresholds. Marketplace insurance, on the other hand, might qualify you for subsidies, which can reduce your premiums and lower your taxable income. Consider your financial situation when choosing between these options.

What should I do if I find a gap in my prescription coverage between jobs?

If you have a gap in prescription coverage, consider using discount programs, generic medications, or asking your doctor for samples. You might also check if your pharmacy offers a temporary supply until your new coverage kicks in.

Can I use a Health Savings Account (HSA) to pay for health insurance premiums?

Generally, you cannot use HSA funds to pay for health insurance premiums, except in specific cases like paying for COBRA, long-term care insurance, or health coverage while receiving unemployment benefits. Check the rules for your situation to see if your HSA can help.

How does a change in job affect my existing medical treatments and ongoing care?

When you switch jobs and health insurance, it’s important to ensure your new plan covers your ongoing treatments and preferred doctors. Contact your healthcare providers and the new insurance company to coordinate care, and make sure there’s no interruption in your treatment.

What are my health insurance options if I’m considering taking a career break?

If you’re planning a career break, you can consider COBRA for continued coverage, Marketplace plans with possible subsidies or even short-term health insurance for temporary gaps. Medicaid might be an option if your income is low during your break. Explore all options to find what best fits your needs during your time off.