Health Insurance: When Your COBRA Subsidy Expires

Last Updated May 24, 2010 9:55 PM EDT

If you lost your job last spring -- as so many Americans did -- your health insurance is about to get a lot more expensive. That's because the Federal government's COBRA subsidy expires after 15 months. In other words, once you've been out of work for that long, you'll have to pay your entire insurance premium on your own. Before that day arrives, take the time to research your options to provide your family with the most affordable and comprehensive plan possible.

You may recall that back in February 2009 the President signed The American Recovery and Reinvestment Act. This stimulus bill provides the unemployed a 65% subsidy for 15 months so they can better afford to keep their former employer's health insurance under COBRA. (COBRA is a federal law that requires certain employers to provide former employers with the option to keep -- and pay for -- their health coverage for up to 18 months after leaving a job.) That means anyone who lost a job last March will see their subsidy expire as soon as June, and the last three months are going to be full fare.

Since employer based health insurance is often more comprehensive than what many families will find on their own, the higher price tag can be worth it. (Keep in mind, however, that this is only a temporary solution since your COBRA benefits will expire in three months.)

Still, some families may do better by going out and finding a plan on the individual market. You can research plans by going to a website like or seeking out the advice of a professional insurance agent. As tempting as it may be, please make sure you don't shop based on price alone. Cheaper policies often offer fewer benefits. So make sure you read the fine print and know what you're getting.

I'll be honest, shopping for health insurance isn't easy. One way to learn more about your options is to check out's free webinar on Tuesday at 1 pm eastern time.

Whatever you do, don't delay especially if you or a family member has a preexisting condition. Thanks to HIPAA (Health Insurance Portability and Accountability Act of 1996), you may be able to purchase insurance without any exclusions as long as you had creditable health insurance for 18 months with a gap in coverage of less than 63 days. If you miss this window, you may have a very difficult time finding a comprehensive plan for your loved ones.

Is your COBRA subsidy about to expire? What do you plan to do?

Free Health Insurance Quote image by Toddshealthinsurance, courtesy of CC 2.0.

Stacey Bradford is the author of The Wall Street Journal. Financial Guidebook for New Parents.