If your health insurance is provided by your employer as a part of your total compensation package, you will lose this coverage if you are laid off, fired or voluntarily choose to leave your job. The Affordable Care Act (ACA) does not change this. You do have options when it comes to maintaining health insurance coverage for yourself and your family. You may continue your current policy through COBRA, or you may enroll in a new policy through the health insurance marketplace.
COBRA Continuation Coverage
COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, is a law enacted in 1986 to ensure employees will have access to health insurance after losing a job. If you lose your job for any reason other than gross misconduct, your employer must allow you to continue in the company’s group plan for up to 18 months. Your employer is not required to contribute toward the cost of your premiums; you will be responsible for the entire amount. This can be quite costly, often unaffordable for the newly unemployed. As a result, only a very small percentage of those eligible have traditionally used COBRA. The average monthly cost of a family plan last year was nearly $1,400. Additionally, your former employer is allowed to add on a 2-percent fee for administration. But some relief came in recent years with the American Recovery and Reinvestment Act, which establishes a 65-percent subsidy for many Americans who are eligible for COBRA, but unable to pay the full cost of health insurance.
The Health Insurance Marketplace
A key provision of the ACA is the requirement that each state provides its residents with access to the health insurance marketplace through an online exchange. A handful of states have created their own exchanges; other states have left the administration of their exchange to the U.S. Department of Health and Human Services. In either case, you may shop for a health insurance policy by visiting the Healthcare.gov website.
Open enrollment for 2014 ends March 31. Open enrollment for 2015 is scheduled to run November 15, 2014 through January 15, 2015. If you lose your job outside of these dates, you are eligible for a special enrollment period. You must enroll within 60 days of losing your job to qualify for this.
When you apply through a health care exchange, you will be prompted to supply income information to determine if you are eligible for your state’s Medicaid program, tax credits and/or other cost-sharing reductions. Households with incomes between 138 and 400 percent of the Federal Poverty Level may be eligible for subsidies to help pay health insurance premiums. Tax credits are paid in advance, reducing the amount you must pay when purchasing a health plan through an exchange.
This article was written by Gillian Burdett. Gillian is a freelance writer covering all things home and living. Her work can be found on Examiner.com.
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