Are there alternatives to COBRA?
Asked by: Lisette Ziemann | Last update: March 9, 2025Score: 4.5/5 (48 votes)
Is there a better option than COBRA?
Marketplace insurance, available through the Affordable Care Act, often offers more affordable premiums than COBRA. The cost difference can vary based on the chosen plan, location, and income, as subsidies may reduce premiums for marketplace plans.
What can I do instead of COBRA?
- You can enroll in a Marketplace plan within 60 days of losing your job-based coverage.
- Find Marketplace plans and prices to compare them to your COBRA coverage or offer.
- If eligible for Medicaid or CHIP, you can enroll in those programs any time and coverage can start immediately.
What is the COBRA loophole?
If you decide to enroll in COBRA health insurance, your coverage will be retroactive, meaning it will apply to any medical bills incurred during the 60-day decision period. This loophole can save you money by avoiding premium payments unless you actually need care during this time.
Can I choose ACA instead of COBRA?
You can choose either COBRA or ACA plans at any time of the year. That's different from the fixed open enrollment period you may have had with your former employer. Both allow you to enroll within 60 days of losing your health insurance coverage.
COBRA Alternatives - Health Insurance
How to avoid Cobra insurance?
- The employee is enrolled in or eligible for Medicare.
- The employee does not enroll within 60 days of receiving the notice of eligibility from the employer.
- The employee is covered by another health plan.
- The employee is fired for gross misconduct.
Why is COBRA so expensive?
COBRA coverage is not cheap.
Why? Because you're now responsible for paying your portion of your health insurance: The cost your employer contributed to your premium, in addition to the 2% service fee on the cost of your insurance.
How much does COBRA typically cost per month?
The average monthly cost of COBRA Insurance premiums ranges from $400 to $700 per individual.
How do I waive COBRA coverage?
If you are currently receiving COBRA coverage for which a premium is being paid and you wish to waive future coverage, you can simply refrain from paying the COBRA premium for that coverage period.
What is the 105 day COBRA loophole?
So, if you maxed out the 60 day election period plus the 45 day payment period, you could actually go 105 days without paying for the coverage.
Is COBRA even worth it?
While it may seem like a lot of money, COBRA may actually cost you less than what you'll pay on the open market. That's because you may still get your former company's group discount. You can also use a health savings account (HSA) to pay for your COBRA premiums. They're considered a qualified medical expense.
Can I decline COBRA?
You must decide to accept or reject COBRA coverage during a certain time period (usually 60 days after your employer notifies you). You must pay your monthly premiums or you can lose your coverage. Once you have used up all your COBRA benefits, you may be able to get an extension of coverage under Cal-COBRA.
How can I reduce my COBRA cost?
To reduce your COBRA insurance cost per month, one option is to see whether your employer offers other lower-cost plan options with a lower coverage level. This tradeoff could make sense if you're healthy. You can't switch plans immediately after losing your job.
What happens if I can't afford COBRA?
Instead of enrolling in COBRA continuation coverage, there may be other more affordable coverage options for you and your family through the Health Insurance Marketplace, Medicaid, or other group health plan coverage (such as a spouse's plan) through what is called a “special enrollment period.” Some of these options ...
Does health insurance end the day you quit?
When you leave or are let go from a job, your health insurance either expires on your last day of work or at the end of the month of your exit, says Andy Gillin, attorney and managing partner at GJEL Accident Attorneys. For example, if you quit on July 15th, your coverage usually continues until July 31st.
What are the cons of COBRA?
- It's expensive. Your premiums will probably go up since your employer isn't contributing. ...
- You're subject to your employer's plan offerings. You might lose COBRA coverage if the employer changes its plan or goes out of business.
What are alternatives to Cobra insurance?
If you can't afford COBRA continuation coverage, the ACA (Affordable Care Act), also known as Obamacare, is the best and most affordable option. Employees who lost their jobs can enroll in an Obamacare plan via the Marketplace during the open enrollment period that runs from November 1st through December 15th.
What if my employer did not offer COBRA?
What Happens when the Employer Fails to Comply with COBRA? The recommendation is to first try to work it out directly with the human resources department that provides the insurance. If you meet resistance with the employer on starting COBRA, you may call the Department of Labor to file a complaint.
Is COBRA a mandatory benefit?
COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) is a federal law that requires employers of 20 or more employees who offer health care benefits to offer the option of continuing this coverage to individuals who would otherwise lose their benefits due to termination of employment, reduction in hours or ...
Is COBRA cheaper than marketplace?
Both COBRA and ACA Marketplace plans have their advantages. COBRA lets you keep your exact employer-based plan but is often more expensive. ACA plans may be more affordable, especially with subsidies, but require choosing a new plan. The best choice depends on your financial situation and healthcare needs.
Can I get ACA instead of COBRA?
If you choose to enroll in COBRA, you can switch to ACA health insurance under the following circumstances: You have used up all of your COBRA coverage. You have another qualifying life event that makes you eligible for another Special Enrollment Period. It is the annual Open Enrollment Period.
How do you figure out COBRA cost?
If you want to figure this out on your own, ask HR how much your employer is contributing toward your monthly coverage. Then, check your pay stub to see how much you're contributing. After adding these figures, add another 2% (for the service fee). This will show you exactly how much you'll expect to pay for COBRA.
What to do when a COBRA is too expensive?
If COBRA feels expensive, consider ACA plans or short-term health insurance. Marketplace plans during the open enrollment period or a special enrollment period can offer more budget-friendly options.
Can I use Obamacare instead of employer insurance?
Answer: Legally speaking, you certainly can decide to purchase insurance through the online Healthcare Marketplace or health insurance exchange rather than choosing your employer's plan. Obamacare is available to everyone, whether or not their employers offer insurance.
Can I get a COBRA if I quit my job?
Yes, You Can Get COBRA Insurance After You Quit Your Job
COBRA allows you to keep your employer-sponsored health insurance for up to 18 months if your coverage ends due to job loss, quitting or termination.