Exploring Cobra Alternative Coverage Options

Ambetter Health Alternatives to COBRA Insurance

If you are between jobs, or expect to be soon, you may qualify for a special enrollment period for Marketplace insurance.

October 17, 2024 | 6 min read

 

There are a few different ways to maintain your health insurance coverage between jobs. The first solution that comes to mind for most people is COBRA. But COBRA coverage can be expensive and inflexible. The good news is that it's not the only option available.

Loss of job-based health insurance is considered a qualifying life event that makes you eligible for a 60-day special enrollment period (SEP). During this time, you can sign up for a health plan through the Health Insurance Marketplace with no penalty. Not only is this a good way to maintain your coverage, it's also an opportunity to customize it to better meet your needs.

   

   

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Understanding COBRA

COBRA stands for Consolidated Omnibus Budget Reconciliation Act. It is a federal law that allows you to maintain health insurance coverage if you lose your job or have another qualifying life event.

COBRA is available if you were enrolled in a job-based health plan and your employer had 20 or more full-time employees. With COBRA, you can extend the same plan you had under your employer for 18 to 36 months. COBRA provides short-term continuity, but your monthly premium is likely to increase once you leave your job.

Your new payment under COBRA will depend on your plan and whether your employer helped cover it. Most likely, you’ll be responsible for the full cost of the monthly premium plus a 2% administrative fee, which could drive the cost up significantly.

Not only are Marketplace health insurance plans typically less expensive than COBRA, most Marketplace applicants (91% in 2022) qualify for at least some government subsidy to help pay their premiums.1 The amount of the subsidy depends on your income, where you live and the size of your family.

Pro Tip

It’s easy to find out if you qualify for subsidies with Ambetter Health; enroll online to see how much you can save.

   

Benefits of Health Insurance Marketplace as COBRA Alternatives

  • Cost Savings
    Marketplace health insurance plans may be less expensive than COBRA, and you may qualify for subsidies to further offset the cost.
  • Customized Coverage
    Perhaps you need to add family members to your plan, or you're interested in switching to a doctor in another network. When your healthcare needs change, your insurance plan should keep up.
  • Portability
    Your new coverage starts as soon as you sign up. If you get a new job that doesn’t offer affordable health benefits, you can keep your Marketplace coverage. 
  • Special Enrollment Opportunity
    Take advantage of the special enrollment opportunity available when you are between jobs. But don’t wait too long; you must sign up within 60 days of your job loss or other qualifying event to be eligible.

Comparing COBRA and Marketplace Plans

With COBRA, your plan remains the same even as your premium goes up. There is no opportunity to adjust your coverage.

Perhaps you want to add dental or vision benefits to your plan. You might find it’s more cost effective with a new Marketplace plan than with your job-based health insurance.

Maybe you’d like to switch to a new provider network or maximize your savings with a lower cost option. A qualifying life event like the loss of a job presents an opportunity to customize your coverage to better fit your healthcare needs now.

With Ambetter Health, you can choose a premium healthcare plan that fits your needs and your budget.

Read more about healthcare plans from Ambetter Health.

Making the Switch to Ambetter Health

If you are losing your employer-provided health plan and don’t want to sign up for coverage under COBRA, you will have 60 days to enroll in a Marketplace plan.

If you already have COBRA insurance, you may still be able to switch to one of our Marketplace plans. A loss of health insurance or a change in your plan’s cost would both be considered qualifying life events. This means that if your COBRA plan is running out or if the premiums increase, you can sign up within the 60-day special enrollment period.

Frequently Asked Questions

Marketplace health insurance plans must meet the minimal essential coverage requirements of the Affordable Care Act (ACA). Health plans offer benefits similar to the ones covered by employee-sponsored health plans, including preventive care, prescription drug coverage and emergency healthcare. Some offer additional benefits like dental and vision care. You can enroll on the Health Insurance Marketplace or directly with the insurance carrier.

You can enroll in a Marketplace health insurance plan during the 60-day special enrollment period (SEP) after a qualifying life event. If you haven’t experienced a qualifying life event or if you miss the SEP, you can sign up during the Open Enrollment Period (OEP). The OEP occurs each year from Nov. 1 to Jan. 15.

All three plan types cover your minimum essential health benefits, but they have different premium levels and out-of-pocket (OOP) costs. Bronze plans generally have lower premiums but higher OOP if you need a lot of care. Gold plans have high premiums that help limit OOP. Silver plans provide the best value for most people in terms of premium costs vs. OOP – especially if you qualify for financial assistance.

Sources:

1. Centers for Medicare & Medicaid Services. Effectuated Enrollment: Early 2023 Snapshot and Full Year 2022 Average. March 15, 2023.  

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