Get in under the wire: Affordable health insurance for those with COBRA coverage
By Consumers Union on Wednesday, June 4th, 2014
Losing your health insurance can be a scary experience, especially when it happens because of a job loss. A combination of federal and state laws, known as “COBRA” and “Cal-COBRA” (named after The Consolidated Omnibus Budget Reconciliation Act), allows most Californians who lose their jobs to hold onto their health insurance for up to 36 months. Coverage through COBRA requires enrollees to pay 102% of the cost of coverage − that is, to pay your share of the premium, your employer’s share, and an administrative fee. This can be a hefty cost, out of reach for many consumers.
Thanks to the Affordable Care Act, individuals who have recently lost job-based coverage may be relieved to discover that there is another, less expensive option: purchasing insurance through Covered California, our health insurance Exchange or “Marketplace.” For most people, buying coverage through Covered California will be less expensive than continuing previous job-based insurance under COBRA. People with low- and moderate- incomes are eligible for financial help paying for insurance through Covered California, which can substantially lower the cost of coverage.
When you apply through Covered California, you will find out if you qualify for free or low-cost insurance (Medi-Cal) or the Children’s Health Insurance Program (CHIP). You may also qualify for a tax credit to help reduce monthly premiums in a private plan, depending on your household size and income. The only place to get this important help paying for private insurance is through Covered California, not under COBRA. Shop on the Covered California web site and find out about the plans it offers, the benefits covered, each plan’s monthly premiums, and other costs like co-pays and deductibles. You can use a simple calculator (under Preview Plans) to see if you might qualify for cost reductions through Covered California plans or just see the monthly premiums in your area compared to what you are paying in COBRA.
Note: After July 15th, once you opt into COBRA, you can’t drop it to enroll in a plan through Covered California until open enrollment begins again in November 2014 or if you experience an event that would qualify you for “Special Enrollment.” (For example, if your COBRA coverage ends after the full 36 months, that would qualify you for special enrollment.) For a limited time, through July 15th, there is the special exception described above that allows you to enroll in a Covered California plan and get financial help if you qualify, even if you are currently enrolled in COBRA coverage.
Take some time NOW to research the advantages offered by Covered California plans before getting locked into COBRA.