In the past, people who lost their job-based health insurance had little choice but to continue coverage at their own expense under COBRA.
But with passage of the Affordable Care Act, the loss of employer-based coverage is now considered a “qualifying life event.”
That means you can buy health insurance without waiting for the national open enrollment period – a move that could save you thousands of dollars.
COBRA is a federal law allowing employees who lose their job-based coverage to keep their plan for up to 18 months. Enrollees must pay both the employee and employer portion of their premiums, so this option can be costly.
Now the good news: One study found that people eligible for COBRA who buy insurance on their own instead may save up to $2,750 a year for individual coverage or $8,674 a year for family coverage.
Given the potential for savings, you may want to consider these factors if you become eligible for COBRA:
- If costs aren’t a concern, you may prefer to keep your plan by enrolling in COBRA.
- Compare coverage options beyond COBRA. Check out plans sold in the private marketplace as well as in the Health Insurance Marketplace that offers discounted coverage depending on your income and family size.
- Keep track of deadlines. You have 60 days after losing job-based coverage to enroll in COBRA. Otherwise, you must wait until the next open enrollment period and risk getting a tax penalty if you are uninsured for more than two months.
If you have more questions about enrolling in health insurance and how the Affordable Care Act impacts you and your finances TurboTax has you covered. You can go to TurboTax Health to get your questions answered.