If you have lost your job or chose to quit your job, can you apply for an ACA health insurance plan instead of taking COBRA and, if so, can you qualify for a subsidy and cost-sharing? Also, under what conditions does the ending of COBRA or losing your job qualify as a qualifying event? There are not clear answers to all of these questions. Let’s look at what is clear first and then what isn’t so clear.
The definitive source for ACA information is healthcare.gov. While I don’t guarantee the information is correct, I don’t see how the government could contest information on their own website.
Let’s look at the clear situations:
- Leaving your job: You can choose not to receive COBRA during open enrollment or outside of open enrollment in order to apply for an ACA plan. You can also qualify for a subsidy and cost-sharing plans depending on your family size and income. https://www.healthcare.gov/what-if-i-am-losing-job-based-insurance/
- COBRA ending (running out/expiring) outside of open enrollment: This is the same. You can get an ACA plan. This is considered losing minimal health coverage so it is a qualifying event.
That part is clear. Now let’s look at what isn’t so clear:
- Cancelling COBRA during open enrollment: One link says you cannot qualify for a subsidy or cost-sharing if you cancel COBRA (https://www.healthcare.gov/what-if-i-am-losing-job-based-insurance/), while another link states that you can qualify in this scenario (https://www.healthcare.gov/what-if-i-currently-have-cobra-coverage/). In this case, the 2nd link is more specific to this scenario, so I would believe this would be the correct answer in this case.
- Cancelling COBRA outside of open enrollment: This is the part that isn’t clear. None of the info on healthcare.gov specifically covers this example. There is another link where it does state that this would be a qualifying event. Here is the quote: “Losing your COBRA coverage qualifies you to buy health insurance in the Marketplace, even if it’s not during open enrollment. This is true whether your coverage runs out, or you choose to end it.” Here is the link where I found the info: http://www.usa.gov/Citizen/Topics/Health/HealthInsurance.shtml#COBRA:_Keep_Your_Insurance_If_You_Leave_Your_Job. In this case, I don’t believe this info. From what I have read, it doesn’t appear cancelling COBRA will be a qualifying event.
So, in summary, when leaving your job, you can qualify for a subsidy and cost-sharing depending on your income and family size. If you have COBRA, you can switch to an ACA plan during open enrollment or when your COBRA expires, but it appears that you are unable to cancel your COBRA outside of open enrollment and have it be a qualifying event to apply for an ACA plan.
Clear as mud, right? More to come…