Health Insurance Options When Leaving a Job

If leaving a job means losing your health insurance, you can get coverage through a government health care exchange or another insurer, or you can stick with your employer's plan for up to 18 months.

 photo of man leaving office with box of materials.
(Image credit: Getty Images)

Question: I'm thinking about leaving my job and starting my own business, but I'll lose my health insurance from work. Can I sign up for coverage through HealthCare.gov now, or do I have to wait until open enrollment?

Answer: You usually need to wait until open enrollment to buy individual health insurance, but you can get coverage anytime during the year if you're eligible for a "special enrollment period." To qualify, you must have experienced one of several life changes, which include leaving your job and losing your employer health coverage; moving to a new zip code; getting married; having a baby or adopting a child; or losing health insurance because you got divorced or legally separated. If you qualify for a special enrollment period, you usually have up to 60 days following the event to enroll in a new health insurance plan. See Healthcare.gov (opens in new tab) for more information about special enrollment periods.

To shop for coverage, start by going to HealthCare.gov. Depending on your state, either you'll be able to buy individual health insurance at the site or you'll find a link to your state's health insurance marketplace. If your income is less than 400% of the federal poverty level ($48,240 for singles, $64,960 for couples or $98,400 for a family of four in 2018), then you'll qualify for a subsidy to help pay the premiums of a policy you purchase through HealthCare.gov or your state's health insurance marketplace. Use the tool at HealthCare.gov (opens in new tab) to see if you qualify for a subsidy.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%
https://cdn.mos.cms.futurecdn.net/flexiimages/xrd7fjmf8g1657008683.png

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of Kiplinger’s expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of Kiplinger’s expert advice - straight to your e-mail.

Sign up

If your income is higher than the cut-off point, you can still buy a policy through the marketplace, but you won't receive a subsidy. You may also want to compare the costs and coverage of policies offered through a health care exchange to policies that are being sold outside of the marketplace, such as directly from an insurer, through an agent or at a website such as eHealthInsurance.com (opens in new tab). Your state insurance department may also have information about health insurance available in your state. See www.naic.org/map (opens in new tab) for links.

Another option is to continue your current coverage under COBRA. That's the federal law that allows people to stay on their employer's plan for up to 18 months after leaving a job. COBRA coverage tends to cost more than individual insurance because you have to pay both the employer's and the employee's share of the cost. You would, however, have the same provider network and cost-sharing arrangements that you have now. Ask your employer about your options.

People who want to change health insurance plans midyear and don't qualify for a special enrollment period need to wait until the next open-enrollment period to buy a new policy. Open enrollment for coverage starting in 2018 ran from November 1 to December 15, 2017. No open-enrollment period has been set for choosing 2019 coverage, although it may be similar to last year's. Some states also have longer enrollment periods.

Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.