You’ve lost your job and need health insurance coverage while you’re looking for your next opportunity. Or maybe you got a new job, but your coverage won’t kick in until the 30, 60, or even 90-day waiting period is up. Life doesn’t stop if you’re dealing with a lapse in health insurance between jobs. So, what are you supposed to do to stay covered in the meantime?
Wondering, “What happens if I have a lapse in health insurance?” Don’t worry. There are several coverage options available if you’re facing a lapse in health insurance coverage.
What Happens If I Have a Lapse in Health Insurance?
Some states have an individual health insurance mandate in place, so depending on where you live, you may be required by law to have qualifying health insurance coverage and could face a penalty if you are uninsured for three months or longer. California, Massachusetts, New Jersey, Rhode Island, Vermont, and Washington, D.C. all have penalties.
6 Health Insurance Options If You’re Between Jobs
If you are dealing with a lapse in health insurance between jobs, don’t worry: you have coverage options so you can get the health care you need at a price that suits your budget. Here are six options for health insurance if you’re between jobs.
1. Short-Term Health Insurance
Short-term health insurance is an affordable option if you want coverage for unexpected medical emergencies, but cannot afford a COBRA premium or an Affordable Care Act (ACA) major medical plan. Short-term medical plans include benefits for a variety of medical services, including doctor visits, emergency room and urgent care visits, hospitalization, and ground ambulance trips.
Short-term health insurance typically has lower monthly premiums that many ACA major medical plans because it does not cover pre-existing conditions, mental health services, or pregnancy care. However, it can be a good option if you don’t need all of the coverage included in an ACA major medical plan.
You can keep a short-term health insurance plan for up to one year with the option to renew coverage for up to two additional years, depending on where you live. And unlike the Health Insurance Marketplace, you can apply at any time, and some benefits kick in the very next day.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a law that helps employees maintain their job-based health insurance for a limited time if they are experiencing qualifying circumstances, such as a job loss, furlough, reduction in work hours, gap between jobs, etc.
If you recently lost your job and your company has at least 20 employees, including full-time and part-time workers, COBRA could be a health insurance option for you.
The main benefit of COBRA is that it’s an extension of your job-based benefits. Your coverage stays the same, but the price to you could change. You could pay the plan’s entire premium for coverage up to 102% of the plan cost, and your employer can keep 2% to cover administrative costs. It’s one of the more expensive options if you need health insurance coverage between jobs.
3. Health Insurance Marketplace
Typically, the ACA major medical plans offered through the Health Insurance Marketplace are only available during the annual Open Enrollment Period. However, losing job-based health insurance qualifies you for a Special Enrollment Period (SEP), so you’re eligible to shop for a plan outside of Open Enrollment.
A SEP starts the moment your job-based benefits stop and lasts for 60 days. During this period, you have 60 days to apply for coverage and pay your first premium. Keep in mind that Marketplace plans have limited effective dates, so your coverage may not kick in immediately.
You may qualify for subsidized coverage, which is based on income. Medicaid and the Children’s Health Insurance Program (CHIP) are examples of subsidized coverage (more on those below). Some Marketplace insurance plans with premium tax credits are also referred to as subsidized coverage.
Marketplace plans offer many different major medical plans, each categorized by Bronze, Silver, Gold, or Platinum levels. Bronze plans feature the highest deductibles and lowest premiums, and Platinum plans have the lowest deductibles and highest premiums. The price you pay for an ACA major medical plan depends on several factors, like your zip code, family size, whether or not you use tobacco, whether you qualify for a premium subsidy, etc.
Medicaid is a health insurance option for low-income earners, families and children, pregnant women, and those with disabilities. Eligibility is based on your income and the state you live in. Medicaid coverages and costs vary from state to state, although all programs include benefits for:
- Family planning services
- Rural health clinic services
- Inpatient and outpatient hospital care
- Home health care
- Transportation to medical care
- Physician services
- Pediatric care, and more
Unlike the Health Insurance Marketplace, there is no enrollment period for Medicaid. You may apply at any time through the Marketplace or your state’s Medicaid agency, making it a great option if you’re dealing with a lapse in health insurance coverage. If you are interested in Medicaid, please note that not all physicians accept it, and you may be limited to your program’s provider network.
If you are facing a lapse in health insurance coverage and have children, you may be eligible for the Children’s Health Insurance Program (CHIP). CHIP provides low-cost pediatric care for families who earn too high of an income to qualify for Medicaid.
Cost and coverage for CHIP vary by state. However, no matter where you live, comprehensive care is included so your children can receive health care for:
- Doctor visits
- Routine check-ups
- Dental and vision care
- Inpatient and outpatient hospital care
- Emergency services
- Laboratory and X-ray services
6. Private Health Insurance
If you’re curious about other options during a lapse in health insurance coverage, you may want to connect with a private health insurance agent who can compare plans and prices and complete your enrollment for you.
A private health insurance agent helps you find the best plan for your needs, whether that is a short-term health plan, an ACA major medical plan, or another option. They are a resource who can answer your questions and help you understand the policy you purchase. Plus, they are paid by the company they work for, so you aren’t required to pay them for their services.
If you’re facing a lapse in health insurance between jobs, you have alternative coverage options. Vera Health offers short-term medical insurance with low monthly premiums, flexible term limits, and renewability options. Pay for the coverage you want, not for the coverage you don’t.
Find out whether short-term health coverage is a good fit for you! Visit us online or call 844-260-7226 to chat with a Vera Health expert who can help you find the right plan for you, even if it’s a major medical plan.
Short-term health insurance is not required to comply with federal market requirements for health insurance, principally those contained in the Affordable Care Act. Be sure to check your policy carefully to make sure you are aware of any exclusions or limitations regarding coverage of preexisting conditions or health benefits (such as hospitalization, emergency services, maternity care, preventive care, prescription drugs, and mental health and substance use disorder services). If this coverage expires or you lose eligibility for this coverage, you might have to wait until an open enrollment period to get other health insurance coverage.