Short-Term Health Coverage During Job Transitions

COBRA is an option after losing job-based coverage, but it can be expensive because you pay the full premium yourself. It’s worth finding other ways to stay insured that might better fit your budget. Consider the following coverage types:

• Marketplace Plans: Comprehensive coverage that may qualify for cost-saving subsidies.
• Short-Term Medical: Temporary insurance to bridge the gap between jobs.
• Supplemental Plans: Options like accident-only or telehealth for targeted, lower-cost protection.

Take a moment to compare these alternatives to find the right balance of cost and care for your situation.

COBRA coverage can be costly, often requiring you to pay the full health plan premium, which includes both your share and the portion previously paid by your employer, plus a 2 percent administrative fee. Monthly costs for individual coverage often range from $400 to $800, which can total more than $8,000 per year.

Short-term health plans, also known as “gap health insurance,” may provide a lower-cost option, which is often used by those who experience job loss. These types of short-term or temporary health insurance plans offer coverage for new illnesses and unexpected accidents.

The advantages of choosing an alternative over employer COBRA:

• Faster Access to Coverage: COBRA enrollment can be more involved and may take a few days to finalize, while short-term plans can begin as soon as the next day.
• More Flexibility: COBRA is fixed and hard to change. Short-term plans offer up to 1 year of coverage, choice in deductibles and let you pick your doctor.
• Lower Cost: COBRA is expensive without employer help. Private short-term plans cost significantly less.

Coverage availability is determined by state regulations, and certain states do not permit Short-Term Medical or Accident-Only plans. You can review the options allowed in your state. Find your state-specific guidelines to confirm availability.

Short-term health plans can provide medical insurance coverage for periods ranging from one month to up to one year, often starting as soon as the day after enrollment. For many individuals who experience a gap in health insurance, enrolling in short-term coverage may be more practical than continuing coverage under COBRA.

These plans offer flexible options that can be matched to coverage needs, health considerations, and budget, which may help maintain protection during times of transition.