Lost Your Job! Should You Do COBRA or ACA?
Many headaches and challenges come with losing your job. One of the first may include a change in your health insurance. COBRA coverage may be an option. However, there are other options such as a plan that is covered under the Affordable Care Act (ACA). How can you decide which one to choose, and how do they compare? You might be surprised at how easy it is to make the right decision and Fika Insurance Group is here to help.
What is the difference in COBRA and ACA, exactly?
MoWhen you see these options, it may feel like you're navigating through alphabet soup. Begin by learning the meaning of each.
COBRA, also known as the Consolidated Omnibus Budget Reconciliation (COBRA), allows you to keep on your employer’s group health plan at no cost, according to Chris Johnson, president of Fika Insurance Group, LLC. Cobra insurance covers you and your spouse, as well as any dependent children if they choose to join the plan.
The most important thing is that you'll be responsible for the entire cost of your premiums. Katie Keith JD, MPH says that there might be an additional 2% administration fee. Keith is an associate researcher at Georgetown University's Center on Health Insurance Reforms, Washington D.C. He specializes in the Affordable Care Act and private insurance.
ACA plans (or Affordable Care Act) are individual insurance plans that meet minimum essential coverage requirements and other requirements as set forth by the federal government.
Johnson says that many people believe that there's a government program called 'Obamacare,' or ACA with a separate market. But there isn't. "ACA is a law and not a healthcare policy. Every major medical plan must adhere to it."
Feeling overwhelmed? Fika Insurance Group can help you to sort through your options for insurance. You can start online right now or call us at 864 397-8866.
COBRA vs. ACA - How to Decide
There are many factors that can help you decide whether ACA or COBRA is right for you.
1. Think about the cost. Johnson states that COBRA is too costly for most people who have just lost their jobs. ACA plans are generally cheaper than COBRA rates. Johnson says that premium subsidies can be obtained if your adjusted gross income meets the guidelines, the amount of the subsidy that lowers your monthly premium will depend on your age, adjusted gross income, ZIP code, and who is on your tax return.
2. Check your deductible. Your deductible will be reset if you switch to an ACA policy. However, if you choose COBRA, any progress made towards your annual deductible while employed will be retained.
Keith states that when deciding between COBRA or ACA coverage, they should consider the amount they have spent on out-of-pocket expenses, their expectations of needing additional care, and the time of year.
If you are near the end of your plan year or calendar, signing up for COBRA might be a good idea. Then, you can switch to ACA coverage. You can calculate this by adding up the COBRA premiums for the remainder of the year to the out-of-pocket cost associated with an ACA plan.
Your remaining COBRA payments may be lower if you have met your deductible or are close to reaching your out-of-pocket maximum.
3. Consider whether switching doctors is something you are open to. Johnson says, "No matter what type of plan you have you must check if your doctor's in network." It's important to verify that your network is up to date.
Make sure your doctor accepts the plan you choose. Keith says this is particularly important if you have chronic conditions or ongoing healthcare needs and want to keep access to your providers for continued care.
4. Timing is important. People who lose their job-based insurance generally have a 60-day special enrollment period through ACA Marketplace. Keith states that this applies even if COBRA is offered to you. This means that you will have approximately two months to decide what to choose.
Keith explains that COBRA coverage must be maintained until the policy expires or the annual ACA Open Enrollment Period. If you decide to leave COBRA coverage, you can't change to marketplace coverage.
Which should you choose?
Answers will vary depending on your current situation. This includes everything from the medical needs of your family to the number of people on your tax return. The good news is that there are other options. The good news is that you don't have the responsibility of making this decision on your own. Local licensed professionals from Fika Insurance Group can assist you in reviewing your options and choosing the right plan for you. Call us at (864) 397-8866 or go online at fikainsurance.com.
WHAT'S NEXT FOR YOU?
Marketplace. Healthcare.gov Retrieved from https://www.healthcare.gov/glossary/marketplace/ November 12, 2021
Health Markets Retrieved from https://www.healthmarkets.com/resources/health-insurance/cobra-vs-aca/ December 29, 2021