Health Insurance for the Unemployed, from COBRA to Medi-Cal

Losing your job is hard enough, and it often means also losing your health insurance. But remember, when it comes to staying covered, you have options. You can avoid a lapse in insurance — and the financial penalty that comes with it — by understanding the options available to you and your family. Yes, this time can be overwhelming, but here’s a guide to help you through it.

Check Your Spousal Benefits

If your spouse or domestic partner has a job that provides health insurance, you might be able to get covered under their plan. He or she may need to contribute more to their employer-sponsored health insurance, but this is often an easy, lower-cost option.

What is COBRA Insurance

When you lose your job, you have a legal right to your former employer’s health insurance plan through the Consolidated Omnibus Budget Reconciliation Act or COBRA. This continuation of coverage is offered not only to you but also your spouse, a former spouse, and any dependent children. You have 60 days to enroll in COBRA once your employer-sponsored benefits end. You may even qualify if you quit your job or your hours were reduced. Other COBRA qualifying events include divorce from or death of the covered employee.

Some people choose COBRA because they feel strongly about keeping the same health care providers, but it comes at a cost. Because your employer will likely no longer be pitching in, you will be responsible for the full cost of the plan yourself — plus an administrative fee. Keep in mind that COBRA coverage typically only lasts 18 to 36 months.

Buying Health Insurance

You can also buy a health plan directly from an insurance company. If you’re shopping for a plan, explore Covered California, a free service that connects California residents with brand-name health insurance companies such as Anthem, Blue Shield, Kaiser, Health Net and more. Through Covered California, you will be able to shop for and compare various plans to find the one that works best for you.

Covered California offers financial help (in the form of a federal tax credit) to lower your monthly health insurance premium. This can make a huge difference, especially during times when money might be tight. Many pay $10 or less a month for a plan, but you’ll never pay more than 8.5 percent of your household income for a benchmark Silver plan.

Check Your Medi-Cal Eligibility

If your annual income is reduced due to job loss or another reason, Medi-Cal might be an option. Medi-Cal provides free or low-cost health insurance for qualified applicants including low-income families, people with disabilities, pregnant women and more. Check if you qualify here by matching your household size and your income. You can apply for Medi-Cal through Covered California as well.

Apply During Special Enrollment

While this is an important decision, don’t wait too long to choose a solution. Losing health insurance coverage — no matter if you were laid off, let go with cause, you quit, or any other reason — qualifies you to apply through Covered California 60 days before and after the date your coverage stops. This period is called special enrollment. You also qualify for special enrollment if your COBRA coverage runs out.

If you’re eligible for Medi-Cal, you can enroll at any time. If you’re not eligible and you have an annual household income at or below 150 percent of the federal poverty level, you can get coverage through Covered California year-round.

Losing your job can be a challenging life event, but know that you have the options and support you need to find a health insurance plan that’s right for you. Learn more about Covered California, and if you’re ready to get started on an application, you can do so here.