Key ideas

1. COBRA can cost the full premium plus 2%. Your old employer's share becomes yours. In the example, $500 + $150 + $13 = $663 a month.
2. You have at least 60 days to choose. The clock starts when your coverage ends or when you get the election notice, whichever is later.
3. Losing job coverage opens a Marketplace window. You get 60 days to enroll in a Marketplace plan. Dropping COBRA later on your own does not reopen it.

Vocabulary

COBRA

A federal law that lets you keep your employer's health plan after you leave the job or lose coverage, usually for up to 18 months, at up to 102% of the full premium.

Grace period

The time between the end of a credit card billing cycle and the due date, when new purchases are interest-free if you paid in full.

Special Enrollment Period

A window outside yearly open enrollment when you can sign up for or change health insurance because of a qualifying life event, like losing coverage or having a baby.

Tax credit

An amount subtracted directly from the tax you owe, so a $1,000 credit lowers your tax by $1,000.

Open enrollment

The yearly window when you can sign up for, drop or change health insurance and other benefits for the coming year.

Insurance deductible

The amount you pay yourself on a covered loss or medical bill before your insurance starts to pay.

Work it out

Dana was laid off. Her election notice shows her plan's full cost is $650 a month: her employer paid $500 and $150 came out of her paycheck.

1. Employer's share
2. Dana's old share
3. Full plan cost
4. 2% admin fee
5. COBRA premium
6. What she paid before
7. Extra each month

Check yourself

1. A plan's full cost is $800 a month. What is the most COBRA can charge?

   • A. $800
   • B. $816
   • C. $880
   • D. $1,200

2. How long does COBRA usually last after a job loss?

   • A. 6 months
   • B. 12 months
   • C. 18 months
   • D. Until you find a new job

3. Which of these opens a Special Enrollment Period for a Marketplace plan?

   • A. Losing job-based coverage
   • B. Deciding to stop paying COBRA
   • C. Finding COBRA too expensive after 3 months

Your turn

Find your COBRA election notice and write down the monthly premium and the election deadline. Then get a Marketplace quote at HealthCare.gov using your expected income for this year, and compare the two side by side.