ACA Mandate, Employer-Provided Health Insurance, and Changing Jobs

July 25, 2016 1:26 PM

My health insurance through my last job ended on May 31st. From what I understand, Obamacare requires me to get new health insurance within 60 days from that date. My health insurance through my next job will begin sometime after August 16th, which is more than 60 days from May 31st (but not by much!). What do I do?

Since I've had continuous health insurance through employers since ACA went into effect, I've never learned more than the bare minimum about the health insurance mandate... I'm sure there's plenty of information online that can help me--and I welcome you to point me to resources that are relevant to my situation--but I quickly got overwhelmed as I tried to search. I'm hoping some of you may understand the law well enough to be able to help me understand what I have to do.

I'm eligible for COBRA--does that matter? (I haven't signed up through COBRA yet, and I would rather not, given how dang expensive it is.) Is there short term coverage I can get? Is there some health insurance mandate official I can talk to on the phone or something, to help understand my options? Did I completely screw myself by waiting until now, instead of dealing with this back at the end of May?

posted by meese to Law & Government (7 answers total)

You could get an ACA plan and just terminate coverage when your new job starts, the problem is that you need the coverage to start asap to avoid a gap. I would call the number for the marketplace people and ask.

You can also accept your COBRA benefits and just pay for a few months coverage until you don't need it anymore.

You can also just pay the fine (it may be less than the COBRA fees). The problem is that you run the risk of a heart attack or car accident on August 1. Speaking as someone whose husband had a appendicitis as a healthy young man during the three month between graduation and the new job I am extremely adverse to going without some kind of health insurance in the US if you can possibly afford it.
posted by metahawk at 1:37 PM on July 25, 2016 [1 favorite]

Seriously, just get COBRA. You have 60 days to elect it (and your old employer should have sent you some info--they're required to). For the money, it'll probably be better than anything you could get through ACA, and it's only for a couple of months.
posted by the_blizz at 1:47 PM on July 25, 2016

My understanding as of last year when i had a similar situation is that you can avoid paying the penalty as long as you are not uninsured for 3 months. From the dates you've listed, it sounds like you should be ok from that standpoint as long as your new insurance starts before September 1. I would suggest keeping your COBRA paperwork with everything filled out and a check for all the premiums up on your fridge, because it can be elected retroactively. That way if something terrible does happen, you're just out the premiums and not on the hook for the full cost of whatever health care you needed. And if you don't need to elect it, you don't pay the premiums (which agreed, can be totally insane).
posted by rainbowbrite at 1:56 PM on July 25, 2016 [3 favorites]

COBRA premiums can be pricey. If you're generally healthy and just trying to avoid being bankrupted by a car accident in that month or two, you can go on your state's health marketplace (or the federal one if your state doesn't participate), pick out a plan, and then cancel it when you don't need it anymore. That's what I did recently. It's not cheap (especially if you limit yourself to plans without coinsurance), but it should be significantly cheaper than COBRA.

The problem with rainbowbrite's solution is that the mandatory election period for COBRA is only sixty days, which it sounds like you will exceed. Thus you will be exposed to the risk of catastrophe at the end of the period.
posted by praemunire at 2:11 PM on July 25, 2016

COBRA is crazy expensive!

Just wait until the new insurance starts. You're overthinking this. Look both ways before crossing the street for the next three weeks.
posted by shoesietart at 2:54 PM on July 25, 2016 [1 favorite]

Do a high deductible plan ($4000 - $7000) for the lowest premium and then cancel it when your new insurance kicks in. You're protected from catastrophe and it's cheaper than COBRA. The only problem is that you need to do this before the 15th of the current month in order to have insurance on the first of the upcoming month. So, you may have to pay COBRA retroactively and continuing forward until your new job. Or, there may be insurance companies who can have something kick in on the first of the month (but I don't know anything about this). I'm not an expert; I could be wrong about something in here.
posted by zeek321 at 2:58 PM on July 25, 2016 [1 favorite]

If your new coverage starts in August, you should be fine under the Short Gap Exemption:

You’re considered covered any month you had minimum essential coverage for even 1 day.

You may wish to bring up your situation with the HR department at your new job -- if they know about it, they may have the discretion to help make sure your coverage starts on say, August 31st, instead of September 1st (but maybe they don't... but it doesn't hurt to ask).

If you can't get yourself into the 2 month exemption, then it might make sense to run the actual numbers on your penalty. You only owe a penalty for the months that you were uncovered. Assuming your new coverage starts in September, you're looking at June, July, August, so you will only owe 1/4 of any scary looking "annual" penalties that you see. The actual penalty is very situation specific, but assuming you are only responsible for yourself and make more than $27,800 per year, figure the annual penalty will be 2.5% of your annual income (max ~$2500 -- based on the 2015 Bronze Plan average price being $207 per the IRS).

So, worst case, $625 for 3 months. At that price, it probably makes sense to find a super high deductible plan just for August. Assuming your credit is decent, I'm sure you can find something cheaper than $600, and you can just pay for the one month and you'll qualify for the short gap exemption.
posted by sparklemotion at 6:16 PM on July 25, 2016 [1 favorite]