What you need to know when faced with deciding between COBRA versus Individual Health Insurance Affordable Care Act.

There are a few rule changes that you should consider if you are facing deciding between COBRA versus Individual Health Insurance Affordable Care Act.  The Affordable Care Act did make major changes to when you can enroll in individual insurance plans.  These enrollment periods are during the Annual Enrollment Period (AEP) during October 1st and December 15th.  For 2015 the AEP was modified to be November 15th to February 15th.  The other time you are eligible to enroll is with a Special Enrollment Period (SEP).  SEP does give you the opportunity to enroll in an individual insurance plan (either direct from the insurance company or through the Marketplace with no added cost for using an agent).  Items that give you and your family a SEP here are some of the Qualifying Events:

• Marriage or divorce
• Having a baby, adopting a child, or placing a child for adoption or foster care
• Moving your residence, gaining citizenship, leaving incarceration
• Losing other health coverage – IMPORTANT: Voluntarily ending coverage doesn’t qualify you for a Special Enrollment Period. Neither does losing coverage that doesn’t qualify as minimum essential coverage.

If you have one of these happen to you, you have an opportunity to enroll in an individual health insurance plan.  Most special enrollment periods last 60 days from the date of the qualifying life event.

The particular Qualifying Life Event I will discuss the losing of other health coverage – such as loosing group coverage through a downsizing at your company.  You will usually be offered COBRA, which continues the same coverage that you had when you were part of the group.  You will be offered to pay the full premium plus 2% administrative charge.

One of the changes that went into effect on July 1st, is that if you pay the first month premium for COBRA, you will not be able to switch to an individual plans until an AEP.  If you are considering putting off looking for an individual plan and go the easy route and just take COBRA, you can be stuck with it until the next calendar year AEP.  This is a big change in how the individual insurance market used to be before ACA where you could change insurance plans every month.  ACA you are limited to these enrollment periods.

Don’t procrastinate in deciding which way you want to go either COBRA or an Individual Health Insurance plan.  The other item you should know is that to get coverage for the next month, you need to apply for coverage by the 15th of the month with an individual carrier.  If you enroll on Marketplace with or without subsidies, you can get coverage by enrolling by the last day of the month for the first of next month.  I do not understand why the government site allows you to make the late enrollment enrollment exception for SEP, but I have seen it work with many customers.

If you are confused on the plan options, COBRA vs Individual plan, please get assistance from a local insurance agent/broker.  I have seen many customer sign up with out assistance and find themselves with a plan they did not understand.  The agents can help you find the best solution for your family even if it is to take the COBRA coverage.