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raven860's avatar

What happens to your medical insurance when you quit your job now in the Obamacare days?

Asked by raven860 (2174points) July 2nd, 2015

I am over 26 and plan to quit my job soon. I am just not sure how the medical insurance part works given its now illegal to not have medical insurance. I am a healthy individual and rarely use my insurance. I won’t be quitting to move to a new job… I plan to go back to university in the fall and would like to have to some free time to prep for it before.

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18 Answers

Adirondackwannabe's avatar

As a student your income might be low enough you wouldn’t be subject to the penalty for not having insurance. Check with your tax guy. You might be able to keep your insurance under the COBRA rules but I’m not sure how quitting affects that.

janbb's avatar

You can take out a policy under AHCA if that’s what you want to do or you can wing it and pay the penalty. Look for plans on the healthcare.gov web site.

Tropical_Willie's avatar

Does your university have a plan that you can sign on as a student?

johnpowell's avatar

I got my plan through the state for 28 bucks a month. So it isn’t like there is some massive barrier to entry. Cobra wanted over 600 a month.

raven860's avatar

@johnpowell which state is that? I am in california

Judi's avatar

Go to healthcare.gov. Quiting your job is a qualifying event and you can get on the exchange. They will take your annual income into consideration to determine if you are eligible for subsidies or Medicaid.
There are also insurance agent who, at no cost to you, can help you navigate the system.

jerv's avatar

As one who recently lost their job for medical reasons, my previous coverage ended with my employment. I could’ve kept it under COBRA, but that would’ve cost ~$900/month. But having our household income drop to roughly one-third of what it was, we easily qualified for Medicaid.

The penalty really only applies to those that can afford their own insurance but choose not to get it. That way, you won’t have rich people passing more of their expenses on to taxpayers to get richer, while at the same time it gives insurance companies incentives to offer low-cost options to those too wealthy to qualify for Medicaid but too poor to buy their own hospital. In other words, most Americans don’t have to worry about it unless they go out of their way to make it a problem for themselves.

@Adirondackwannabe My understanding is that voluntary separation ends all benefits immediately, as do most cases of “with cause” termination. However, those who are laid off, terminated for medical reasons, or otherwise have their employment ended through no fault of their own get things like COBRA.
It’s possible for an employer to lay you off two seconds before you quit though. If the parting is amicable, they might go that route.

raven860's avatar

@Judi Given I won’t be working for the next month or month and half… would my income be $0? If it is that brief of a hiatus ( I don’t have anything lined up but plan to do some work/study as soon as I get an opportunity)... should that affect anything?

I am going to do my own research but I figured I’ll ask while I am here. I did see change in employment is one one of the qualifying life changing events.

Judi's avatar

@raven860, I believe they will ask for your projected Annual Income. You don’t have to sign up to check it out. Give it a try!
There should also be a link to local agents in your area that can help you figure it out. Healthcare.gov

janbb's avatar

Check if there is health care offered through your grad school and which is cheaper. You may only need the Obamacare for a few months but you should get some basic coverage in case of a medical emergency.

Adirondackwannabe's avatar

@jerv No, I left a job voluntarily and I got COBRA coverage after.

jerv's avatar

@Adirondackwannabe Maybe it’s different between states then. I didn’t have that option the one time that I quit a job.

Judi's avatar

Obamacare would probably be cheaper than cobra if you qualify for any subsidy.

srmorgan's avatar

Since 1986, under COBRA, an employee who separates from an employer, no matter what the circumstances, is entitled to continue group medical benefits at their own expense for up to 18 months. The employer is required to offer group medical benefits to the former employee at the employer’s cost +2%. The employer must notify the employee of his/her rights under COBRA within 15 days, in writing – mentioning this in an exit interview is not sufficient – and the employee must notify the employer of acceptance and pay two month’s premium.

The only exception to this that I know of is in the case of a bankruptcy or other insolvency where the company goes out of business and group medical benefits contracts are cancelled for all employees.

SRM

Judi's avatar

Obamacare pretty much made Cobra Obsolete. You can usually get it much cheaper through the exchange.

janbb's avatar

@Judi Not necessarily true. Mine would have been twice as much for Obamacare as the Cobra plan I am on.

Judi's avatar

Our insurance price as a group was the same as the individual so we dropped the group since our two employees could get it cheaper with the subsidies.
You can get subsidies if you make up to 400X the poverty level and they DO go by annual income.

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