“Would she qualify for an ACA Marketplace plan through a special enrollment period?” (Photo subject is a model.) – Getty Images/iStockphoto Dear Quentin,
My friend in Wisconsin was laid off and was told that her health insurance through her employer ends at midnight. She looked into COBRA, but the cost is absolutely ridiculous.
Do you have suggestions for affordable health-insurance options she could look into? Would she qualify for an Affordable Care Act Marketplace plan through a special enrollment period because she lost her job and employer-sponsored coverage?
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Also, could enrolling in college courses make her eligible for a student health-insurance plan that would be more affordable?
She’s desperate to find coverage.
Trying to Help
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With the ACA Marketplace, she has a 60-day window after the loss of her coverage to pick a plan. – MarketWatch illustration Dear Trying,
The ACA Marketplace or a state healthcare plan are the best options for your friend.
She is correct: Losing workplace health insurance qualifies your friend, or anyone else in a similar position, for a special enrollment period on HealthCare.gov. She has a 60-day window after the loss of her coverage to pick a plan. The ACA Marketplace may ask for documents, including an employer or insurer notice, to verify when her coverage came to an end.
The ACA Marketplace calculates her premium based on her age, location, household size and expected household income for the entire calendar year, not necessarily her own individual income. The most important takeaway at this juncture is that she can apply outside the normal open-enrollment period, given that she lost her job.
She may also qualify for an ACA subsidy. If she was earning, say, $45,000 before being laid off and, assuming she doesn’t have another job to go to, will earn significantly less for the remainder of the year, she will have to estimate her total income for 2026, which includes her salary up until the time she was laid off and unemployment benefits.
Universities offer student health plans, but premiums can range roughly from $1,500 to $3,000 or more for the academic year, and that doesn’t include tuition. Nor are they eligible for federal ACA Marketplace subsidies. Most students save more by staying on their parents’ health plan until 26, if eligible, or look into Medicaid or the ACA Marketplace, which brings your friend full circle.
Sticker shock
Don’t assume the ACA Marketplace will always be cheaper. She can apply for BadgerCare Plus through the ACCESS Wisconsin portal. BadgerCare Plus eligibility is based on current income, so this sounds like a good possibility for her. What’s more, there is no asset test for most adults under 65 who qualify through the rules based on their modified adjusted gross income (MAGI).
MAGI is calculated using your adjusted gross income, taking certain adjustments or deductions into account. It’s used to determine eligibility for certain tax deductions and credits, as well as certain government benefits and surcharges, according to Fidelity. The formula can also change depending on what benefits the individual is applying for.
If she applies through the ACA Marketplace and her income appears low enough for Medicaid rather than Marketplace subsidies, the application should likely be referred to the relevant state program. Given that she has just lost her job and her income has dropped substantially, tell her to check both BadgerCare Plus and ACA Marketplace plans before committing to COBRA.
People often get sticker shock when they investigate COBRA. As an individual, you are required to pay the full cost of your health-insurance plan, rather than just the portion that was deducted from your paycheck. You may actually be charged up to 102% of the premium — the amount your employer previously paid, in addition to your share of the premium and a 2% administrative fee.
COBRA can cost several hundred dollars a month for an individual, and family coverage can cost $1,500 or more per month, depending on the plan. Again, she likely has 60 days to elect COBRA, and once she pays the required premiums, her coverage can be applied retroactively to when her employer coverage ended.
To qualify for COBRA, the U.S. Labor Department says she must have been covered by her employer’s group health plan, the plan must be subject to COBRA, and she must experience a qualifying event that causes her to lose coverage. For most private employers, federal COBRA applies to plans maintained by employers with 20 or more employees.
The takeaway: Enrolling as a student or taking out COBRA are not the only options.
More columns from Quentin Fottrell:
My son does not work, yet pays $500 for Affordable Care Act health insurance. Is that fair?
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