Can I apply for ACA insurance if I’m on COBRA?

Eligibility
Written By Jerdon Johnston

Is it possible to switch to an ACA plan if I am currently on COBRA health insurance?

Yes, you can switch to an ACA Marketplace plan if you are currently on COBRA health insurance. There are specific circumstances when you can make the switch, either during the Open Enrollment Period or if you qualify for a Special Enrollment Period (SEP). Here’s what you need to know about transitioning from COBRA to an ACA plan:

1. Switching During the ACA Open Enrollment Period

  • You can switch from COBRA to an ACA plan during the Open Enrollment Period, which typically runs from November 1 to January 15 each year. If you enroll in an ACA plan during this period:

    • You can drop your COBRA coverage once your ACA plan starts, ensuring you don’t have a gap in coverage.

    • Open Enrollment allows you to switch regardless of whether your COBRA coverage is ending or continuing.

How to Make the Switch:

  • Visit tsunamihealth.com during Open Enrollment to apply for coverage.

  • Compare the available ACA plans and select the one that best meets your needs.

  • Make sure to coordinate the start date of your new ACA plan with the end of your COBRA coverage to avoid any gaps in health insurance.

2. Switching During a Special Enrollment Period (SEP)

  • If you are outside the Open Enrollment Period, you may be able to switch to an ACA plan if you qualify for a Special Enrollment Period (SEP). You can become eligible for an SEP if you experience a qualifying life event, such as:

    • Losing your COBRA coverage: If your COBRA coverage is set to expire or if you are no longer able to afford COBRA premiums, you may qualify for an SEP to switch to an ACA plan.

    • Voluntarily ending your COBRA coverage: If you choose to end your COBRA coverage before it expires, you may still qualify for an SEP, but it's important to check the timing. You must take action within 60 days of losing COBRA or deciding to drop it.

    • Experiencing other qualifying events: Events like getting married, having a baby, or moving to a new state can also trigger a Special Enrollment Period, allowing you to switch from COBRA to an ACA plan.

Important Note: Simply dropping COBRA coverage without a qualifying life event may not automatically trigger a SEP. You must experience a qualifying event, such as losing COBRA or facing a major life change, to switch outside of Open Enrollment.

3. Why Consider Switching from COBRA to an ACA Plan?

COBRA can be a valuable option if you lose your employer-sponsored health coverage, but it often comes with high premiums because you are responsible for the full cost of the plan (both your portion and your former employer’s portion). Here are some reasons to consider switching to an ACA plan:

  • Lower premiums: Depending on your income, you may qualify for premium tax credits in the ACA Marketplace, which can significantly reduce your monthly premium costs.

  • Cost-sharing reductions: If your income qualifies, you may also be eligible for cost-sharing reductions (CSRs), which can lower your deductibles, copayments, and coinsurance.

  • Broader choice of plans: The ACA Marketplace offers a range of plan levels (Bronze, Silver, Gold, and Platinum) with varying premiums and out-of-pocket costs, allowing you to choose a plan that fits your needs and budget.

4. What Happens if You Keep COBRA?

  • If you decide to remain on COBRA, you can stay on that coverage for up to 18 months (or longer, in some cases) after losing your employer-sponsored health insurance.

  • You may choose to stay on COBRA if you’re happy with your coverage, but keep in mind that you’ll continue to be responsible for paying the full premium.

  • Once your COBRA coverage expires, you will qualify for an SEP, allowing you to enroll in an ACA plan.

5. Coordinating the Transition to an ACA Plan

If you decide to switch from COBRA to an ACA plan, it’s important to coordinate the timing of your coverage:

  • Make sure that your ACA plan starts the day after your COBRA plan ends to avoid any gaps in coverage.

  • Notify your COBRA administrator that you are ending your coverage once your ACA plan begins. This ensures that you won’t be charged for overlapping coverage.

6. How to Apply for an ACA Plan

  • You can apply for an ACA plan through tsunamihealth.com during the Open Enrollment Period or during a Special Enrollment Period if you qualify.

  • Provide information about your household income and family size to determine if you qualify for premium tax credits and cost-sharing reductions.

  • Once you’re approved for coverage, you can select a plan and set the start date to align with the end of your COBRA coverage.

Key Takeaways:

  • You can switch from COBRA to an ACA Marketplace plan during the Open Enrollment Period or if you qualify for a Special Enrollment Period (SEP) due to a qualifying life event.

  • ACA plans may offer lower premiums and out-of-pocket costs than COBRA, especially if you qualify for premium tax credits or cost-sharing reductions.

  • Be sure to coordinate your switch so that your ACA coverage starts as soon as your COBRA coverage ends to avoid gaps in coverage.

For personalized help with transitioning from COBRA to an ACA plan, schedule an appointment with a Tsunami Advisor here: Schedule an Appointment.

Jerdon Johnston
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