Lost your job? You have 60 days to sort out health insurance

Losing a job usually means losing health insurance at the end of the month — sometimes the same day. You have options, but they come with deadlines, and the obvious choice (COBRA) isn't always the cheapest.

Your three main options

1. COBRA — keep the plan you have

• Available if your employer had 20 or more employees (many states have "mini-COBRA" laws for smaller employers)
• Same doctors, same plan, deductible progress carries over
• You pay the full premium — both your share and what your employer used to pay — plus up to a 2% admin fee. That's often several hundred to over $1,000 a month for an individual, more for a family
• Usually lasts up to 18 months

2. A Marketplace (Affordable Care Act) plan

• Losing job-based coverage gives you a Special Enrollment Period — you don't have to wait for fall open enrollment
• Depending on your income, you may qualify for premium tax credits that bring the cost down substantially — sometimes to very little
• Apply at HealthCare.gov or your state's own marketplace

3. Medicaid

• If your income has dropped enough, you may qualify — and you can apply any time of year
• Income limits depend on your state

Also check: joining a spouse's or partner's employer plan (losing coverage is a qualifying event there too), or, if you're under 26, a parent's plan.

The deadlines

• COBRA: you have 60 days from when you get the election notice (or lose coverage, whichever is later) to sign up. Coverage is retroactive — if you elect within the window and pay, it covers you back to the day the old coverage ended
• Marketplace: you have 60 days after losing coverage to enroll (you can also apply up to 60 days before, if you know it's coming). Coverage can start the first of the month after you lose job-based coverage

The trap: dropping COBRA later

If you sign up for COBRA and later cancel it voluntarily, that generally does not open a Special Enrollment Period — you may have to wait until the next open enrollment to get a Marketplace plan. (COBRA running out at the end of its term does qualify.)

So compare before you commit:

1. Get your COBRA premium from the election notice
2. Go to HealthCare.gov (or your state marketplace) and preview plans and savings using your expected income for this year — a job loss mid-year often means you qualify for more help than you'd think
3. Check whether your doctors and prescriptions are covered by the Marketplace plans
4. Compare total cost: premiums plus your likely out-of-pocket spending

COBRA can make sense if you've already met most of your deductible this year, you're in the middle of treatment with specific doctors, or you'll only need it for a month or two until a new job's coverage starts.

Before your last day

• Refill prescriptions and schedule any appointments you can while still covered
• Ask HR exactly when coverage ends and when the COBRA notice will be sent
• If you have an FSA, spend it down — unused funds are usually lost. An HSA is yours to keep

Quick reference

• COBRA: same plan, full premium (+2%), elect within 60 days, retroactive
• Marketplace: 60 days after losing coverage; savings based on this year's income
• Medicaid: apply any time if your income dropped
• Voluntarily dropping COBRA later usually doesn't let you switch until open enrollment — compare first
• Use up FSA money before your last day