Texas Cobra versus Obamacare (Exchange) Insurance
We may have some good news for you here.
Cobra can be very expensive after losing employer-based coverage but there are new subsidies on the Exchange market which can bring down the cost significantly.
On top of that, loss of employer coverage in the last 60 days is a qualifying event to enroll 1st of the following month!
Outside of open enrollment, we spend most of the year helping people compare Cobra and Texas Exchange options and pricing.
Here's our credentials:
Let's cover the following questions that come up daily so you can focus your particulars with us directly:
- Quick intro to Cobra and Texas Exchange (Obamacare)
- Difference between on and off-exchange in Texas
- The subsidy question is our first one to answer
- Comparing the networks between Cobra and Texas Exchange plans
- Short term options between employer plans in Texas
- How to quote and enroll in Texas exchange plans
Let's get started! Unless you have a few $1000 burning a hole in your pocket.
Quick intro to Cobra and Texas Exchange (Obamacare)
First, Cobra.
Cobra is continuation of your prior employer plan if you lose it (as long as not due to fraud or other similar issues).
When you lose employer coverage, you have a 60 day window from the last date of group coverage to elect Cobra. You should get a letter with the exact deadline for enrollment.
Watch out...Cobra is brutally strict about this election period and payment. They're looking for reasons to cancel!
The coverage will go retroactive back to the last date of coverage.
For example, let's say you were termed May 15th and your employer plan ran through the end of May (5/31).
It can take some time to get your Cobra election packet so let's say you don't "opt in" till July 7th (still within the 60 days).
The coverage will go back to 7/1! You'll have to pay for June and July even if you didn't use the plan.
That's just the way Cobra works. This can be blessing if something really big comes up as it's one of the few options that will go backwards for the effective date.
A few notes about Cobra:
- Cobra is the exact same plan you had while employed but now you're paying the full premium
- You can usually "piecemeal" coverage...enroll yourself and decline the kids, etc. Don't take dental. Ask prior HR department or carrier for rates
- Cobra is month to month, up to 18 months
- Cobra goes away if the underlying employer plan shuts down
- If the company changes carriers/plans, you should get an option to enroll under the new benefits
Those are the broad strokes but reach out to us at help@texasplans.com or 800-320-6269 with specifics on your situation.
There's zero cost for our assistance.
So...what about Texas exchange plans in context with Cobra?
Loss of employer coverage is a qualifying event that allows us to enroll anytime of the year as long as we do it within 60 days of losing the prior employer plan.
There are other triggers that can allow us to enroll so check with us.
We can pick from any of the Texas Exchange (also called Obamacare) plans in this situation and enroll the 1st of the month following applying.
Since 2014, the benefits are pretty comparable between employer plans and Exchange plans since they're mainly governed by the same ACA (Affordable Care Act) requirements.
You see the typical Bronze, silver, gold, and platinum.
Learn how to compare the Exchange metallic plans.
So...a Gold plan through an employer will be pretty comparable to a gold plan on the exchange, +/- 2%.
There are 2 big differences we need to look at when comparing the two which we'll discuss below:
- The subsidy on the Texas exchange
- Differences between networks
Before we go there, let's remove a piece of confusion for people leaving employer coverage.
Difference between on and off-exchange in Texas
Many people coming off of employer plans are confused by individual/family market.
The first big misconception is between on-exchange and off-exchange.
We have a whole comparison of on and off-exchange in Texas here but the key points:
- The networks are identical on and off-exchange (despite what a doctor's office might say)
- The benefits are same on and off-exchange (again, the metallic plans are standardized +/- 2%)
- The rates are the same on and off-exchange for equivalent plans
These days, roughly 99% of our enrollment is on-exchange and besides it being an easier process, here's the big reason why and it figures into Cobra versus Texas Exchange plans....Subsidies!
The subsidy question is our first one to answer
Based on income, you may be eligible for very large subsidies that reduce the cost of insurance for Texas Obamacare.
You can run your quotes here and we have a huge review on how to get the most subsidy:
We can't get this with Cobra coverage OR off-exchange (direct with the carrier).
This is found money people and it can be $1000's per month!
Most of our time these days is spent helping people figure out their income and household so we know how much subsidy is available.
You get it right away. Your monthly premium for a chosen plan will be reduced by this amount.
This is really the big deciding factor between Cobra and Texas Obamacare.
If a Cobra bill is $700/month and the equivalent (or better) Exchange plan is $150 after subsidies, that's pretty much the decision right there.
Depending on income, you may also be able to qualify for much richer versions of the silver plan at the same price.
More on the Texas subsidy income chart here.
Again, help@texasplans.com or 800-320-6269 regarding your situation. Let's make sure to get this calculation correct since it's complicated now (like taxes basically).
Zero cost for our assistance.
So...are we losing anything with Obamacare?
Comparing the networks between Cobra and Texas Exchange plans
The only counter to all this positive is around the networks.
Employer networks tend to be bigger and can be more flexible.
For example, the PPOs on the individual/family market have largely disappeared.
BCBS has a POS plan which is similar but still not the same.
You're likely to have HMO or EPO options (See Texas Obamacare network comparisons) and the networks will likely be smaller without access to out-of-State providers.
In the quote you run below, you'll see a provider finder link by each plan that you can check.
Local remote networks and carriers like Scott & White might make this a non-issue if that's where you frequent but just know that the networks are smaller for individual/family and more towards the HMO side of things.
Now...whether this loss of flexibility is worth that extra $500/month we mentioned above if eligible for a subsidy is question you have to ask yourself.
Happy to walk through it with you.
There is one more option available depending your needs and setup.
Short term options between employer plans in Texas
If we're definitely NOT qualifying for a subsidy and only need temporary health insurance, we can look at United Health's short term plan.
You can quote this here.
A few key notes:
- This can start midnight after enrollment if approved
- We can go month to month up to 360 days
- More catastrophic type coverage is available this way
- Pre-ex will have waiting periods and certain benefits are not available compared to Obamacare of Cobra
The real advantage of short term is cost if we can't get the subsidy on Exchange. That and we can apply any time during the year in case we missed our 60 days window for Cobra or on-Exchange enrollment.
Again, if you're in a bind, check with us to make sure we exhaust all the enrollment triggers.
Alright...so how do we quote the Obamacare options with that subsidy calculation?
How to quote and enroll in Texas exchange plans
You can quote both Texas Obamacare and Short term here:
A few notes to get the best quote.
- Try to estimate this year's income estimate (AGI on the 1040 tax form; next April's filing)
- Household is everyone that files together on a 1040 tax form even if not enrolling
We have a simplified online Texas Obamacare application available which can save your time and frustration.
On our side, we process it through the Exchange to make sure nothing will jeopardize your subsidy and we can catch issues on this side.
Of course, reach out with any questions at help@texasplans.com or 800-320-6269. There's zero cost for our assistance.