Navigating U65 If You’re Between Jobs

Losing job-based health insurance is often one of the most difficult parts of changing employment. It can mean suddenly facing high medical costs without coverage in place. Whether you’ve been laid off, left your job voluntarily, or are starting a new role with a delay in benefits, a gap in health insurance can leave you financially vulnerable if a medical issue arises.

If you’re under 65 and not eligible for Medicare, there are several ways to maintain coverage during this transition. Options like COBRA, Marketplace plans, short-term policies, and Medicaid each come with their own costs, rules, and coverage considerations.

To help you find the right solution, this guide breaks down the most common insurance options available between jobs and explains how to choose a plan that fits your situation.

What Happens to Your Health Insurance When You Leave a Job?

Job changes trigger a countdown clock for your health coverage. Understanding these critical timelines helps you avoid dangerous gaps in protection.

Coverage End Date

Your employer-sponsored health insurance typically ends on your last day of employment or at the end of the month in which you leave. Some employers may extend coverage as part of a severance package, so check with your HR department for your specific end date.

Special Enrollment Period Window

Losing job-based coverage triggers a Special Enrollment Period (SEP) that allows you to enroll in new health insurance outside the standard Open Enrollment Period. This SEP gives you 60 days from the loss of coverage to secure a new plan.

COBRA Notification Timeline

If your previous employer had 20 or more employees, they must notify you about your right to continue your existing coverage through COBRA. You’ll receive this notification within 30 days of your coverage end date, and you’ll have 60 days to decide whether to elect COBRA coverage.

Unlike annual open enrollment periods where you can take time to compare options, job loss creates an urgent timeline. You’ll need to make decisions quickly to avoid gaps in coverage that could leave you vulnerable to high medical costs.

U65 Health Insurance Options Between Jobs

Several paths exist to maintain health coverage between jobs. Each option offers different trade-offs between cost, coverage, and convenience.

COBRA Continuation Coverage

The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to maintain your employer-sponsored health insurance for a limited time after leaving your job.

Pros:

• Maintains the same coverage, benefits, and provider network you’re already familiar with
• Provides continuous coverage for ongoing treatments or medications
• No need to meet new deductibles if you’ve already met them for the year
• Available to your dependents who were on your plan

Cons:

• Expensive premiums—you pay both your portion and what your employer previously contributed, plus a 2% administrative fee
• Limited duration—typically 18 months (with possible extensions to 36 months in certain situations)
• Must enroll within 60 days of losing coverage

COBRA is often a good option if you’re in the middle of treatment with specific providers or have already met your deductible for the year. However, the high cost of COBRA premiums means many people look for more affordable alternatives.

ACA Marketplace Plans

The Affordable Care Act (ACA) established Health Insurance Marketplaces where individuals can purchase comprehensive health insurance plans, often with financial assistance.

Pros:

• Multiple plan options with different levels of coverage (Bronze, Silver, Gold, Platinum)
• Premium tax credits and cost-sharing reductions available based on income
• Coverage for essential health benefits and pre-existing conditions
• No time limit on coverage as long as you pay premiums

Cons:

• New provider networks may differ from your previous employer plan
• You’ll start with a new deductible even if you met one on your previous plan
• Must enroll within 60 days of losing job-based coverage

Marketplace plans have become increasingly affordable due to expanded subsidies. In fact, 93% of Marketplace enrollees received premium subsidies in early 2024, making this option attractive for many between jobs. You can estimate your potential savings by using the Healthcare.gov plan finder tool.

Short-Term Health Insurance

Short-term health insurance provides temporary coverage designed to bridge brief gaps between comprehensive insurance plans.

Pros:

• Lower monthly premiums than COBRA or unsubsidized Marketplace plans
• Quick enrollment with coverage often beginning within 24 hours
• Flexible duration options (though limited by recent regulations to 3 months plus a 1-month extension)
• Available year-round without special enrollment periods

Cons:

• Limited benefits compared to ACA plans
• May exclude pre-existing conditions
• Not considered minimum essential coverage
• Not available in all states (14 states and D.C. prohibit these plans)

Recent changes have limited short-term plans to “no more than three months with a maximum coverage period of four months,” according to HealthMarkets. These plans work best for healthy individuals who need catastrophic protection during a brief coverage gap and expect to obtain comprehensive insurance soon.

Medicaid or State Programs

Depending on your income level during unemployment, you may qualify for Medicaid or other state-sponsored health programs.

Pros:

• Low or no-cost coverage
• Comprehensive benefits
• No enrollment period restrictions—you can apply anytime
• Immediate coverage once approved

Cons:

• Eligibility requirements vary by state
• Income limits can be strict in states that haven’t expanded Medicaid
• Provider networks may be limited

Medicaid eligibility is based on current income, not previous earnings, making it a viable option during periods of unemployment. Nearly 1.5 million people fall into the “coverage gap” in states that haven’t expanded Medicaid, so check your state’s specific eligibility requirements.

Spouse or Parent’s Plan

Job loss is considered a qualifying life event that triggers a Special Enrollment Period for employer plans.

If your spouse or parent has employer-sponsored coverage, you may be able to join their plan during a Special Enrollment Period.

Pros:

• Often more affordable than individual coverage
• May offer comprehensive benefits similar to your previous employer plan
• Simplified enrollment through your family member’s employer

Cons:

• Must enroll within 30 days of losing your coverage (shorter than the 60-day window for Marketplace plans)
• May increase premiums for your spouse or parent
• Limited to those with eligible family members who have coverage

How to Choose the Right Plan

Choosing the right health insurance between jobs involves more than comparing monthly premiums. To find a plan that fits your needs and budget, it’s important to consider the full picture, including coverage limits, out-of-pocket costs, provider networks, and eligibility requirements.

Follow the steps below to evaluate your options and make an informed decision during your coverage gap.

1. Assess Your Healthcare Needs

• Review your typical healthcare usage (doctor visits, prescriptions, specialists)
• Consider any ongoing treatments or planned procedures
• Account for family members’ healthcare needs if they’re on your plan

2. Compare Total Costs

• Monthly premiums
• Deductibles, copayments, and coinsurance
• Out-of-pocket maximums
• Potential subsidies or financial assistance

3. Evaluate Provider Networks

• Check if your preferred doctors and hospitals are in-network
• Consider the breadth of the provider network if you relocate
• Verify coverage for any specialists you regularly see

4. Review Prescription Coverage

• Confirm your medications are covered in the plan’s formulary
• Compare prescription costs across plans
• Check for prior authorization requirements for specialty medications

5. Consider Coverage Duration

• Estimate how long you’ll need temporary coverage
• Factor in waiting periods for benefits at your next employer
• Weigh the flexibility to cancel or change plans as needed
• Using comparison tools can simplify this process.

 The Healthcare.gov plan comparison tool helps you evaluate Marketplace plans, while insurance brokers can provide personalized guidance across multiple options.

Avoiding Common Mistakes

Many people make costly errors when managing health insurance between jobs. These warning signs help you steer clear of potential pitfalls.

Missing Critical Deadlines

The 60-day Special Enrollment Period after losing job-based coverage passes quickly. Mark your calendar and apply before the deadline to avoid being uninsured.

Automatically Choosing COBRA

Many people select COBRA without exploring potentially more affordable Marketplace options with subsidies. Always compare costs across all available options.

Overlooking Subsidy Eligibility

Even with severance pay or unemployment benefits, your reduced income might qualify you for premium tax credits or cost-sharing reductions on Marketplace plans.

Fixating on Monthly Premiums

The plan with the lowest monthly premium isn’t always the most economical overall. Consider all out-of-pocket costs based on your expected healthcare usage.

Canceling COBRA Prematurely

If you cancel COBRA before exhausting your coverage period, you won’t qualify for a Special Enrollment Period on the Marketplace. You’ll have to wait until the next Open Enrollment unless you experience another qualifying life event.

Planning Ahead for Future Job Transitions

Smart preparation before leaving a job makes health insurance transitions smoother and less stressful. These proactive steps protect your coverage.

Build a Premium Reserve

Set aside money specifically for health insurance premiums during potential job transitions. Aim for at least 3-6 months of premium costs.

Research Options in Advance

Explore available health insurance alternatives before quitting or changing jobs so you can make informed decisions quickly.

Coordinate Employment Dates

When possible, coordinate your employment end date and new job start date to minimize gaps in employer-sponsored coverage.

Maintain Essential Documents

Keep records of your coverage end date, COBRA eligibility notice, and other insurance documentation to facilitate smooth transitions.

Consider Timing Strategically

If feasible, plan job changes around the annual Open Enrollment Period (November-January) when you have more flexibility to select new coverage.

FAQs

How long do I have to sign up for new coverage after losing my job?

You typically have 60 days after losing job-based coverage to enroll in a Marketplace plan through a Special Enrollment Period. For COBRA, you have 60 days from either the date coverage would end or the date you receive the COBRA election notice, whichever is later. To join a spouse’s employer plan, you usually have 30 days from loss of coverage.

Can I cancel COBRA early if I find a new job with benefits?

Yes, you can cancel COBRA at any time if you gain new employer-sponsored coverage. There’s no penalty for ending COBRA early when you obtain other qualifying coverage.

Is short-term insurance considered minimum essential coverage?

No, short-term health insurance is not considered minimum essential coverage under the Affordable Care Act. It doesn’t have to comply with ACA requirements like covering pre-existing conditions or providing essential health benefits.

What happens if I miss the deadline to enroll in new coverage?

If you miss both the COBRA election period and the 60-day Special Enrollment Period for Marketplace plans, you’ll likely have to wait until the next annual Open Enrollment Period (typically November-January) to get comprehensive coverage, unless you experience another qualifying life event or become eligible for Medicaid.

Can I get dental and vision coverage between jobs?

Yes, dental and vision coverage options are available between jobs. You can continue these benefits through COBRA if they were part of your employer plan, purchase stand-alone dental and vision plans, or choose a Marketplace plan that includes these benefits.

Conclusion

Managing health insurance during a job transition can be challenging, but understanding your options puts you in control. Whether you choose COBRA to maintain continuity, explore Marketplace plans for potential savings, consider short-term coverage for temporary gaps, or qualify for Medicaid while unemployed, acting quickly is essential.

The goal is to avoid going without coverage. Start researching early, compare more than just premiums, and pay close attention to enrollment deadlines. Prioritizing health insurance during this time helps you stay protected while managing costs.

Keep in mind that the best choice depends on your individual circumstances. Your healthcare needs, budget, and timeline should guide your decision.

With thoughtful planning and a solid understanding of what’s available, you can bridge the insurance gap with confidence and focus on your next career step without added stress.

If you’re between jobs and unsure which health insurance option is right for you, help is available. Get a quote or speak with a licensed agent today to review your choices, compare costs, and find a plan that fits your needs and budget.