Health Insurance Between Jobs

The 60-Day Window You Cannot Afford to Miss

When you lose employer-sponsored health insurance — whether through a layoff, resignation, or the end of a contract — you trigger a 60-day Special Enrollment Period for ACA marketplace plans and a 60-day COBRA election window. Both windows start on the date coverage ends. They run simultaneously.

This matters because many people assume they have more time. They do not. After day 60, the marketplace SEP closes and COBRA election becomes unavailable. If you miss both, you are uninsured until the next Open Enrollment period (November 1 through January 15) unless another qualifying event occurs. A single hospitalization while uninsured can cost more than a full year of premiums.

For most people leaving a job with a drop in income, a marketplace plan with subsidies is significantly cheaper than COBRA. For people at higher incomes or mid-treatment, COBRA may be the right call. The comparison takes about 20 minutes and a broker can do it for free.

Option 1: ACA Marketplace Plan

Losing employer coverage is a qualifying life event. During your 60-day SEP, you can enroll in any marketplace plan in your area. Coverage typically starts the first of the month following enrollment.

Why the marketplace is often the better deal

ACA subsidies are based on your projected annual income for the coverage year — not your income while you were employed. If you lost your job in July and expect to earn $35,000 total for the year, that is the figure used to calculate your subsidy. Job loss typically drops income, which increases subsidies.

The 2026 income benchmarks for a single adult:

• Below ~$21,000 (138% FPL, expansion states): Medicaid — likely free
• $21,000 to $23,500: $0 premium Silver plan typically available
• $23,500 to $47,000: Significant subsidies, Silver plan $0–$200/month typical
• $47,000 to $62,500: Subsidies still apply, Silver plan $200–$450/month typical
• Above $62,500: Enhanced subsidies cap benchmark Silver at 8.5% of income

A person earning $45,000 for the full year might pay $130 to $220 per month for a Silver marketplace plan — compared to $600 to $800 per month for single COBRA. The savings are immediate and significant.

What to watch out for

If your income ends up higher than estimated (you found a job sooner, received severance), you may owe back some subsidy at tax time. Estimate conservatively or take less advance credit. You can claim any remaining credit when you file.

Option 2: COBRA Continuation Coverage

COBRA lets you keep your exact employer plan — same network, same doctors, same pharmacy — for up to 18 months. You pay the full premium plus a 2% administrative fee.

Typical 2026 COBRA costs

• Single coverage: $550 to $850 per month
• Employee + spouse: $1,200 to $1,700 per month
• Family coverage: $1,700 to $2,400 per month

Your actual COBRA premium is in the election notice your former employer must send within 14 days of coverage loss. Use that number for the comparison.

When COBRA is the right call

• You are mid-treatment. Active treatment, surgery recovery, ongoing specialist relationships — switching plans and networks mid-treatment is risky. COBRA keeps everything continuous.
• Your income is high and the gap is small. At higher incomes where subsidies are limited, COBRA and marketplace premiums may be close. Network continuity may be worth the difference.
• You expect a new job with benefits within weeks. COBRA can be cancelled anytime. A short COBRA stint may be simpler than marketplace enrollment if benefits are imminent.

The critical rule: decide before electing COBRA

Once you elect COBRA, switching to a marketplace plan requires waiting for Open Enrollment unless another qualifying event occurs. Voluntarily dropping COBRA does not trigger an SEP. Do the comparison before electing COBRA, not after.

Option 3: Medicaid

Medicaid enrollment is open year-round with no 60-day deadline. If your income after job loss falls below 138% FPL ($21,597 for a single adult in 2026) and you are in an expansion state, you likely qualify immediately. Coverage is typically free or very low cost.

In non-expansion states (Texas, Florida, Georgia, and others), income thresholds are much stricter. Check marketplace options if you are in a non-expansion state. Apply through healthcare.gov or your state Medicaid office directly — approval can happen within days.

Option 4: Short-Term Health Insurance

Short-term plans are available outside enrollment windows and can start quickly. They are medically underwritten, can exclude pre-existing conditions, do not cover all essential benefits, and carry no subsidy eligibility. They are best as a short bridge — covering a gap of a month or two when employer coverage is coming soon and neither COBRA nor a marketplace plan makes sense for the duration.

Practical Steps: What to Do This Week

1. Get your COBRA notice. The exact premium is listed there — the starting point for the comparison.
2. Estimate your full-year income. Include what you earned before the job loss plus what you expect to earn the rest of the year.
3. Check marketplace options at healthcare.gov. Enter your estimated income and household size to see plans and premiums in your area.
4. Compare against COBRA. For most people at moderate incomes, the marketplace is dramatically cheaper.
5. Enroll before day 60. Do not let the window close.
6. Update income mid-year if things change. Starting a new job or earning more than expected? Update your marketplace application to reduce advance credits.

Going Freelance After Your Job

Leaving a W-2 job to freelance is one of the most common transitions we see. Income becomes variable, and the marketplace is suddenly your primary coverage option. Key points:

• Base your income estimate on what you expect to earn freelancing this year, not your old salary
• Self-employed health insurance premiums are deductible on Schedule 1, reducing MAGI and potentially increasing subsidy eligibility
• Update your income estimate as your business ramps up — underestimating is common among new freelancers and leads to repayment bills

Call (713) 575-9904 and a licensed broker will run the full comparison for your situation at no cost.