Most people who are currently employed and have employer-sponsored health insurance are basically left out of the Obamacare health insurance exchange outreach effort. They get the benefits of other parts of the law—an end to lifetime caps, preventive services without copay, no more pre-existing condition discrimination, no more discrimination for being a woman—but aren't really targeted for information about the health insurance exchanges. They should be, because there's a big potential benefit for them in it: an alternative to expensive COBRA coverage
if they lose their job, but they have to be aware that Obamacare is an option.
Today, the only option for many laid-off workers is to continue their employer-provided coverage for up to 18 months under the federal law known as COBRA. Because they have to pay the entire premium plus a 2 percent administrative fee, however, the coverage can be a financial hardship for people who are scrambling to keep up with expenses after losing their jobs.
Many of these people will likely be better off buying a plan on the state health insurance marketplaces, also called exchanges. Plans sold there must cover a comprehensive set of 10 "essential health benefits," and consumers can choose among four plan types with different levels of cost-sharing. Premium tax credits will be available to people with incomes between 100 and 400 percent of the federal poverty level ($11,490 to $45,960 for an individual in 2013), often making exchange coverage significantly more affordable than COBRA. [...]
It's crucial that workers understand their options before they make a decision about COBRA, experts say. If they enroll in COBRA and later decide they want to switch to an exchange plan, they generally won't be permitted to do so until the exchange's next annual open enrollment period unless they exhaust their COBRA coverage. (Exhausting COBRA would give them a special opportunity to enroll.)
During the first year of exchange operation, the annual enrollment period for coverage that will be available starting in January runs for six months, from Oct. 1 through the end of March 2014. In subsequent years, open enrollment for exchange plans will be shorter, running from Oct. 15 through Dec. 7.
Choosing the Obamacare option could save lots of money. The average cost of an individual, employer-provided health insurance plan, according to the most recent Kaiser Family Foundation
employer survey, is $490/month, but with an average employee
cost of just $83/month. Under the COBRA option, the laid-off employee would be responsible for the entire $490 premium. The subsidies under Obamacare would reduce premiums for many individuals
to less than $100/month.
There's a key thing for people to know, however, at the outset: If you're laid off and lose coverage, you'll be able to get your health insurance on the exchange at that time. If, however, you sign up for COBRA, but then change your mind and want to get insurance through the exchange, you might have to wait until the next open enrollment period. Despite the cost and the 18-month limit on COBRA coverage, there might be good reasons to choose that option, like if you or a family member needs to be able to keep seeing a specific provider who isn't included in any networks available on the exchange.