Q. After I lost my job, I went on COBRA, which lets me keep my former employer’s insurance for 18 months. It is good insurance, but more than I can afford. (I have to pay the entire premium.) My COBRA runs out in April.
- Can I buy insurance in the exchange that starts January 1 and stop paying for my COBRA insurance at that point?
- Would I be eligible for a tax credit to help cover the premium?
- Finally, what if I want to wait and see how things work out and wait until the summer to switch? (I know the open enrollment period ends March 31.)
A. Yes, you can buy insurance in the exchange and drop your COBRA insurance. Just don’t pay the COBRA premium for January when your new insurance will kick in. Whether you are eligible for a tax credit will depend on your household income.
But anyone with COBRA coverage does need to pay attention to the enrollment period. If a person on COBRA doesn’t register for a marketplace plan during this year’s open enrollment period (ending March 31) he or she would be stuck with his COBRA either until the next open enrollment period starts (in October, 2014) – or until his COBRA runs out.
The good news is that when a COBRA expires, this is a “triggering event” that allows a person to go to the exchange to buy a policy even though the enrollment period has ended.