What If I Leave My Job, Lose Job-Based Coverage, and Become Self-Employed?A Guide to ACA Health Plans

Losing your job or transitioning to self-employment can be a significant life change, especially when it comes to your health insurance. If you leave a job where you had employer-sponsored health coverage, you’ll need to find a new way to protect yourself and your family. Fortunately, the Affordable Care Act (ACA) offers a variety of health insurance options to keep you covered when you become self-employed.

In this guide, we’ll explain your health insurance options if you lose job-based coverage and become self-employed, and how ACA health plans can help you maintain affordable, comprehensive coverage.

What Happens to My Health Insurance When I Leave My Job?

When you leave your job, you typically lose your employer-sponsored health insurance. However, the good news is that this qualifies as a Special Enrollment Period (SEP) under the ACA, meaning you don’t have to wait for the annual Open Enrollment Period to apply for health insurance.

You’ll have a 60-day window from the time you lose your job-based coverage to apply for a new health insurance plan through the ACA Marketplace or another provider.

ACA Health Plan Options for the Self-Employed

Once you become self-employed, you’ll need to secure your own health insurance. The ACA Marketplace offers several coverage options for individuals who are no longer receiving job-based coverage. These plans provide essential health benefits and protections to ensure you have access to the care you need.

Here are the primary ACA health plan tiers available through the federal or state Marketplace:

1. Bronze Plans: Lowest monthly premiums, highest out-of-pocket costs. Best for those who are healthy and want to keep premiums low.

2. Silver Plans: Moderate premiums and out-of-pocket costs. These are the only plans that qualify for cost-sharing reductions if you’re eligible.

3. Gold Plans: Higher premiums with lower out-of-pocket expenses. Ideal for those who expect to need more medical care.

4. Platinum Plans: Highest premiums but lowest out-of-pocket costs. Offers the most comprehensive coverage, great for those with frequent healthcare needs.

Qualifying for Premium Tax Credits and Cost-Sharing Reductions

When you become self-employed, your income may fluctuate, and the ACA allows for financial assistance based on your household income. If your income falls between 100% and 400% of the Federal Poverty Level (FPL), you may qualify for premium tax credits that can significantly lower your monthly premiums.

For those with incomes between 100% and 250% of the FPL, you may also qualify for cost-sharing reductions, which lower your out-of-pocket costs when you enroll in a Silver plan.

Special Enrollment Period (SEP) for Losing Job-Based Coverage

Losing your job and job-based health insurance is considered a qualifying life event, which makes you eligible for a Special Enrollment Period. This allows you to apply for ACA coverage outside of the regular Open Enrollment Period, giving you a 60-day window to find and enroll in a health plan.

To enroll in an ACA plan during this SEP, you can:

- Apply online at Healthcare.gov or your state’s health insurance Marketplace

- Work with a licensed insurance broker, like Aura Insure, who can guide you through the process

- Call the federal Marketplace hotline or submit a paper application by mail

If you miss the 60-day window, you’ll need to wait for the next Open Enrollment Period to apply for coverage unless you qualify for another SEP due to a new life event.

Other Coverage Options: COBRA and Short-Term Health Insurance

If you lose job-based coverage, you may also have the option of continuing your previous employer’s health insurance through COBRA. However, COBRA can be costly, as you’re responsible for paying the full premium (including the portion your employer used to cover). This option may be more expensive than purchasing an ACA plan.

Short-term health insurance is another option, but it doesn’t provide the same comprehensive benefits as ACA health plans and is not recommended for long-term coverage. It also does not cover pre-existing conditions or qualify for subsidies like ACA plans do.

Finding the Best Health Insurance Plan for Self-Employed Individuals

Choosing the best health insurance plan as a self-employed individual depends on your healthcare needs and budget. Here’s what to consider when selecting your new ACA plan:

1. Assess Your Healthcare Needs: Are you generally healthy, or do you anticipate needing frequent care, prescriptions, or specialist visits? If you don’t need much care, a Bronze plan with lower premiums might suit you. However, if you expect to visit doctors often or need regular treatments, a Gold or Platinum plan may offer more value despite higher premiums.

2. Consider Your Income: Your new self-employment income will affect whether you qualify for premium tax credits or cost-sharing reductions. If your income is within the ACA’s income limits, you may be eligible for subsidies that can reduce your premium costs.

3. Explore All Plan Options: Be sure to compare different ACA plans to find one that fits your needs. Consider both the premium and out-of-pocket costs (deductibles, copayments, etc.) to determine which plan offers the best value.

4. Work with a Licensed Insurance Broker: Working with an insurance broker, like Aura Insure, can help you navigate the complexities of finding the right plan. Brokers can help you explore your options, apply for subsidies, and ensure you’re getting the most out of your health insurance.

Secure Your Health Insurance Coverage with Aura Insure

At Aura Insure, we specialize in helping individuals like you transition from job-based coverage to ACA health plans. Whether you’re newly self-employed or simply looking for better health insurance options, we’re here to guide you through every step of the process.

Contact Aura Insure today to explore your health insurance options and find the perfect ACA plan for your needs!