I just gave notice at work, and am planning to start my own business. I had planned to continue my health insurance through COBRA, but it's really expensive. Can I get insurance through ObamaCare through the health insurance exchange? I checked the rates, and they're much more affordable. But it isn't the open enrollment period. Can I enroll when I need insurance, or do I have to use COBRA until open enrollment comes around?
First of all, congratulations on starting your own business! And you've already learned a tough lesson of transitioning from employee to owner: Benefits can get pricey. Although most employees have the right to continue their group health insurance coverage when they lose or leave a job, that coverage often comes at a steep cost. Many employers that provide health insurance pick up at least part of the expense. But if you choose to continue your coverage through COBRA (the federal law that provides this right), you have to pay the entire premium. Your employer can even charge you an extra 2% of the cost for administrative expenses.
Policies available on the health care exchanges (through ObamaCare) are often more affordable, as you have found. Of course, that doesn't mean they are comparable. Check the benefits, deductibles, copays, and so on carefully before making a final decision.
If you choose to purchase through the exchange, the good news is that you can do so at any time of year, if you are losing employer coverage. As you point out, ObamaCare has an open enrollment period. For 2014, that period closed in March 31, 2014 (or so; the government allowed people to finish their applications beyond the deadline, as long as they were in the system by the original final date). For coverage beginning in 2015, the proposed open enrollment period is November 15, 2014 through February 15, 2015.
So what happens if you lose job-based coverage over the summer? The law includes a special enrollment period that lasts for 60 days after you lose employer coverage. (The same 60-day enrollment period applies to COBRA.) As long as you complete the application process for exchange coverage during this window, you'll be fine. Even if you initially choose COBRA, but change your mind and move to the exchange during the initial 60 days, you can use the special enrollment period. However, if you miss the special enrollment period, you'll have to wait for the next open enrollment period to roll around unless you experience another event that qualifies you for a special enrollment period (like having a child).
What if you choose COBRA? COBRA coverage is only temporary. Once your COBRA coverage ends, you get another special enrollment period of 60 days in which to purchase insurance on the exchange.