If you’re losing your employer-sponsored health insurance, you might be tempted to just go without coverage. Paying the full cost of your insurance premiums through the Consolidated Omnibus Budget Reconciliation Act (COBRA) will probably cost more than what you’re been paying.
However, it’s important to consider the implications of having no medical insurance. If you get sick or have an accident, you’ll have to pay the full cost of the treatment. For example, fixing a simple sprained wrist can cost between $808 and $1,678 in Dane County.1
In addition, having no medical insurance will likely result in a fine at tax time. For a single person, that fee in 2016 will be 2.5 percent of your household income or $695, whichever is higher.
It makes sense to have health insurance – and COBRA can be a good choice.
Employers with 20 or more employees are usually required to offer COBRA.2 COBRA provides the right to continue to have medical insurance coverage at group rates after termination or reduction of work hours. The affected employee can continue with the group plan with the same coverage as previously.
Pros & Cons of COBRA
Whether or not COBRA is the best choice to avoid having no medical insurance depends on your unique situation.