Leaving a corporate job can feel liberating—whether you’re retiring early, consulting independently, or finally launching the business you’ve dreamed about for years. But one major anxiety can hold people back – finding great health coverage at an affordable price.
For many who have been in corporate America for years, they’re not aware there are health insurance brokers like us who can help them. Not having a knowledgeable guide can heighten anxieties and keep you chained to your desk.
Here is a high-level overview of the options and some key pros and cons of each.
COBRA
One of the easiest transition options is COBRA, a federal law that allows eligible employees to temporarily continue their employer-sponsored health insurance after leaving a job.
Pros
- You keep the plan you’re used to and are able to continue seeing all your doctors.
- It may be the best option if you have chronic health issues, expensive medications, upcoming surgeries or have reached your deductible for the year.
Cons
- It can be very costly since your employer will no longer be contributing to the premiums.
- COBRA is available for up to 18 months, so you may still have to look for new health coverage if you’re not on Medicare at that point.
ACA Marketplace Plans
For many early retirees and new business owners, plans through the Affordable Care Act (ACA) marketplace are the most well-known alternative. For those who are used to having employer sponsored health insurance with low deductibles and PPO networks, the Marketplace plans are a dreaded alternative.
Pros
- There are no limitations on coverage or wait periods for pre-existing conditions.
- Depending on your anticipated annual household income, you may qualify for subsidies to help reduce the cost of coverage.
Cons
- Depending on your state, PPO plan options may be limited or unavailable, which could mean you need to get referrals to see specialists or even be required to change doctors if your current provider is out of network
- High premiums and deductibles can be a big deterrent for healthier people.
- If actual income exceeds the estimated income on your application, you may have to repay some or all of any subsidies earned.
Spousal or Partner Employer Sponsored Coverage
If your spouse or domestic partner has employer-sponsored coverage, joining their plan may be a simple solution. Most employer plans allow enrollment after a qualifying life event, including loss of other health coverage.
Pros
- This can be the easiest solution to your health coverage options.
- It may offer better coverage than other options available.
Cons
- It may be expensive, as many employers don’t contribute to the premiums of family members.
- There is a limited enrollment window, so a decision must be made quickly.
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Private Insurance and Health Sharing Options
There are a variety of private coverage options, such as indemnity plans, tri-term plans, small business group plans, medical cost sharing plans, and insurance through very part-time employment opportunities at research companies. These are generally geared toward healthier people and are worth exploring.
Pros
- Plans tend to be more affordable than Marketplace plans for those who don’t qualify for subsidies.
- They tend to offer nationwide PPO provider networks.
- Enrollment is available anytime throughout the year.
Cons
- There may have limitations on coverage in the first year for pre-existing conditions.
- There may be a learning curve on how to use the coverage, as some of these plans have different models than traditional major medical insurance.
Key Take-away
If you are considering early retirement or entrepreneurship, health insurance should be part of the financial plan—not an afterthought. The landscape of options can be very confusing. Don’t waste time or rely on AI to figure it out.
Work with an independent health insurance broker who is well versed in all the options and is willing to educate you on the plans that suit your needs and budget. Do you know someone who is considering leaving corporate America? Send them our way so we can get them set up with good health coverage and enable them to focus on their new phase of life.