Non-Employer-Sponsored Health Insurance Options

Fortunately, there are health insurance options available to most individuals who are unemployed or self-employed. Read on to learn about some of the common options for obtaining health insurance coverage that may be available to unemployed or self-employed individuals.

Medicare, Medicaid, and CHIP

There are several government programs that help provide health insurance coverage to qualifying individuals. Generally, Medicare is a federal health insurance program that provides coverage to people aged 65 and older. Medicaid provides health coverage to eligible low-income individuals, pregnant women, elderly adults and people with disabilities. Eligibility for Medicaid coverage may vary by state.

The Children's Health Insurance Program (CHIP) provides health coverage to eligible uninsured children whose parents or guardians earn too much to qualify for Medicaid but not enough to afford private health insurance. CHIP typically covers doctors’ visits, emergencies, vaccinations, and even dental care and glasses.

COBRA

The Consolidated Omnibus Budget Reconciliation Act (“COBRA”) was passed in 1985 to provide coverage to people who lost their employer-sponsored health insurance coverage and their eligible dependents. COBRA is a federal law that allows eligible individuals to maintain their employer-provided health insurance for a limited period. This coverage can last for up to 18 months but can be extended in some cases. Some states have also enacted “mini-COBRA” laws.

Qualifying events are events that cause an individual to lose their group health coverage. These may include:

Termination of employment
Reduction in the number of hours
Divorce or legal separation from a covered spouse
Death of a covered spouse
Loss of dependent status

It’s important to note that while COBRA allows eligible individuals to maintain health insurance coverage, it does not require employers to pay a portion of the premium. COBRA coverage will typically cost more than employer-sponsored health coverage, and depending on the cost, it could be worth considering other options.

Health Insurance Marketplace

The Affordable Care Act (“ACA”) established health insurance marketplaces where eligible individuals can enroll in individual health insurance plans that meet their needs and budget. Health insurance plans sold through the Health Insurance Marketplaces are required to cover the following categories of services:

Pregnancy, maternity and newborn care
Preventive services
Outpatient services
Emergency services
Hospitalization
Prescription drugs
Mental health and substance use disorder services
Laboratory services
Pediatric services, including oral and vision care
Rehabilitative and habilitative services and chronic disease management

Whether a specific service or prescription drug is covered, depends on the plan an individual enrolls in.

There are premium tax credits that many people qualify for that can help make plans purchased through a Health Insurance Marketplace more affordable. Eligibility for premium tax credit is based on income and other factors.

Purchasing Individual Health Insurance from Insurer

An individual may purchase individual health insurance coverage directly from an insurance company or through an insurance broker. This option offers more flexibility and selection of health insurance plans than employer-sponsored health insurance, but it can be more expensive. The premiums are not subsidized, but individuals can choose plans that meet their healthcare needs.

Joining a Family Member's Plan

If an individual has a family member who is enrolled in health insurance coverage, they may be able eligible for coverage as a dependent. Eligibility for dependent coverage may depend on state law. For eligible dependents, this can be one of the most affordable ways to get health insurance coverage.