I recently changed jobs. Job 1 ended in March, and Job 2 started immediately after the end of Job 1. The health insurance provided by Job 1 continued to the end of March. The health insurance coverage of Job 2 didn't begin until May. There was, then, no coverage for April. I have the option to pay for COBRA for that month, but COBRA is exceedingly expensive, and I'd prefer to avoid paying for it.

What effect will not paying COBRA for April and not signing up for an ACA marketplace plan (thereby going uncovered for one month) have?

5 Answers 5


What effect will not paying COBRA for April and not signing up for an ACA marketplace plan (thereby going uncovered for one month) have?

None. Your new employer coverage will begin May 1; and presumably are covered now. You would be responsible for any claims with dates of service in the month of April but that's it.

As to the question in your title, yes. There are plenty of situations where a person with a chronic illness would remain on employer coverage rather than securing individual coverage. Employer plan formularies and doctor networks can be much more broad than individually available plans, and individual plans are more subject to change from year to year; which could disrupt the care of a chronically ill person. In addition to that, it's rare but depending on the person's age, there are cases where COBRA costs are lower than comparable individually available plans when the employer plan is composite rated but individual plans are age rated. While the guarantee issue nature of individual health insurance has radically diminished the utility of the COBRA law there are still cases where a person would chose COBRA even in the face of increased costs.

Not that it's terribly relevant, but COBRA is just a law that says your employer needs to allow you to remain enrolled on its plan for up to 18 months; some states extend this requirement. COBRA is not in and of itself expensive; COBRA is just the gross premium your employer was paying plus a 2% surcharge. Your employer's coverage was expensive and being heavily subsidized.


You asked,

What effect will not paying COBRA for April and not signing up for an ACA marketplace plan (thereby going uncovered for one month) have?

Considering that you asked this question well into May, and we can assume you didn't have significant unexpected healthcare costs during the period where you were not covered, the answer is basically nothing. It had no effect on you. If you'd had medical costs during that period, the effect would have been that you would be responsible for those costs out of pocket (unless you qualified for a subsidized health coverage or other assistance of some type, some of which provide retroactive coverage, although as someone with a typical recent employment history probably wouldn't qualify - or, if you elected to sign up for COBRA after the expense was incurred, and you paid the retroactive premium).

In short, laws regarding gaps in coverage would exempt you from any potential negative impact for a gap this short, assuming it was your first such gap this calendar year. for detailed information you can read on the HHS and IRS websites:




COBRA may not make sense for you in your situation, however, one place it makes a big difference is for someone who has already hit their deductible before the end of the year, switching plans would most likely reset it. Note this problem exists for anyone changing jobs with employer coverage too.


Well, you'll be uncovered for a month. I would recommend at least getting a low-end plan just in case, because many health issues can be ruinous to your finances. (It looks like catastrophic plans still exist for people under 30.) It's still going to cost money, but nowhere near as much as COBRA, although there is paperwork.

But yes, the reasons that COBRA was created are no longer relevant.

  • 3
    They could still sign up for COBRA retroactively if a health issue did arise while they were uncovered.
    – Craig W
    May 23, 2019 at 16:51
  • @user3757614 Thanks for your answer. But April has now passed, and we've made no use of our insurance in April, and now it's May, and I have coverage again. Could this lack of coverage in the past (April) still somehow lead to a ruinous event?
    – Jeff Pratt
    May 23, 2019 at 16:56
  • Oh, this is after the fact? You're fine. May 23, 2019 at 18:03

I was unemployed for a little over 10 months, and getting health insurance on the exchange was almost 50% cheaper than what I would have paid for COBRA. The insurance was just about right - it didn't have the bells and whistles of my previous insurance, but it was enough to get me through until I got my current permanent insurance. Since my old insurance ended in early March and my new insurance began in mid June, I was considered covered within that time per the ACA.

Also, you are not assessed an IRS penalty if your lack of coverage was less than three months, so in your case, getting COBRA or ACA for the month of April wouldn't make sense.

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