When Venus Williams was asked by a reporter why she had come back to participate in (and win) her first singles tournament in 16 months, she smiled and said to her adoring fans, “I had to come back for the insurance because they informed me earlier this year I’m on COBRA. So I was like, I got to get my benefits on!” (1) She added, “Nobody wants to be on COBRA, right?” (2)
COBRA, short for the Consolidated Omnibus Budget Reconciliation Act of 1985, lets workers keep their employer health plan for up to 18 months after losing their job or hours are cut. But unlike when you’re employed, you have to pay the full premium yourself, which can make it one of the most expensive coverage options.
Venus’ response showed how even a multimillionaire athlete can get caught between jobs, plans and deadlines in the U.S. health insurance system. It’s a situation many Americans find themselves in when they’re between jobs. Here’s how employer-sponsored health insurance can leave people exposed, and what you can do to stay covered when your job ends.
Must Read
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don’t have to deal with tenants or fix freezers. Here’s how
- I’m 49 years old and have nothing saved for retirement — what should I do? Don’t panic. Here are 6 of the easiest ways you can catch up (and fast)
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and 3 simple steps to fix it ASAP
Why health insurance is complicated — even for celebrities
For most Americans, health coverage comes with full-time employment. In 2023, about 60 percent of people under 65 had employer coverage, and more than half of firms offered health benefits, with nearly all large employers doing so. (3)
That system is efficient for corporations and health insurance companies, as employer-sponsored health insurance (ESI) is exempt from federal income tax. But with the rise of contingent work, the gig economy and a much higher likelihood you won’t stay with one employer over the course of your career, it leaves many Americans feeling anxious about the stability of their benefits. (4,5)
The Affordable Care Act changed the landscape fifteen years ago by creating health insurance marketplaces, subsidies for lower-income earners, and protections for people with pre-existing conditions. It also created a special enrollment window so that if you lose job-based coverage, you generally have 60 days to enroll in a marketplace plan, so if you lose your job or miss open enrollment, you still have a chance to get covered.
The One Big Beautiful Bill, recently passed in Congress, is estimated to increase the population of uninsured Americans by about ten million between now and 2034 by reducing federal health spending by more than one trillion dollars over ten years. These changes could make coverage more volatile for adults who cycle in and out of work. (6)
Read more: Robert Kiyosaki warns of a ‘Greater Depression’ coming to the US — with millions of Americans going poor. But he says these 2 ‘easy-money’ assets will bring in ‘great wealth’. How to get in now
How to stay covered when your job ends
The safest move is to plan for transitions before they happen. If you are losing job-based coverage, you can apply for a marketplace plan up to 60 days before your old plan ends so coverage starts on the first day of the next month.
If you choose COBRA, compare its total cost to marketplace options, because subsidies can make ACA plans cheaper, and you can still switch to a marketplace plan when COBRA runs out or the employer stops contributing.
As always, you need to keep documentation of your prior coverage, since marketplaces require proof when you claim a special enrollment period. If your income drops, check Medicaid eligibility right away.
For people like Venus Williams and other contractors who rely on association plans (for example, an actor who gets their insurance through the Screen Actors Guild), confirm the exact rules for maintaining membership status during periods between jobs, layoffs or injury breaks, and be sure to ask how COBRA works for dependents.
Williams’ story shows that even those at the top of their field can’t escape the gaps in the U.S. system — a reminder for anyone to stay proactive about their own coverage.
What to read next
- How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement
- There’s still a 35% chance of a recession hitting the American economy this year — protect your retirement savings with these 5 essential money moves ASAP
- This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchase. Here’s how to buy the coveted asset in bulk
- Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Join 200,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
The Washington Post (1); Tennis.com (2); KFF (3, (6); BLS (4); World Economic Forum (5)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Related Posts
