While jobs numbers have recovered somewhat from earlier this year, we have unprecedented levels of unemployment with roughly one in ten Coloradans unable to find work. Unlike most developed-world countries, our health insurance is largely linked with employment. But what if you lose your job? While there may be disruption in your health insurance, your options are much better than those available a generation ago.

COBRA: If your former employer has 20 or more employees, most likely they offer COBRA continuation health insurance coverage regardless of whether it was your decision to leave or theirs. You also could qualify for coverage if your work hours have been reduced to the extent that you no longer qualify for health insurance benefits.

With COBRA you keep the health insurance you had in place with your former employer. There are no changes when it comes to your prescription plan, deductibles and copays, and the health care providers that were in network. The (big) downside is that you are completely responsible for all health insurance costs related to your family plus 2 percent for administration. These costs include the portion of health insurance that your former employer paid. If your family’s health insurance was covered by $500 a month deducted out of your paycheck and $1,100 by your employer, then you would be faced with paying the full $1,600 a month under COBRA plus 2 percent.

You generally have 60 days to elect COBRA coverage after you’re no longer eligible for health insurance at work. You can stay on COBRA for 18 months after separation in most cases.

Affordable Care Act coverage:  The Affordable Care Act gives us access to guaranteed issue health insurance with no pre-existing condition exclusions. In Colorado, health insurance plans can be found through Connect for Health Colorado. Its website is connectforhealthco.com. In most cases, you need to wait for an open enrollment period to start this coverage. But if you lose your health insurance related to work, you have a 60-day special enrollment period to apply for health insurance.

I’ll warn you that the insurance is not cheap. A family of four could easily pay $1,500 monthly depending on the ages of your family members, tobacco use, and whether you opt for a high deductible plan or not. It’s easy to get quotes on the Connect for Health Colorado website even without providing private information. All you need is basic demographic details, which you can supplement with your desired health care providers and prescriptions, in order to receive quotes.

The silver lining with an expensive Affordable Care Act plan is that it’s possible to receive a tax-free subsidy to help pay for health insurance. When you apply with Connect for Health, you can supply your projected income for the current year to see if you qualify for a subsidy. If that same family of four has an income of $100,000 in Boulder County for 2020, they could qualify for a $470 a month subsidy on their health insurance. With lower incomes come more benefits including higher subsidies, having children qualify for low-cost CHIP insurance, and potentially Medicaid.

In order to receive a tax-free subsidy, you must apply for health insurance with your state’s exchange, or with the federal government if your state doesn’t have one. More information is available at healthcare.gov. Just be aware that once you prepare your taxes for 2020, the IRS will look at whether you truly qualified for the income-based insurance subsidies based on your projections. You may get a tax refund if your income was lower than projected or owe taxes if your income exceeded your estimate.

David Gardner is a Certified Financial Planner practicing in Boulder County. The opinions expressed by the author are his own and are not intended to serve as specific financial, accounting, or tax advice.