Recently Laid Off Near Retirement Age? Here’s What to Do About Health Insurance

Losing a job in your early-to-mid 60s puts you in a tricky spot: you may be too young for Medicare, but old enough that buying an individual health plan feels expensive and confusing. Or you may already be 65+ with Part A but no Part B, unsure whether to enroll now or wait and hope for a new job with benefits. Either way, waiting too long can cost you — in coverage gaps or permanent penalties. Here’s a clear, step-by-step look at your real options.

What are my health insurance options if I’m laid off near retirement age?

Your options depend mainly on your age:

• Under 65: COBRA continuation coverage, or an ACA Marketplace plan (with a Special Enrollment Period triggered by the job loss).
• 65 or older, not yet enrolled in Part B: A Medicare Part B Special Enrollment Period, since you had coverage through an employer.
• 65 or older, already have Part A and B: You can shop for a Medicare Advantage plan, a Medigap policy, or a standalone Part D drug plan — you’re not limited to COBRA or the Marketplace.

Should I take COBRA or a Marketplace plan?

If you’re under 65 and your former employer offers COBRA, you’re generally entitled to continue your same group health plan for up to 18 months — but per the Department of Labor, you now pay the entire premium yourself, plus up to a 2% administrative fee, since your employer is no longer subsidizing it. That often makes COBRA the most expensive option on the table.

By comparison, losing job-based coverage qualifies you for a 60-day Special Enrollment Period to enroll in an ACA Marketplace plan, according to Healthcare.gov. Depending on your household income, you may qualify for premium tax credits that make a Marketplace plan considerably cheaper than COBRA for comparable coverage. New York residents can compare Marketplace plans through NY State of Health. Note: if you elect COBRA first and later decide to switch, you generally get another 60-day window to move to a Marketplace plan once COBRA ends or you stop paying for it — but that window does not apply if you simply cancel COBRA early by choice.

I’m 65+ and only have Medicare Part A. Should I sign up for Part B now?

If your employer coverage has ended, yes — don’t wait. Because you were covered by a group health plan through current employment, you likely qualify for the Part B Special Enrollment Period, per Medicare.gov. This gives you 8 months from the date your job or your job-based coverage ends — whichever happens first — to enroll in Part B without a late-enrollment penalty.

The most common mistake people make here is assuming COBRA “buys them more time.” It doesn’t. The 8-month SEP clock starts when your active employment or employer group coverage ends — not when COBRA runs out. If you elect COBRA and let the 8-month window pass without also enrolling in Part B, you can be hit with a permanent Part B late-enrollment penalty once you finally do sign up, and you may face a coverage gap while waiting for the next General Enrollment Period.

How do I actually enroll in Part B during this window?

You and your former employer complete two forms:

• CMS-40B (Application for Enrollment in Part B)
• CMS-L564 (Request for Employment Information) — you complete Section A; your former employer’s HR department completes Section B, confirming your coverage dates

Both forms can be submitted online through your Social Security online account, or by fax/mail to your local Social Security office (use the Field Office Locator to find yours). Keep copies of everything you send, and follow up by phone to confirm Social Security received and processed your forms.

What if I’m hoping to get called back to work or find a new job soon?

It’s reasonable to stay hopeful, but don’t let hope override the calendar. The 8-month Part B window and the 60-day Marketplace/COBRA windows run regardless of whether you expect new coverage soon. If a new job with benefits does come through, you can typically drop Marketplace coverage or delay further Medicare enrollment at that point — but if it doesn’t come through in time and you’ve let your enrollment window lapse, you could face months without coverage and a penalty that follows you for the rest of your time on Medicare.

What You Should Do Now

• Pin down your exact coverage-end date in writing from your former employer’s HR or benefits team — every deadline above is measured from this date.
• If you’re 65+, start your Part B Special Enrollment Period application now rather than waiting to see what happens with your job search.
• If you’re under 65, run the numbers on COBRA vs. a subsidized Marketplace plan before defaulting to COBRA out of convenience.
• Ask about the Medicare Savings Program if your income has dropped — it can help cover your Part B premium.
• Talk to a licensed advisor about whether Original Medicare plus a Medigap policy, or a Medicare Advantage plan, better fits your health needs and budget once you’re enrolled in Part B.

Frequently Asked Questions

Does COBRA extend my Medicare Part B enrollment deadline?

No. COBRA is not considered coverage based on current employment, so it does not extend the 8-month Part B Special Enrollment Period. That clock starts when your active job or employer group coverage ends, not when COBRA ends.

Can I enroll in a Medicare Advantage or Part D plan during this same window?

You get 8 months to enroll in Part A and/or Part B under this SEP, but only 2 months to enroll in a Medicare Advantage or standalone Part D plan once your Part B coverage begins — so don’t wait until the last minute.

What if my income is much lower now that I’ve lost my job?

Lower income can actually help you qualify for larger ACA premium tax credits on a Marketplace plan, or for New York’s Medicare Savings Program if you’re Medicare-eligible. It’s worth reporting your updated income right away rather than overpaying.