Adriana, 58, retires in 30 days. Not yet Medicare-eligible. Her spouse is 55 and self-employed. COBRA costs 102% of the full premium. The ACA marketplace costs $1,800/month. A short-term plan at $600/month excludes half the benefits. The right answer layers COBRA for the transition, then moves to the marketplace when COBRA expires, that expiration triggers a special enrollment period.
The marketplace is the primary individual coverage source for clients without employer plans and not yet Medicare-eligible. Plans must cover essential health benefits: hospitalization, prescriptions, maternity, mental health, preventive care, emergency services.
Enrollment happens during the annual open enrollment period (typically November 1 through January 15). The ACA limits when you can sign up to prevent adverse selection, without these windows, people would wait until they got sick to buy coverage. Outside open enrollment, a special enrollment period (SEP) is the narrow exception and requires a qualifying life event: losing employer coverage, marriage, birth, move, or COBRA expiration.
Plans are organized by metal tier reflecting actuarial value:
Common mistakes
- Confusing 18-month and 36-month COBRA periods. Job loss (termination, hours reduction) = 18 months. Divorce, death, dependent aging off, employee Medicare = 36 months. Trap: "36 months of COBRA" when the qualifying event is job loss.
- Believing Medicare-enrolled individuals can contribute to an HSA. Once enrolled in any part of Medicare, including Part A (which is often automatic at 65 if receiving Social Security), HSA contributions must stop. HDHP enrollment is necessary but not sufficient. Trap: "contribute $4,400" for a 66-year-old on Medicare Part A.
- Treating a general-purpose FSA as HSA-compatible. Only a limited-purpose FSA (dental and vision only) preserves HSA eligibility. The exam buries FSA enrollment as a detail in a long fact pattern.
Bottom line
- COBRA = 18 months for job loss, 36 months for divorce/death/dependent loss; costs up to 102%; disability extension reaches 29 months
- HSA triple tax: contributions deductible, growth tax-free, qualified medical withdrawals tax-free
- HSA disqualifiers: Medicare enrollment, general-purpose FSA, no HDHP, or claimed as a dependent; a limited-purpose FSA (dental/vision) is allowed
- 2026 HSA limits: $4,400 self / $8,750 family / $1,000 catch-up at 55+
Exam shortcut
Three reflexive checks for C.19 questions: (1) Job loss = 18-month COBRA, not 36. (2) Client turning 65 or enrolling in Medicare = HSA contributions stop. (3) Married couple making Medicare decisions = evaluate each spouse separately. "18 for the Job, 36 for the Family". COBRA duration rule. "HSA triple tax: In, Up, Out", money goes In deductible, grows Up tax-free, comes Out tax-free for medical.
The full lesson (about 3,416 words, 23 min read) adds 2 worked examples, all 7 common mistakes, a self-check, free in the app.
Learning objectives
- C.19
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