Leaving a Colorado job to consult: health insurance when there's no short-term plan to bridge the gap

Sam Jaber, Licensed Health Insurance Advisor · Updated October 2026

NPN 20698748 · Licensed in Colorado, one of 31 states where Sam Jaber holds a license · Licensing details

Short answer: Colorado sells no short-term plans, so the bridge is federal COBRA, state continuation if you had six months on the plan, or a Connect for Health Colorado plan. After that it turns on income: with a tax credit the marketplace is usually most affordable, and without one a healthy consultant can price underwritten nationwide PPO plans.

• Leaving an employer with 20+ workers
• Small employer, six months or more on the plan
• Under six months on the plan
• My income qualifies for a credit
• Over the line and healthy
• Over the line with a condition
• Not sure yet

You have given notice, or you are about to, and the first consulting clients are lined up. Your employer's health plan ends with the job, and in Colorado the stopgap people use in many other states is missing.

Elsewhere, someone in your position often buys a short-term plan for a few months while the new business finds its feet. In Colorado, no insurer sells short-term plans. That leaves three ways to stay covered: federal COBRA, Colorado's own continuation law, or a plan on Connect for Health Colorado, the state's marketplace. Which of those you can actually use depends on the size of the employer you are leaving and how long you have been on its plan.

So start with two facts about your job: how many people does your employer have, and how long have you been on its health plan? The first three sections sort that out. After that, the question becomes your consulting income, and the last three sections cover it.

If you're leaving an employer with 20 or more workers

Employers of that size are generally subject to federal COBRA. It lets you keep the exact plan you have now, with the same doctors and the same progress toward this year's deductible, for up to 18 months after leaving a job. The cost is the catch: you pay the full premium, including the part your employer used to cover, plus up to 2% for administration. You have 60 days to decide.

The thing consultants miss is that this choice is hard to undo. If you take COBRA and later drop it by choice in the middle of the year, that does not open a window to move to a marketplace plan; you would wait for open enrollment. Running out of COBRA does open one. So decide at the start whether COBRA is the bridge for a few months or the plan for the whole year. Running the real COBRA math is worth ten minutes before you sign.

If it's a small employer and you've been on the plan six months or more

Federal COBRA does not reach employers with fewer than 20 workers, which is where Colorado's continuation law, C.R.S. § 10-16-108, comes in. If your employer's plan is insured, the law lets you stay on it after you go.

The condition that trips people up is eligibility. Your coverage has to have run without a break for six months or longer, ending at the point the job plan stops. If you clear that bar, the law gives you up to 18 months, or until you become eligible for other group coverage. You generally must tell the employer in writing that you are electing it, and make the first payment, within 30 days of your last day, so confirm the exact deadline. Expect to pay the whole premium yourself. The same caution applies as with COBRA: treat it as a planned bridge, because dropping it early by choice will not open a marketplace window.

If you joined the plan less than six months ago

Then Colorado continuation is probably not open to you, and with no short-term plans sold in the state, the bridge you would use elsewhere is not there either. The answer is to go straight to Connect for Health Colorado.

Losing job-based coverage opens a special enrollment period of 60 days, and you can generally start the application up to 60 days before the coverage ends. Use that head start. Picking a plan before your last day is how you avoid a month with nothing at all, which is the real risk in Colorado. Which plan to pick depends on the income question in the next three sections.

If your first-year consulting income qualifies for a tax credit

Inside the credit range, a Connect for Health Colorado plan is usually the most affordable way to be covered, and Colorado can add a second layer: Colorado Premium Assistance, extra state money layered over the federal credit for households below the state's income cutoff. Check the current figures on the marketplace when you apply.

The leaving year has a twist that catches new consultants. The credit is based on your household income for the whole calendar year, and that includes the salary you earned before you quit. A strong salary through the summer plus a few months of consulting fees can put this year above the line even if next year will be well under it. Estimate this year and next separately, and read how the subsidy cliff works before you commit to a number, because the credit is settled on your return and taking more help than you end up qualifying for has to be paid back in part or in full.

If consulting will lift you past the credit and your health is good

Above the credit line you pay the full Connect for Health Colorado price. Average full-price rates in Colorado rose about 21.2% for 2026, the same year funding for the state's reinsurance program was reduced. The marketplace also sells no PPO medical plans for 2026, only HMO and EPO plans, which matters if your clients are in Denver one month and Dallas the next. For many consultants above the line, that price for that network does not fit the budget.

The route a healthy consultant can price instead is outside the marketplace: private plans with medical underwriting, built on PPO networks that cover the whole country. The application includes health questions, and the answers decide whether you are accepted, refused, or accepted with an existing condition left out. Because it is pricing a screened, healthier group, a healthy applicant can sometimes pay less than the full marketplace price. The benefits are the plan's own and not the marketplace's, so read them, and see what medical underwriting means for how the review works.

If consulting will lift you past the credit and you're managing a condition

If you manage a condition or take an expensive prescription, protect your access to care first. COBRA or Colorado continuation keeps your current doctors and deductible through the switch. Connect for Health Colorado must enroll you at standard rates with the essential benefits included, while underwriting could reject you or exclude the condition, which makes it the wrong tool here.

Compare the full cost of continuing your job plan with a full-price marketplace plan that includes your doctors, keeping the midyear-drop rule in mind.

Find your starting point

Start with the row for your job, then the row for your income. Every row points to the same step.

The Colorado guide for self-employed buyers lays out the state's other programs, and engineers leaving small firms in Nebraska face a shorter clock and a rule that covers only involuntary job loss.

Common questions