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 · Last reviewed October 1, 2026

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

Short answer: You can't buy short-term health plans in Colorado. Your temporary coverage choices are federal COBRA, Colorado continuation if you've had at least six months on the plan, or coverage through Connect for Health Colorado. From there, income makes the difference. Marketplace coverage is usually the most affordable with a tax credit, while healthy consultants who don't qualify for one can compare medically underwritten nationwide PPO coverage.

• 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

Maybe you've already submitted your resignation, or you're getting ready to do it, and your first consulting customers are waiting. Once your employment ends, so does your employer health coverage. And in Colorado, one temporary insurance option commonly available in other states isn't on the table.

In other states, people leaving employment often use short-term insurance for several months while establishing a business. Colorado has no insurers offering those policies. Instead, you have 3 possible coverage routes: federal COBRA, Colorado's continuation program, or the state's marketplace, Connect for Health Colorado. Which route is available depends on your previous employer's size and the length of time you participated in its health plan.

Before looking at insurance prices, let's establish two things about your current employment: what's your employer's workforce size, and how many months have you carried coverage through that job? We'll use the first three sections to determine your continuation options. Then we'll turn to your consulting earnings, which the final three sections explain.

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

Companies in this category generally fall under federal COBRA requirements. That means you can continue the health plan you're currently using, keep your doctors, and preserve what you've already paid toward this year's deductible for as long as 18 months after leaving. The tradeoff is the premium. You'll cover your share and your employer's former share, plus an administrative fee of up to 2%. You get 60 days to make the election.

One detail consultants often overlook is that enrolling in COBRA can limit when you're able to switch later. If you voluntarily cancel COBRA halfway through the year, that decision doesn't create a special marketplace enrollment period. You'd need to wait for open enrollment. But when your COBRA coverage runs out, you do get an enrollment opportunity. So think ahead about whether you're using COBRA temporarily or keeping it throughout the year. Before enrolling, spend ten minutes reviewing Running the real COBRA math.

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

Federal COBRA generally doesn't apply when an employer has fewer than 20 employees. That's why Colorado has its own continuation protection under C.R.S. § 10-16-108. If the employer offers an insured health plan, this law can allow you to continue that coverage after your employment ends.

The important hurdle is how long you've been covered. You need at least six consecutive months of coverage, without interruption, immediately before your employer plan ends. Meeting that requirement can give you up to 18 months of continuation, unless you become eligible for another group health plan sooner. Generally, you must notify your employer in writing and submit your first premium payment within 30 days of your final workday, so verify the specific deadline. You'll be paying the entire premium yourself. And just like federal COBRA, think carefully before treating this as temporary coverage, since voluntarily ending it won't create a marketplace enrollment period.

If you joined the plan less than six months ago

In that case, you probably won't qualify for continuation under Colorado law. And because short-term insurance isn't sold in Colorado, you can't rely on the temporary coverage people sometimes use in other states. Your next move is to look directly at Connect for Health Colorado.

When you lose employer-sponsored insurance, you receive a 60-day special enrollment period. You can also generally begin applying as early as 60 days before your existing coverage terminates. I recommend using that advance time. Selecting your replacement plan before leaving work helps prevent an uninsured month, which is particularly important in Colorado. The right plan depends on your expected income, which we'll cover in the following three sections.

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

When your income qualifies for a premium tax credit, Connect for Health Colorado will usually offer your most affordable coverage. There's also another potential benefit specific to Colorado: Colorado Premium Assistance. This state funding can supplement your federal credit when your household income falls below the state's eligibility threshold. Be sure to review the marketplace's current income figures when you submit your application.

Here's something new consultants need to watch closely during the year they resign. Your premium credit is calculated using total household income for the calendar year, not just what you earn after starting your consulting business. That means the salary you collected before leaving still counts. If you earned a substantial salary through summer and then brought in consulting revenue afterward, your total could exceed the limit this year even though next year's income will be below it. Calculate each year separately. Also review the subsidy cliff before choosing an estimate, since your tax return reconciles the credit and you may have to repay some or all of any excess assistance.

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

Once your income exceeds the tax credit limit, you're responsible for the entire Connect for Health Colorado premium. For 2026, average unsubsidized rates increased approximately 21.2%, while funding for Colorado's reinsurance program was also reduced. Another consideration is the network: Colorado's 2026 marketplace offers HMO and EPO medical coverage, but no PPO medical plans. If your consulting assignments take you from Denver to Dallas, that difference matters. For many higher-income consultants, paying the full premium for those networks simply doesn't work financially.

Healthy consultants can also explore coverage outside the marketplace. These private plans use medical underwriting and may provide nationwide PPO networks. You'll answer questions about your health during the application, and the insurer may approve you, decline you, or approve coverage while excluding an existing medical condition. Since these plans evaluate applicants' health and cover a healthier pool, some healthy people can qualify for premiums below the full marketplace rate. Keep in mind that their benefits differ from marketplace coverage, so examine the policy carefully. Our explanation of what medical underwriting means walks through that evaluation.

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

If you're dealing with an ongoing medical condition or need an expensive medication, start by making sure your treatment won't be interrupted. Federal COBRA or Colorado continuation can preserve your existing doctors and deductible progress, so include those choices when comparing plans. But don't automatically rule out every private option either. Eligibility depends on your circumstances, and Sam Jaber can review what may work for your particular situation.

Put the total price of keeping your employer coverage alongside the other available choices. Include your doctors in that comparison, and remember the rules about voluntarily dropping continuation coverage during the year.

Find your starting point

First, find the row that describes your employment situation. Then look for the row that matches your income. They all bring you to the same next step.

For more information on available state programs, read the Colorado guide for self-employed buyers. Engineers leaving small firms in Nebraska have a tighter deadline and a continuation rule limited to involuntary employment loss.

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