Health Insurance for Executives Between Roles, on Severance or Retiring Early

The short version

If you are healthy and your household income is comfortably above the subsidy line, a private, medically underwritten plan is usually the first thing to price when you leave an executive role. If you have a significant health condition, the Marketplace is the guaranteed option and COBRA can bridge the gap while you decide. The rest of this guide explains why, scenario by scenario.

Why executives rarely benefit from the Marketplace

Chief executives are among the best-paid workers in the country. The Bureau of Labor Statistics reported a mean annual wage of $269,630 for the roughly 204,350 chief executives it counted in May 2025, and that figure leaves out bonuses paid as equity. For 2027, the Marketplace credit stops entirely at 400 percent of the poverty level: $63,840 for a single person, $86,560 for a couple and $132,000 for a family of four.

Above those lines, here is what full-price Marketplace coverage looks like for an executive household:

1. You pay the whole premium, and Marketplace premiums are going up again for 2027.
2. You repay every dollar of any advance credit if a severance check, a deferred compensation payout or a stock sale lifts your income over the line after you enroll.
3. Networks are often narrow. Many Marketplace options are HMO or EPO plans tied to one region, which is awkward if you split time between two homes or travel for board work.
4. The out-of-pocket maximum reaches $12,000 for one person and $24,000 for a family in 2027.
5. Enrollment opens once a year, from November 1, 2026 to January 15, 2027, unless you have a qualifying event.

A private plan answers most of those points. It is priced on age, zip code and health, so a seven-figure liquidity event has no effect on your premium and there is no credit to pay back. If approved, it can begin on the first of any month, which lines up with a separation date rather than the calendar. Many private plans run on national PPO networks, so coverage follows you between a primary home in Texas and a second home elsewhere.

Private plans are not ACA Marketplace plans, and benefits and pre-existing condition rules vary by plan. They ask health questions and can decline an application. That is why the Marketplace stays on the table: with a serious diagnosis, it is the one option that must accept you.

Scenario one: between roles

An executive search can take months. When your employer plan ends, you have three paths:

• COBRA. Federal COBRA covers employers with 20 or more employees and lasts up to 18 months. You pay up to 102 percent of the full cost, including the part your company used to pay, which surprises many executives when the first bill arrives. You generally have at least 60 days to elect it, and once elected and paid it reaches back to the day your plan ended.
• A private plan. If you are healthy, this may cost less than COBRA and starts the first of the month after approval.
• The Marketplace. Losing job coverage opens a 60-day special enrollment period. Keep in mind that choosing COBRA and later dropping it on purpose does not open a new Marketplace window.

A common approach is to apply for a private plan first and keep COBRA as the safety net during its election window. Our COBRA alternatives guide lays out the trade-offs.

Scenario two: on severance

Severance changes the income picture more than people expect. Lump-sum and salary-continuation payments both count toward the income the Marketplace uses, as do accelerated vesting and any deferred compensation that pays out when you leave. A year that includes severance is almost never a subsidy year, even if the second half has no paycheck at all. Our 2027 subsidy cliff guide shows how the cutoff works.

If your separation agreement pays part of your COBRA premium for a set number of months, compare that subsidized cost with a private plan before you choose. The math sometimes favors COBRA for exactly those months, then a private plan afterward. If approved, a private plan can start on the first of whatever month the subsidy ends, so there is no reason to wait for open enrollment.

Scenario three: fractional and interim work

Many former CEOs and presidents now work as fractional executives, interim leaders or paid board members, often through their own LLC or S corporation. That makes you self-employed for health insurance purposes, with a few consequences:

• Income swings do not matter on a private plan. A strong quarter with three clients and a slow quarter with one cost the same.
• If you hire staff, an ICHRA works for a company of any size and a QSEHRA works for companies under 50 full-time employees.
• The premium may come off your taxes. Self-employed people can often claim the self-employed health insurance deduction, and S corporation owners with more than 2 percent of the shares follow a special payroll treatment to do it. General information, not tax advice — confirm with your CPA based on your specific entity structure.

Our LLC owner guide covers entity setup in more depth.

Scenario four: retiring before 65

Leaving at 58 or 62 means bridging to Medicare. Income is often lower in those years, so it is fair to ask whether the Marketplace credit comes back. For most retired executives it does not. Pension payments, IRA withdrawals, capital gains and even tax-exempt municipal bond interest all count toward the Marketplace income test, and most retired executives stay above it.

For a healthy couple in their late fifties or early sixties, a private plan is usually the first quote to run, with the Marketplace as the fallback if either spouse has a significant condition. If one of you turns 65 first, that person moves to Medicare and the other keeps an individual plan until their own birthday. Bronze plans are HSA-eligible since 2026, and the 2027 limits are $4,500 self-only and $9,000 family, plus a $1,000 catch-up from age 55, which can help fund health costs in retirement. See our HSA guide for the details.

How we work together

I am licensed in 31 states, and everything happens by phone or video, so we can schedule around interviews and board calls. Share your zip code, the ages of the people to be covered, current prescriptions and the date your group coverage ends. You will see private and Marketplace options next to COBRA, with the trade-offs explained in plain terms. You can get a quote or call (786) 218-2384.