Being let go by your employer is never easy. In addition to a break in income, you may lose access to employer-sponsored health insurance. In some ways, that can be even more challenging as you face steep healthcare costs without coverage.
Don’t worry: you have options. Whether you were laid off or terminated, you can still have health insurance. This is critical for keeping you healthy during this transition.
Read on to learn about your health insurance options.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) provided for exiting employees to retain health coverage up to 18 months after leaving their position. COBRA typically kicks in for job loss, divorce, or death of a covered spouse.
Once your position ends, you usually have 60 days to enroll in COBRA. Coverage begins when noticed or whenever your prior coverage ends — whichever comes first.
However, COBRA costs are not covered by your employer. This means that you often pay much more in your monthly premiums. COBRA is definitely not a long-term solution. It simply fills the gap until you find other coverage.
Under the Affordable Care Act, all U.S. citizens must carry health insurance. Certain insurers now provide coverage through the Health Insurance Marketplace, which allows people to select plans without employer sponsorship.
Normally, you’re restricted to Open Enrollment (November 1 to December 31) to select an ACA plan. However, losing your job qualifies you for a Special Enrollment Period. (Unfortunately, part-time or contract roles may not trigger your eligibility.)
Up to 60 days from your termination date, you may choose new coverage from the Marketplace. Note that this coverage likely won’t take effect right away. Get your application in as soon as possible.
Many ACA plans have limited coverage. The law requires them to insure preventative and maternity care, as well as hospitalization. Beyond that, you get what you pay for. Higher-tier plans have higher premiums and lower deductibles, although you may qualify for a tax subsidy to reduce your premium.
Despite these limitations, ACA plans still provide vital coverage. So, you’re not left with zero insurance for medical emergencies. You’ll also still be able to get regular checkups and preventative care until you find a new employer.
Catastrophic Health Coverage
In some cases, even “affordable” Marketplace plans can be cost-prohibitive. If you’ve been laid off and you qualify for a hardship exception, you may be able to enroll in a catastrophic coverage plan.
These plans have minimal premiums but high deductibles. They’re designed to ensure you’re not 100% on the hook for hospital or ambulance bills. You’ll also get three primary care visits every year. For everything else, though, such as specialist appointments or outpatient services, you must pay out-of-pocket.
Any health insurance is better than none, and catastrophic coverage gives you at least some protection for pressing medical issues.
Short-Term Health Insurance
Some insurers do provide short-term, a la carte healthcare coverage. Typically, you’ll enroll for 12-month periods. You don’t need to wait for Open Enrollment nor qualify for a Special Enrollment Period.
However, these plans are not covered by the ACA, and therefore, you may not receive key preventative services. Insurers may also deny coverage for pre-existing conditions, which is illegal for Marketplace plans.
Still, short-term coverage may be a good stopgap if you’d like to continue with a certain insurer and don’t anticipate needing many preventative services.
Low-income individuals and families may qualify for Medicaid, which connects you to affordable healthcare. There are no specific enrollment periods. Once your income falls below a certain threshold, you are welcome to apply.
After losing your job, you may be on unemployment benefits. Note that the state will include this amount when calculating your eligibility.
Medicaid offers basic preventative coverage and assistance with medical bills. If you’ve been laid off or terminated and your household income is significantly lower, consider Medicaid as a source of assistance.
While U.S. citizens are often dependent on their employers for healthcare coverage, there remain options for the unemployed, as well as contract workers. Act quickly to obtain health insurance. It makes a huge difference if you have an unexpected ER visit or a large medical expense.
Remember, many coverage options are short-term, so you can ensure you’re protected until you find new employer-sponsored insurance. It can be very risky to go months or even weeks without coverage. Choose the best interim plan for you to stay healthy!
Need guidance on enrolling in Medicaid, ACA plans, or COBRA?
At Coverage2Care, we’re happy to help you navigate this difficult situation.