Health Insurance After a Layoff or Furlough

If you’ve lost your job due a layoff or furlough, the blow of losing your income for the foreseeable future can be compounded by the loss of employer-provided health insurance coverage. Fortunately, a period of unemployment does not mean that you have to go without insurance, but you may have a limited time in which to exercise certain options. Understanding your choices can help you maintain your access to healthcare during a stressful time.

You’ve Been Laid Off—What Now?

The first thing to determine if your job has been eliminated or put on hiatus is the exact terms of coverage cessation. Whether employer-sponsored healthcare coverage continues after your last working day can depend on your exact circumstances and your company’s policies. Possibilities include:

• Immediate termination – Coverage ends on the same day the job ends. Resignations and contract terminations are common scenarios in which coverage ends immediately.
• End of the month – Many employers pay insurance premiums a month in advance, so your coverage may be terminated at the end of the calendar month in which your job ended (that is, if your job ended on February 12, coverage would continue through February 28).
• Continued coverage as part of a severance package – Some employers may offer continued health insurance coverage for a specified period after your job ends if the layoff includes a severance package.
• Continued coverage during a furlough – In situations where a furlough is only temporary, an employer may continue to offer coverage during that period, depending on their policies. You will need to continue to pay your share of the premium, even if you are not being paid a salary. If health insurance is terminated, you may be able to continue coverage through COBRA.

Once you understand how long your current plan will remain in force, then you can consider your potential options.

Where to Get Health Insurance If You’ve Been Laid Off or Furloughed

Depending on your medical needs and your resources, you have several different options for health insurance after a job loss.

COBRA (Consolidated Omnibus Budget Reconciliation Act) Coverage: This federal program allows you to keep your group insurance plan for a limited time after coverage ends with your employer, typically up to 18 months. However, opting for this means that you will be responsible for the entire premium (including any portion that was previously subsidized by your employer) plus an administrative fee. This can make it prohibitively expensive. If you want to opt into COBRA, you have 60 days from the date of a qualifying event such as job loss to do so.

Marketplace coverage: Individual health insurance plans through the Health Insurance Marketplace (Covered California) are available to those who do not have access to employer-provided health insurance coverage or government programs like Medicare. Anybody can sign up during the annual open enrollment period (November 1 through January 31 each year for Covered California), but loss of employer-sponsored coverage is a qualifying life event that triggers a Special Enrollment Period, so you can enroll within 60 days even if it is outside the normal enrollment period. Marketplace plans can be eligible for tax credits or subsidies based on income, potentially making them much more affordable than COBRA. All plans offered in California are required by law to conform to the requirements of the Affordable Care Act, so they will provide essential health coverage including preventative care, doctor visits, hospitalization, and prescriptions.

Maintaining continuous coverage is important even if you are otherwise healthy, as unexpected medical costs can be devastating if you experience an emergency or medical crisis when you are without coverage. Those with chronic conditions can miss out on regular care that is essential for managing their health challenges. California also has a personal health care mandate that makes those who do not have health insurance coverage subject to a penalty on their state tax return (though there are affordability and income exceptions).

Getting the Help You Need to Find the Right Plan

When you’re figuring out the way forward after a layoff or job furlough, the thought of looking for new health insurance can be overwhelming. Medical Insurance Today, a Covered California Enrollment Center, is here to help you find the right policy with plain- language explanations in English or Spanish that take the confusion out of comparing your options. In addition, we’ll help you qualify for all the financial assistance you’re entitled to so you can breathe a little easier. To get started, contact us here today.