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Facing unemployment is always daunting. Whether you were laid off or fired, there are new realities to face if your employment ends. Health insurance is one of those realities, as most Americans get employer-based group coverage. Therefore, a job loss may mean the loss of your health coverage.
However, you have options. Those health coverage options may vary depending on your situation, but here are some ways to get health insurance if you’ve lost your job.
Before leaving your job (and if possible), carefully read through your employer’s severance or exit package. Write down the contact information of your HR department in case you have questions after you leave.
If you lost job-provided health insurance, you might have an option to extend it for a limited time. The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers with 20 or more workers to give their employees the choice to continue health coverage for up to 18 months after their position has ended. COBRA coverage covers you, your spouse, and any other dependents who were on your health plan. Rules may vary by state, so check with your company’s HR department.
Also known as “continuation coverage,” COBRA insurance may be available if you (or a family member) have lost job-based health coverage due to:
You generally have at least 60 days to enroll in COBRA coverage. Coverage usually starts on the date you get notice of COBRA coverage or the date that your current coverage ends, whichever comes first. If you decide not to enroll and later change your mind, you can still sign up as long as you’re still in the 60-day time frame.
An important thing to keep in mind is that your costs are often much higher with COBRA coverage and you’ll be responsible for the total premium cost if you go this route. Typically, while you’re employed, your employer covers a portion of the monthly premium, and you pay the rest. If you get COBRA coverage, you’ll pay the total premium cost along with a 2% administrative fee.
One benefit of extending your health coverage through COBRA is how you can continue the exact same plan you currently have. There’s no interruption in your coverage while you find another job or other health coverage. However, because the costs can be high and COBRA coverage only lasts 18 months at most, COBRA is usually meant to fill a gap in coverage until you find a long-term health insurance option.
Another option is to sign up for an Affordable Care Act plan (ACA). While you typically can only get health insurance during Open Enrollment, losing job-based health insurance is a qualifying life event, meaning you’re eligible for a Special Enrollment Period to choose a new plan. This applies whether you were let go from your job or quit. You typically have 60 days to select an ACA plan during your Special Enrollment Period. If you are seeking an ACA plan, eHealth offers dozens of carriers and access to free health insurance quotes both online and via our customer support line.
If you aren’t immediately able to find another job that provides employer-based health insurance, an ACA plan may provide more comprehensive coverage in the meantime. It is important to note how this plan must cover all pre-existing conditions as well. All ACA plans are required by law to cover 10 essential health benefits including preventive services, maternity care, and hospitalization. States may also expand coverage beyond these minimum benefits, which may vary by location. Depending on your income, you may be eligible for a subsidy to help with costs.
You can often apply for new ACA coverage to start as early as the first day of the month after you lose your job and current health insurance, but each insurance company sets its own application cutoff times. Most insurance companies typically require an application to be submitted by the 15th of a month for the insurance policy to start the 1st of the following month.
To qualify for a Special Enrollment Period, keep in mind you must be leaving a job that provided employer-based coverage. If you lose a job that did not provide health coverage (such as a part-time or temp position), you usually won’t be eligible for a Special Enrollment Period. However, there are other qualifying life events that may make you eligible to enroll in coverage outside of Open Enrollment. States may also expand eligibility rules for special enrollment in certain circumstances.
If you have questions or are unsure whether you may qualify for a Special Enrollment Period, an eHealth licensed insurance agent can walk you through the different health care options by state.
Another way to get health insurance if you’ve lost your job is short-term insurance. These plans typically offer health coverage for up to 12 months at a time. Some states even allow you to renew coverage. One benefit is that you can enroll in a short-term plan any time; you don’t need to wait for Open Enrollment or qualify for a Special Enrollment Period.
Please note that short-term coverage is not the same as Marketplace coverage, and these plans are not required to cover minimum essential health benefits like maternity care or preventive services. In addition, unlike Marketplace plans, short-term plans do not cover pre-existing conditions and do not qualify for any government subsidies. These plans provide limited, temporary medical coverage and may be an option if you’d like some coverage until you’re able to get major medical insurance — especially if the alternative is not having coverage at all.
Catastrophic health plans are high-deductible plans that come with low monthly premiums. These plans are considered major medical insurance and are required to cover the same 10 essential health benefits as Marketplace plans. If you’ve lost your job and still need health insurance, catastrophic health insurance would cover you if anything major happened.
Because these plans have such a high deductible, they’re really meant to cover you in a worst-case scenario, like hospitalization for an injury or illness. For routine medical expenses like doctor appointments or preventive screenings, you’ll generally pay out of pocket. However, these plans will cover at least three primary care visits every year, even before you’ve met your deductible.
To be eligible, you must have a “hardship exception,” meaning it’s been determined you aren’t able to afford health insurance.
Medicaid offers free or subsidized health coverage for individuals and families with limited income. You can apply for the Medicaid program at any time. There are no open enrollment periods. Eligibility depends on income, assets, and household size, and criteria varies by state. If you get unemployment benefits, this will be calculated into your eligibility. Because many states have expanded Medicaid eligibility, you may still qualify depending on where you live. To apply or to get more information, contact your state’s Medicaid department.
You now have a better idea of your coverage choices going forward. As in any situation, coverage details vary by plan and state. To find the right information that is specific to your needs, talk to a specialized broker at eHealth.
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For information and guidelines specific to the coronavirus outbreak, visit cdc.gov
This article is for general information and should not be relied on as medical advice. Check with a medical professional for medical advice. Check with your particular insurance company to see what is covered by your particular insurance plan.