You did not see it coming.
Your employer has just issued you a notice that you no longer have a job, at least for the next several months, if not more than a year. You have been laid off, which means the elimination of your primary source of income. Although making up for the loss of your primary source of income dominates your thought process, you also have lost something important called health insurance coverage.
Welcome to the club.
Job layoffs have become a prominent part of the economy ever since the COVID-19 pandemic forced most businesses to shut down in March 2020. Almost 100,000 tech workers lost their jobs during massive layoffs that took place in 2022, and already in 2023, tech giants such as Amazon have announced plans to let employees go temporarily. Even once-shielded financial giants like Goldman Sachs and Morgan Stanley have succumbed to the new economic normal by laying off workers.
“When people get laid off, they don’t really trust their employer anymore,” said Brian Lacher, who is the vice president of employee benefits at Nielsen Benefits Group. “So when an employer then says, ‘Hey, here’s your health insurance option,’ they don’t really care. There’s a lot of frustration and sensitivity.”
Lacher went on to say employees that face budget-busting layoffs have several choices when it comes to continuing health insurance coverage.
According to federal law, employers have 14 days to share information with employees concerning the continuation of health insurance coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA). As a safety net intended to provide families with health insurance after losing a job, albeit even a temporary loss, COBRA is available to workers that have enrolled in an employer-sponsored medical plan. You must work for an employer that has a minimum of 20 employees to qualify for COBRA health insurance continuation coverage.
Employees typically have 60 days from the day of losing their jobs to enroll in a COBRA plan, but eligibility might be different for you depending on the status of the COVID-19 pandemic.
“People often don’t realize that COBRA coverage is the same plan they had, just with the cost redistributed,” Lacher said. “Step one is really reviewing existing COBRA options, costs, and plans, and from there you can decide if it’s right for you. An insurance broker is a neutral source.”
Learn more about COBRA coverage:
- Pros and Cons of COBRA Health Insurance
- COBRA vs. Marketplace Coverage: Your Options in the Event of Job Loss
If you have reached the age of 65 and your employer has laid you off, you can receive government-backed health insurance coverage through Medicare. The federal health insurance plan consists of different parts that provide different types of coverage, with the bulk of health insurance coverage coming from enrolling in Part A, which covers the costs associated with hospitalization.
If you wait more than eight months to apply for Medicare after losing your employer-sponsored health insurance coverage, you might have to pay a late fee for coverage eligibility. You can apply for Part A and B coverage online or by phone at 1-800-772-1213.
Medicaid represents a type of public sector health insurance program that is administered by state governments. The public health insurance plan covers free or low-cost coverage when you meet certain income guidelines. Eligibility depends on current monthly gross income, which should qualify most workers that have temporarily lost their jobs. Medicaid provides a wide variety of health insurance benefits, which include payments for managing chronic medical conditions such as asthma and diabetes. Laid-off workers also might receive financial assistance to pay for prescription medications and mental health services such as substance abuse care.
Health Insurance Marketplace
The Health Insurance Marketplace, which is the key component of the Affordable Care Act (ACA), offers subsidized health insurance coverage for low-income Americans. A vast majority of laid-off workers that do not meet the income standard to qualify for Medicare qualify for coverage through the Health Insurance Marketplace. Millions of Americans do not have to pay a premium, while those that do have to pay a premium spend an average of $87 per month for health insurance coverage.
Although the income standards are easier to meet than it is for enrolling in Medicaid, the enrollment period typically is a short window that runs between November 1 and January 15 of the following year. However, you might be able to enroll in the Health Insurance Marketplace if you meet one of the special events criteria, such as getting married or having a baby.
Insurance Broker Hub
Whether you need six months of health insurance coverage or five years to bridge the health insurance gap between jobs, Insurance Broker Hub can help.
Our free service gives you access to an independent network of national brokers who have the experience and expertise to design a plan around your needs and budget. Our network of brokers will tailor a complete solution for your health coverage needs.
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The Bottom Line: You Have Health Insurance Options if You are Laid Off
Losing your primary source of income, even for just a short period, can wreak havoc on your family finances. However, you cannot afford to allow a layoff to impact your life in a negative manner. You have several options to maintain health insurance coverage, which also includes enrolling in a short-term health insurance plan or gaining access to the healthcare benefits provided by a family member’s policy.
Be proactive when a temporary job layoff impacts your finances by enrolling today in an alternative health insurance plan.