Unemployment may give you more money, but it can't give you this
Unemployment benefits are looking a lot better than usual these days, thanks to the extra $600 per week the CARES Act provides to all recipients during the COVID-19 pandemic. Some people are actually earning more money from unemployment benefits than they did working their normal jobs, but even for these individuals, unemployment has its downsides.
Being laid off or furloughed could cost you your employer-subsidized health insurance, and without the appropriate coverage, a single large medical expense could plunge you deep into debt. You need your own health insurance coverage to hold you over until things go back to normal. Here's what you need to know.
How job loss affects your health insurance
You probably already know that your employer will no longer subsidize the cost of your health insurance once you're laid off or fired. But that's not quite the same as taking away your insurance. Employers with 20 or more full-time employees are typically mandated to offer COBRA coverage, and many states have similar laws for employers with fewer than 20 full-time employees. COBRA coverage enables you to remain on your former employer's health insurance plan for at least 18 months and possibly up to 36 months after losing your job. The catch is, you now have to pay the full cost on your own.
It's an option worth looking into, but COBRA coverage is often far more expensive than what people are used to paying for health insurance, and some people simply may not be able to afford it. If this is the case for you, explore some of the other solutions listed below.
Furloughed employees do not lose their health insurance coverage because they're technically still employed by their company, even if they're not actively working at the time. But if you typically have money withheld from your paychecks to cover your portion of your health insurance premiums, you might have to pay this amount out of pocket for the time being, since you're not earning paychecks right now that your employer can take the money from. This additional expense could be tough for families who are struggling to cover their normal bills.
If you have any questions about how being furloughed or laid off affects your health insurance benefits, speak to your company's HR department for more information. If you'd like to keep your existing health insurance, you should also ask about what you must do to stay on the policy.
Other ways to get health insurance
Health insurance is always important, and this is especially true right now while we're in the midst of a global pandemic. Even a single hospital visit could cost hundreds or even thousands of dollars, and if you don't have that kind of savings, you'll end up with debt that could haunt you for years afterward. If COBRA coverage isn't a good fit for you, here are some other ways you can get health insurance until you find a new job or return to your existing one.
Purchase your own health insurance through the marketplace
Losing your job qualifies you for a special enrollment period, so you can purchase a new policy through the Health Insurance Marketplace. You have 60 days following your job loss to purchase a new policy, and if you miss this window, you'll have to wait for the next open enrollment period at the end of the year.
You must fill out an application on the marketplace website, which will verify your eligibility for a special enrollment period and show you the available policies you can choose from. Compare their premiums, deductibles, copays, and coverage to figure out which offers the best value for you.
Go on a spouse's health insurance plan
If your spouse is still employed, you could see if you can get added to their policy instead. This could prove more affordable than either of the options above if the employer subsidizes a large portion of the insurance costs. Have your spouse speak to their company's HR department to learn more about their health coverage and how they can add you to the policy.
Adults 65 and older may opt to switch over to Medicare if they aren't already on it. Those who are also claiming Social Security shouldn't have to worry about any premium costs for Original Medicare because the government takes these from your Social Security benefits. Otherwise, you must pay for them just like you would any other health insurance.
You should also bear in mind that Medicare doesn't cover everything, so you may want to look into a Medicare Advantage or a Medicare supplement policy to fill in some of the gaps Medicare doesn't cover.
Medicaid is low-cost health insurance that's available to low-income families. You can see if you qualify by applying on the Health Insurance Marketplace website or by contacting your state Medicaid agency. Medicaid benefits vary by state, so you'll have to do some research to figure out what yours will cover.
It doesn't hurt to explore a few different health insurance options before settling on one. But don't put off researching health insurance any longer. You never know when a medical emergency could arise, so you need to ensure you're protected.