When you get let go by your employer, it greatly impacts many areas of your life for a variety of reasons. If you were covered by your employer’s group insurance policy, it may leave you wondering about the status of your health insurance. Even if you are simply concerned that your employer’s next downsizing effort could affect you, you should know the details of your health policy in such an event.
You do have options, and it is helpful to know them so that you don’t run into a health emergency and are unsure whether you have coverage or not. Firstly, some employer insurance plans extend past the date you last worked, so find out precisely when your benefits end. Some severance packages include health insurance, so if you receive one, ask if your coverage will be continued through the time of the severance. Once your coverage ends, you can choose one of several ways to get health insurance.
The following are possible solutions to getting a good health insurance plan after your employer benefits end:
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), individuals with medical coverage through an employer may still receive the same benefits if they become unemployed. It is not a health insurance plan, but an extension of the benefits you received from your employer’s group plan.
The following criteria must be met in order for COBRA to work for you:
- You must be employed by a company with at least 20 full and part-time employees. Employment by a non-profit organization, private business, or government agency will also qualify.
- You must enroll in the COBRA plan at least one day before the event takes place that will put it into effect.
- You must have experienced loss of employment, cut hours resulting in lost medical coverage, or Medicare eligibility.
- If you were part of a group plan, you may also be able to receive COBRA benefits.
And of course, there are exceptions. If you meet these criteria, you will not be considered for COBRA:
- An employee who has been terminated for misconduct
- Part of a company that went out of business
COBRA Premiums and Payment
Though a majority of employers cover a significant amount of their employees’ premiums, therefore you will owe the full cost up front upon COBRA application. The premium can cost double or quadruple the amount it did when paid for by your employer.
You will also have to pay any premiums you did not pay for during the 60-day decision making period. Insurance companies might also charge you a fee for the upkeep of your COBRA benefits. There is a 45-day period to pay after you sign up for COBRA, followed by a 30-day time frame to provide the monthly premium costs.
For more information on COBRA, visit:
- U.S. Department of Labor: www.dol.gov/cobra
- Employee Benefits Services Administration: www.dol.gov/ebsa/COBRA.html
Individual Health Insurance
Depending on the part of the country you live in, plans vary, but you can likely find one in your price range. Get a quote from us now and compare the best health insurance companies in your area. The Obamacare health plans provide additional opportunities for low-to-moderate income Americans to shop on the individual market, as well. We can help you find plans both on and off the exchange in your state to best suit your budget and health needs. As COBRA is always more expensive than an individual plan, and it ends after a year or so, buying your own coverage and not relying on your former employer is likely your best option.
Public Health Programs
Programs like Medicaid are available to some individuals, and you may qualify to receive Medicaid benefits. Eligibility criteria changes from state to state. In order to find out if you qualify for Medicaid, your age, legal residency in the US, and your income and resources will all be evaluated. In most every state, six groups are considered mandatory for coverage under Medicaid.
- Low-income parents
- Low-income adults in certain states
- Children up to age 19-21 depending on the state
- Pregnant women
- SSI beneficiaries (Medicaid for Aged, Blind and Disabled)
- Medicare members with limited income and resources
As a result of the Affordable Care Act, the income limit is now 133% above poverty level, requiring that every state give Medicaid coverage to all uninsured adults, parents, and individuals without dependent children.
Also, for those with children, there is the CHIP program, which is part of Medicaid. Subsidized coverage through the Children’s Health Insurance Program (CHIP) is available to low-income families, requiring a small amount of cost sharing for those who qualify. Also, more uninsured children under age 19 who do not qualify for Medical Assistance can receive coverage under CHIP if their household income is up to 300% FPL.
- If you are married, research whether you can become a dependent on your spouse’s policy.
- You may want to get a better rate for health insurance in the 60 day COBRA enrollment period by calling your employer to receive further details. COBRA allows you the right to pay premiums retroactively for the two months after you have lost your benefits, if you have gotten sick or injured during that time.
- If you belong to an association or club, they might offer medical coverage to their members, so investigate that possibility.