I Lost My Job. What About my Insurance?
Losing a job can be traumatic, and uncertainty about insurance can add to an already stressful time. The good news is that there are many options available to you. Here are some resources and ideas to help you move forward with peace of mind about insurance in the wake of a job loss.
Health Insurance: Health insurance is a major concern in job loss situations. Going without health insurance is risky and unwise. Here are some options to consider:
- COBRA: The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives you the ability to continue your current health insurance for a limited amount of time. You will pay the full premium for the insurance plus an administrative fee. COBRA can often be more expensive, but it can be a useful short-term solution.
Remember, if you opt for COBRA insurance and want to switch to a healthcare marketplace plan, you will need to wait until your COBRA plan expires or for the open enrollment period in the healthcare marketplace.
- Marketplace Insurance Policies: Individual and Family insurance plans can be purchased through the Healthcare Marketplace at healthcare.gov after a job loss, regardless of the open enrollment period. These policies become effective on the first day of the month. There are several options for coverage and premiums. You may even qualify for subsidies on your premiums. You cannot be denied coverage on a marketplace plan based on pre-existing conditions.
- Non-Marketplace Insurance Policies: If you do not qualify for subsidies on your premiums, there may be other insurance plans available to you that are not listed in the Healthcare Marketplace. These can be found directly from an insurance company, or through an insurance agent or broker. Just make sure any policy you purchase is ACA-compliant, or you could end up being charged a fine.
- State High Risk Insurance Pool: If you have a pre-existing condition and live in a participating state, you may be eligible to receive benefits through your State High Risk Pool. Premiums may be higher than individual or family policies, but this might be a good short-term option if you don’t qualify for COBRA.
- Group Insurance for Organization Members: Check with organizations that you belong to to see if they offer any health insurance benefits or discounts. These are different than policies offered through employers. Instead, they are offered by people who share interests or affiliations or work within the same industry. Examples of these membership organizations include alumni associations, unions, professional associations—even membership-only stores like Costco have health insurance options.
- Short-Term Health Insurance: There are several pros and cons to purchasing short-term health insurance from a private insurance company. The insurance is often cheaper than a regular plan and useful to fill gaps in coverage if you miss the open enrollment period. Coverage can often be limited, however. For example, a short-term insurance plan may stipulate a limited number of doctor visits or provide limited prescription drug benefits (or none at all).
Short-term plans may be subject to deductibles and may deny coverage based on pre-existing conditions. Also, short-term insurers may drop your coverage if you develop serious health issues. Since these types of plans are “indemnity plans,” meaning they do not have a network of hospitals and doctors, they will only pay up to their prescribed amount, leaving you to cover the balance. Still, short-term plans may be useful to get you by in the wake of a job loss.
- Medical Discount Cards: While not insurance, these cards can offer helpful supplements to your current plan. There are many options available, and some options include such benefits as vision, dental, chiropractor, and prescription benefits.
When comparing health insurance plans, it is helpful to think through how the new insurance plan would cover certain health problems you may experience. You may need to balance the cost of the premium with the price of the deductible. If you take medications, make sure your new plan will cover them adequately. If you have a preferred doctor and medical facility, make sure they are in-network with your new insurance policy.
Of course, health insurance is just one type of coverage. Let’s take a look at other types of insurance that may be affected by your job loss:
- Life Insurance: Some employers offer life insurance as a perk of employment. This will often include free coverage up to a certain amount (perhaps equal to a year of your salary) and come with the option to buy more. Unfortunately, this insurance usually terminates once you leave the company.
When your employment ends, you should be given the option to convert your insurance into a permanent policy with cash value and set premiums. You’ll have to act quickly—this option is usually only good for 30 days.
Conversion policies are usually pricey, but if you have pre-existing conditions and can’t qualify for other options in the marketplace, this may be the best way to go.
- Disability Insurance: If you lost your job because you are unable to work due to an illness or injury, you have a few options. If your health problems were caused by an on-the-job accident or work conditions, you can apply to have your medical bills and lost wages covered through worker’s compensation insurance covered by your employer.
But what if your disability is due to something that happened off the job? In this case, talk to your employer. Most employers today offer short and long-term disability insurance, and you may be covered through these options.
You may also be eligible for social security disability insurance (SSDI). SSDI can be difficult to qualify for, and it can take a while to get approved. However, once you are deemed eligible, you can get back payment for missed months. Your family members may even be able to receive SSDI benefits on account of your injury, depending on their age and situation.
It’s natural to feel stress if you have recently become unemployed, but you don’t need to feel fearful or hopeless about your insurance coverage. There are many options available to allow you to continue your coverage. It may take some research and careful decision-making on your part, but you should be able to find what you need for a price you can afford.