You walk into work thinking it is just another normal day, but it’s not.
Today is the day you get laid off. It comes out of nowhere, and suddenly you are given the notice to pack up and leave by the end of the day.
Although getting laid off is not your fault, the abrupt exit from a company can be difficult to manage. You are left wondering how you will make ends meet and replicate the benefits you were offered at your job.
With 1.4 million Americans being laid off in 2022, workers must be prepared for the possibility of losing their health insurance benefits. Learning about your options ahead of time can help you make an informed decision and ensure you do not miss any important deadlines.
Health insurance benefits and the workplace
Health insurance benefits are one of the main benefits that employees value when looking for a job. In fact, 78% of employees stay with a job for benefits and consider health insurance when in the hiring process.
The creation of the Affordable Care Act in 2010 required employers to offer health insurance benefits if their company has 50 or more employees. Often these plans offer great benefits, including low out-of-pocket and deductible, copays, and nationwide networks.
However, when losing this coverage, it can be hard to find the same coverage you had before.
Here is how to find health insurance coverage when you recently lost your coverage
When does employer coverage end?
Employer coverage usually ends at the end of the month you get laid off. Finding a plan that starts on the first of the following month is best to make sure you do not have gaps in coverage.
What are the options?
Generally, there are two options when it comes to finding health insurance outside your employer.
Option 1: COBRA
COBRA is offered by employers for as long as 18 months and allows you to keep the same coverage you had.
However, keeping this coverage comes at a high cost. You have to pay 102% of the cost of what you were paying before from your employer. Usually, you and your employer share the cost of the health insurance premium, which is why it makes health insurance benefits highly valued by employees. Depending on the size of your company, employers cover up to 90% of the cost of the monthly premium, making your share $100 or less per month.
Now, you pay the full price and it can be as high as $2500 per month for a family. When your income is uncertain, that can be a large undertaking especially if you are not used to this monthly payment.
While COBRA can be tempting, it is important to carefully consider the benefits. Although it may be beneficial to keep if you have specialty medications or see a specialist, oftentimes it can end up costing you more money to keep it than it would be finding something else.
Option 2: Find your own coverage
If COBRA is too expensive or you are not interested in choosing it for your coverage, the next option is to use a broker to find your own insurance.
Brokers have the knowledge of what options are available to you and can help you go through all of them, for 100% free of charge.
There are two choices they can offer you. First, you can get coverage on the Marketplace. These plans offer preventative care for free, do not hold preexisting conditions against you, and you may qualify for a subsidy to lower the premium based on your income.
Usually, if you choose to go through the Marketplace instead of COBRA there are rules, including when you can enroll. If it is Open Enrollment, you can enroll at any time. However, if it is outside Open Enrollment you must wait until your COBRA ends or can enroll if your employer changes the benefits.
Second, you can get a private plan and enroll without a time limit. However, these plans usually provide catastrophic coverage and could have higher deductibles. They also look into your medical history and if you have a pre-existing condition you could be denied coverage.
What are the rules?
First of all, there are rules to getting coverage if you just lost your insurance. Outside of Open Enrollment (Nov 1- Jan 15) you must have lost your insurance within 60 days of applying (Marketplace plan) and have proof of this from your former insurance company. Applying for private plans can be done at any time.
If you miss the deadline you have to wait until Open Enrollment to find a plan, which could leave you with no coverage.
There are exceptions to this rule; however, depending on which plan you choose to replace your employer coverage.
How do I enroll?
The two ways to enroll are using a licensed broker or on your own. While enrolling on your own seems easy, you could be spending more than you should on health insurance. Working with a broker is free and they can save you 30-40% off your bill.
Contact me today for a free consultation.