As we all navigate through the constant unknowns during this global pandemic, many Americans are facing several difficult challenges and decisions to make. Being laid off, or knowing someone who has been laid off, is becoming increasingly prevalent and those without a job are now without health insurance. About half of Americans receive their health insurance through their employer, and those who are currently unemployed are scrambling to figure out how to obtain coverage.
Here are a few solutions that may help you better understand your options:
If you have lost your job and received some sort of severance, be sure to review your exit package carefully to see if your health coverage was included and extended. If health coverage was not included in your exit package, contact your HR department who should be able to help you navigate through all benefits and options available. However, for many who did not receive a severance package, there are typically other options to research which can provide further coverage.
COBRA, short for Consolidated Omnibus Budget Reconciliation Act, is simply an extension of your current health coverage benefits that cover you through a certain period, in this case, 18 months. Typically, employers with 20 or more employees are required to offer COBRA coverage, but if you are unsure, it is best to reach out to your HR department. Through COBRA coverage, nothing changes with your current benefits. However, the extended coverage can be quite expensive, given that you are now paying for the entire premium plus a 2% administrative fee. Typically, you have 60 days to enroll in COBRA from when you receive your COBRA notification, so it is critical to act quickly to obtain coverage.
If COBRA is too expensive, going to the Health Insurance Marketplace may be an option that provides coverage for less. Like COBRA, you have 60 days from the time you lost your job to enroll in a health insurance plan through the Marketplace, and depending on your income, you may qualify for a subsidy. The subsidy would reduce your monthly premiums. Since open enrollment is not available until November, it is essential to note that losing one’s job qualifies as a “life event,” which starts a special enrollment period. It’s important to note that if you elect for COBRA coverage first, you cannot switch over to a Marketplace plan without another qualifying event or until open enrollment or until your COBRA benefits end. So, if you suddenly decide to cancel COBRA, you may have to wait until open enrollment to enroll in a Marketplace plan, which could mean you are without coverage in the interim.
As you process the shock of losing your job and try to understand your healthcare options, don’t sit idly. People without coverage tend to suffer significantly from medical debt and face many barriers to obtaining adequate medical care. It is imperative to evaluate all of your options to determine which one works best for your specific circumstance.
The information and material presented in this commentary are for general information only; they do not specifically address individual investment objectives, financial situations, or the particular needs of any specific person who may receive this commentary. Investing in any security or investment strategies discussed herein may not be suitable for you, and you may want to consult a financial advisor. Nothing in this material constitutes individual investment, legal or tax advice.