Losing a job is a major life event. From how you’ll pay your bills to finding new employment, there’s a lot to think about. However, one of the most important things to consider is your health. If you lost your health insurance along with your job, the good news is that you do have other health insurance options.
In this blog, we’ll cover everything you need to know about getting health insurance between jobs so if medical needs come up, you’re covered.
In most cases, if you’ve lost a job, the health insurance that came with it will end on your last day of work. This is true whether you quit, were fired, or got laid off. However, your company might extend your health insurance as part of a severance or benefits package. Speak with someone in the human resources department to confirm the final day of coverage.
There is no longer a federal penalty for not having health insurance. However, some states impose a state fee on uninsured individuals. The guidelines vary by state, so visit your state’s health insurance website to learn the rules.
Penalties aren’t the only financial concern for uninsured adults, though. Going without health insurance between jobs could expose you to catastrophic medical expenses. Paying for healthcare out-of-pocket is generally much costlier than using health insurance.
In fact, uninsured adults are more likely to struggle to afford healthcare than insured adults — and to avoid seeking necessary treatment, because of the cost. Remember, even a short lapse in health insurance between jobs can put you at risk because you never know when unexpected medical events might happen.
If you’ve lost your health insurance as a result of losing your job, you can still get coverage. There are several options available to you, and the right one for you will depend on your medical and financial needs. Below, we’ll cover how to get health insurance after losing a job.
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), employees and their dependents have the right to maintain their employer-provided health benefits for a limited time after leaving their jobs. Here are a few things to know about COBRA:
COBRA is a good option for those currently undergoing medical treatment for a chronic or serious condition because it ensures uninterrupted care. Changing insurance plans typically means changing doctors, and patients who are in the middle of critical treatment often do not want to risk that change.
COBRA might also be right for individuals who are confident they will be newly employed elsewhere soon and will receive coverage at their new company. In that case, COBRA can make sense as temporary health insurance between jobs, eliminating the need to enroll in a new plan for a short time, only to enroll in yet another plan at your next job.
If your company is subject to COBRA requirements (i.e. has 20 or more employees), they legally must provide you notice of your COBRA rights when your job is terminated.
Should you decide to apply for COBRA, you must notify the human resources department within 60 days of losing your job. Your COBRA election notice will have instructions on how to enroll in continued coverage.
If you decide that COBRA does not make sense for you or your company doesn’t offer it, the Health Insurance Marketplace is the next place you’ll look for health insurance in between jobs. You can easily compare Affordable Care Act (ACA) plans here, as well as check your eligibility for financial assistance. As with COBRA, you have 60 days following losing or quitting your job to enroll in a plan through the Health Insurance Marketplace.
Shopping for plans on the marketplace can be right for individuals who cannot afford (or do not want to pay) the full cost of the premiums through COBRA, or who don’t have access to COBRA. It is also a good choice for low-income individuals who might qualify for financial assistance, including tax credits and subsidies. You can check your financial assistance eligibility on the marketplace, while you’re shopping for plans.
All you need to do to apply is go to the Health Insurance Marketplace website, then select your state. You will be redirected to your state’s marketplace, where you can provide information about yourself — including your general health status, age, and income — to see plans that are compatible with your needs, and learn if you qualify for financial assistance. In some cases, you might need to provide documents proving your income to receive financial assistance.
Short-term health insurance refers to plans that last less than a year. They aren’t meant to be a long-term solution but can make great temporary health insurance. These plans can prevent a coverage gap for individuals who do not apply for COBRA or an ACA plan within 60 days of losing their jobs, putting them outside of their Special Enrollment Period.
Here are some important things to know about applying for short-term health insurance between jobs:
Short-term health insurance plans are usually a last resort, but they can be valuable under the right circumstances.
Some individuals might choose short-term health insurance between jobs if they did not enroll in COBRA or an ACA plan within the 60-day window of leaving their jobs. These plans can provide you with critical coverage while you wait for Open Enrollment or another qualifying life event, and protect you from the high medical bills that often plague uninsured individuals. You can enroll in a short-term health insurance plan at any time of year, and cancel anytime without penalties.
You can purchase short-term health insurance plans through private health insurance companies. Not all insurers offer these plans. Again, since these plans are not ACA compliant, you won’t find them on the Health Insurance Marketplace. You’ll need to contact an insurance company directly.
If your income is low after losing your job, you may qualify for Medicaid, a government program that provides free or low-cost health insurance to eligible individuals and families. Unlike Marketplace plans, you can apply for Medicaid at any time of the year, and there are no enrollment deadlines.
Medicaid is a good option for individuals and families with limited income and resources. Eligibility is primarily based on income level, and in some states, other factors such as disability, pregnancy, or having dependent children may also affect eligibility. If you’re unemployed or expect to earn a low income while between jobs, you should check to see if you qualify for Medicaid.
Visit Medicaid.gov or your state’s Medicaid website to check your eligibility and apply. You can also apply through the Health Insurance Marketplace, which will direct you to Medicaid if you qualify. Be prepared to provide proof of income, residency, and other personal information during the application process.
If your spouse or domestic partner receives health insurance benefits through their employer, you might be eligible to enroll in their plan. Even if you left your job voluntarily, you still qualify for a Special Enrollment Period, so you might be able to join your partner’s health insurance after quitting a job. Even if you aren’t married, if you are in a domestic partnership, you might be eligible for the same benefits as a spouse.
Under the Affordable Care Act, most employers who provide health insurance are required to offer health insurance to their employees’ dependents. If you lose your job, simply speak to someone in the Human Resources department at your partner’s place of work within 60 days about enrolling in their plan.
HSAs and FSAs are tax-advantaged savings accounts, dedicated to medical expenses. HSAs are employee-owned, so if you contributed to an HSA and lost your job, those funds belong to you, and you can continue to use them to pay for medical costs. However, FSAs are employer-owned, meaning that if you lose your job, those funds typically go back to the company. There is one exception: if you elect COBRA, you can continue to use your FSA funds until your COBRA coverage ends.
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There are no federal fines for going without health insurance. However, some states do impose a fine on uninsured individuals. Additionally, going without insurance exposes you to financial risk in the event of major medical expenses. To ensure you can afford the care you need, it’s best to avoid gaps in coverage for any amount of time.
Even if you’ll have benefits soon through a new employer, medical emergencies can happen at any time. Consider purchasing short-term health insurance for the gap between jobs to make sure you’re covered during the transition.
In most cases, your insurance will end on the last day of your job. However, some companies offer extended health insurance as part of a severance package. Speak with your human resources department to confirm the final date of your coverage.
