Handling Health Insurance After Being Furloughed
According to the American Psychological Association, the cost of health insurance is cited by two-thirds of U.S. adults (66%) as a major stressor. Worth noting is the fact that this health insurance-related stress cuts across the board and affects Americans regardless of income level. As things stand with the coronavirus pandemic, more than 46 million people have already been furloughed and 11 million have since lost health care cover leading to an escalation in stress levels. So, how can you handle your health insurance when you’ve recently been laid off?
OPTION 1: Consolidated Omnibus Budget Reconciliation Act (COBRA)
COBRA is a federal program designed to help workers who have been laid off keep their group plan for a maximum of three years following the said furlough. If the company decides to permanently let you go, you will then be required to foot the full cost of the plan out of your own pocket.
To be eligible for COBRA you need to demonstrate that either your job was terminated for reasons other than “gross misconduct”, or you lost coverage through a divorce or death, or because your working hours were reduced. If you register for COBRA, your first premium will need to be paid within the first 45 days. Typically you can stay on the program from 18 months to 3 years.
OPTION 2: Affordable Care Act Exchanges
The Patient Protection and Affordable Care Act (ACA) is a federal statute that was signed into effect in 2010. For families and individuals without access to work-related health plans, ACA is probably the most popular option and to date thanks to this program there are now more Americans with health insurance than ever before.
If you fall under the “low and middle-income” employee bracket applying for the Affordable Care Act Exchanges may prove to be more favorable as it is less expensive. Additionally, if you’re in the said bracket you may qualify for free or reduced health care coverage. The biggest disadvantage with going this route, however, is the fact that the insurance you have will be forced to change. This means a new set of doctors and having to pay another deductible.
OPTION 3: Medicaid
Medicaid is the largest public health insurance program that’s operational in the country. Its target demographic are low-income individuals and families. While it is a federal program, Medicaid is administered differently state-by-state. To apply you must contact your state Medicaid agency. You must be a resident of the state you’re applying to receive benefits from. Medicaid covers children, pregnant women, people with disabilities, adults with a low income, and people who are aged 65 and above.
Keen to discuss health insurance options?
Reed Financial Group has 20 years of experience helping retirees, furloughed workers, and laid off employees navigate health insurance, retirement planning, and investments. We’re more than happy to help you find the right health insurance option for you.
Contact us for more information.