How to get health insurance – a guide for the newly unemployed
Editor’s Note: When you lose a job, you lose more than just a paycheck. You may also lose any employer-sponsored health care coverage. Fortunately, you have lots of options for keeping or replacing your current health insurance policy.
Getting laid off will make you feel bad enough, but realizing that you now have to figure out what to do about your health insurance can fill you with absolute dread. While we can’t get you a new job, we can help you sort out the options you have when you lose employer-paid health insurance.
How to get health insurance
Believe it or not, there are many ways to get health insurance as an unemployed person. While you lose employer-sponsored health insurance coverage, you can access insurance through COBRA, the Health Insurance Marketplace, Medicaid, and even a few other options. But, where and how to get health insurance depends on a number of factors, which we’ll cover below.
If your employer has 20 or more workers, you may be able to keep the health insurance coverage you got from your employer coverage health plan for up to 18 months thanks to COBRA. The catch? You may have to pay for it — and it’s expensive. You may be responsible for paying the costs typically paid by both the employee and the employer, plus an additional 2% for administrative costs.
Fortunately, you generally get at least 60 days to decide whether you want to continue the unemployment insurance and then another 45 days to pay your first premium.
Since you have 60 days to decide, you don’t have to say yes or no to COBRA right away. You can ask HR for a list of all the health insurance plans your company offers. If your former employer offers a lower-cost policy, you may be able to switch into it if you end up unemployed for more than 60 days.
Also ask if your employer-provided coverage will go through the end of the month. If it does, get your prescriptions refilled and doctor visits in before you lose coverage.
Health Insurance Marketplace plans
During the 60-day COBRA window, check out your other coverage options, starting with the Health Insurance Marketplace, a federally sponsored affordable health insurance program.
Filling out the online Marketplace forms can help you understand possible costs and benefits. On the website, you’ll find out:
- What you’d pay for health insurance plans offered in your state
- How much, if any, premium tax credit you’ll get
- If you or your children qualify for free or low-cost children’s health insurance program or coverage
Avoid the temptation of going with the lowest monthly premium. Check out all the costs of the plans, including benefits, health insurance options, subsidies, co-pays, deductibles, and the total amount you’d have to pay if you rack up high medical bills.
Health care coverage & unemployment
In the current economy, about one-third of jobless workers remain unemployed for more than six months, according to the Bureau of Labor Statistics. If you know you can’t afford COBRA coverage that long, you may need to move to a lower-cost marketplace policy within 60 days of losing your job.
There are open enrollment windows for the marketplace policies. For most states, the open enrollment period begins on November 1 and runs through January 15. If you lose your job or your income changes, you can enroll even if you’re outside the enrollment window. However, your ability to enroll outside the special enrollment period lasts only for 60 days – starting on the date you lost your job or your income changed.
As income drops, health insurance choices expand
Medicaid programs cover low-income Americans and certain people with disabilities. Some states have expanded Medicaid coverage to individuals with income above the federal poverty level, so you should check if your state is among them. The Children’s Health Insurance Program (CHIP) covers children and sometimes pregnant women.
Other options for coverage
Don’t like the options you’re seeing? Here are some other sources to try:
- Younger than 26? You can get on your parents’ policy.
- Belong to a trade or professional association? See if it offers members health insurance plans.
- Look for a local free clinic.
- Many people qualify for Medicare Part A and Part B when they turn 65 – if you’re within three months of being 65 or older, you can sign up just for Medicare and apply for retirement benefits later.
Tax penalties for the uninsured
Before 2019 the Affordable Care Act penalized Americans who had no health insurance coverage. Read up on the specifics of the tax penalty. However, while there is no longer a federal shared responsibility payment, several states currently have health coverage mandates.
Learn from H&R Block what you need to bring to your next tax appointment in order to have a successful visit.
Health savings accounts can be confusing. Taxpayers may miss out on hundreds of dollars’ worth of deductions when they make mistakes - find tips at H&R Block.
Afraid of owing a penalty for not having health insurance? See if you qualify for the hardship exemption with the experts at H&R Block.
If you are under 30 and no longer covered by your parents, consider looking into the cost of a catastrophic health insurance plan. Learn more at H&R Block.