Holding on to Health Coverage: 5 Steps to Consider If You’ve Been Laid-Off

Not a day goes by that we don’t read in the newspapers or watch on the evening news about another company laying off a percentage of its workforce. Big corporation or small business, blue collar or white collar, workers huddle around the water cooler wondering who will be next.

With the loss of a paycheck comes the loss of a benefits package that includes health coverage for both individual workers and those with family responsibilities. If you’re healthy, it’s worrisome. If you, or a family member, have health issues, it’s enough to keep each of us up at night worrying about how we’re going to cover all our expenses.

But I don’t believe that being laid off should automatically mean you go without health coverage. I started the nonprofit Foundation for Health Coverage Education (FHCE) because I knew that there were government-sponsored programs put into place by well meaning legislators who just didn’t communicate effectively to uninsured Americans how to find out if they were eligible.

In fact, I’d like to share with you 5 steps you can take to review how to hold on to your current coverage, or transition to some form of gap coverage, while you seek new employment and benefits from your next job.

5 Steps to Take for Holding on to Your Insurance Coverage

1. COBRA. While this may be the most expensive option, it’s a good one for someone with a pre-existing medical condition. For people recently laid off, the first, immediate option to review is COBRA coverage. COBRA is required of businesses with 20 or more employees. It provides continuation of group health coverage that otherwise might be terminated. One common myth about COBRA coverage is that it is only good for 18 months, but quite often this is not the case as it can be continued indefinitely through state COBRA programs. First steps include checking with the employer’s human resources department to receive complete information on how to qualify for COBRA, the costs and how to apply. If COBRA is an option, it should be carefully reviewed before being refused as once it’s dismissed, it can’t be recalled.

2. Going from a double- to a single-income family. For the family in a two-income home where one parent has been laid off, checking into programs like Healthy Families is an important step. In many states, a family of 4 can make up to $60,000 (California, Connecticut, Hawaii, Illinois, Indiana, Maryland, Massachusetts, Missouri, New Hampshire, New Jersey, Pennsylvania, Tennessee, Vermont, Washington, D.C.) and in other states up to $50,000 a year (Alabama, Georgia, Louisiana, New Mexico, New York, Washington) and still qualify the children for comprehensive coverage. These programs may provide low-cost health coverage for children and teens up to age 19 including comprehensive health, dental and vision coverage. Moving the family’s young dependents from private insurance to government sponsored plans can reduce monthly premiums and perhaps make a family’s adult private premium coverage affordable.

3. High Deductible Plans. For healthy individuals, another cost effective option while unemployed may be to purchase lower-cost high deductible individual coverage. until new employment is found. With the exception for New York, Massachusetts and Vermont, a person can obtain this coverage for anywhere from $50 to $150 per month providing basic catastrophic coverage with a high deductible until he or she becomes eligible for the new employer’s plan. You can visit www.nahu.org for a national listing of insurance brokers near you.

4. Coverage for Pre-existing Conditions. For people who have been laid off and must purchase individual health insurance but are unable to obtain coverage due to a pre-existing condition, many states have government sponsored medical risk insurance pools (such as California’s Major Risk Medical Insurance Program). State residents who qualify for these programs participate in the cost of their continued coverage by paying premiums that are supplemented by the state. Go to your state’s government website to find out what type of medical pool coverage may be offered.

5. Help for Single Pregnant Women. For a single woman who is pregnant and doesn’t make more than $25,900 in a year, there are maternity programs state by state which will pay for the coverage of the baby before, during and after the birth of the child into the first year. With names like Access for Infants and Mothers, this often comprehensive coverage provides low-cost or free health coverage for pregnant women before, during and following the delivery of the baby and health coverage for their newborn through the baby’s first year of life.

Additional Resources

https://nahu.org/

https://www.dol.gov/general/topic/health-plans/cobra

https://www.healthcare.gov/unemployed/cobra-coverage/

Philip Lebherz: The Foundation for Health Coverage Education is a non-profit organization based in San Jose, California. Our goal is to reduce the ranks of the uninsured. Attention to your health needs and those of your family is everyone’s responsibility.

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