Unfortunately, being fired or laid off is a real fear for many employees in today’s competitive work environment. With an extremely high level of unemployment plaguing U.S. workers, it’s always a potential that’s lurking around the corner, and when fired, the list of concerns is long, but at the top of that list for many people is the issue of health insurance.
Even if you’re not afraid of being fired or laid off in the immediate future, planning is vital to ensure that you and you’re family are protected in case of an emergency situation.
What Are the Options?
The first step of planning for health insurance in case you lose your job is to know your options. Knowing these options ahead of time can make it easier in case the situation does arise. The first step is to know what your employer may or may not cover if you’re laid off or fired. For example, many employers offer severance packages that provide some level of health insurance protection for a period of time after an employee is let go. Know the stipulations of severance coverage that may exist for your position.
COBRA is one of the most popular options for employees that have lost their job and it provides health care coverage under specific conditions. In addition to being applicable for those individuals that have lost their job, it can also be used for employees who have reduced work hours and have lost coverage as a result.
There are two main factors that are important to be eligible for Cobra. The first is that you must have been enrolled in the health care plan provider by your employer when you were employed and the second is that the health plan should still be in use for current employees.
With COBRA, time is of the essence—in order to ensure that coverage is continued, you must sign up within a certain window of time, which is usually within 60 days. It’s also wise to remember that COBRA can carry a high price tag, with the standard cost usually amounting to over 100% of the premium.
Individual health coverage is an option for people who are laid off or quit their jobs and it offers a much higher level of flexibility than COBRA, because you’re able to shop around and find a plan that suits your needs. You can choose from options that are the same as what was offered by your previous employer, or you have the ability to choose a plan that offers a lower level of coverage.
In many instances, individual coverage is less expensive than COBRA.
Government and Free Insurance Programs
The government offers several free and low-cost insurance programs for eligible individuals and families, including Medicaid and SCHIP. Medicaid is available to people in the U.S. who meet certain financial requirements, and the benefits and enrollment requirements are based on the state in which you live.
SCHIP is a way for children to receive health insurance if their parents make too much money to qualify for Medicaid but are still unable to afford coverage.