Minneapolis, MN – In the United States, more than 156 million people get health coverage through employer-sponsored insurance, making the loss of coverage a top concern in the event of a layoff. Now, with a wave of corporate layoffs across the country, healthinsurance.org is offering several tips to help consumers stay insured if they lose their employer-sponsored coverage.
“Layoffs create a double hardship for many people because they result not only in the loss of income, but also in the loss of health insurance benefits,” said Louise Norris, health policy analyst for healthinsurance.org. “Health insurance is an important way many families protect themselves from health and financial risks, so it’s important for consumers to know they have coverage options if they experience a layoff.”
1. Take advantage of the special enrollment period to sign up for ACA coverage
Individuals who lose their employer-sponsored insurance due to a job loss can enroll in ACA-compliant health coverage during a special enrollment period (SEP).
“The Affordable Care Act built in special enrollment periods as a way to protect consumers whose life circumstances have changed in a way that results in the loss of health coverage,” said Norris. “These special enrollment periods offer a limited opportunity to enroll in comprehensive replacement coverage – without a gap in coverage.”
Special enrollment periods for individual and family coverage typically are 60 days long, beginning at the time of a qualifying event. But if the qualifying event is the loss of other health coverage, the special enrollment period can start as early as 60 days prior to the loss of coverage. This advance enrollment window allows an employee to sign up for ACA coverage and have it take effect when their employer-sponsored coverage ends – thus avoiding any gap in coverage.
As with open enrollment, consumers buying coverage during an SEP may be eligible for subsidies to help reduce the cost of their insurance coverage. As a result of the American Rescue Plan and recently passed Inflation Reduction Act (IRA), subsidies in recent years have been higher and easier to qualify for compared with previous years.
2. See if you can enroll in another employer-sponsored plan
If coverage is available through another employer plan – either through a spouse’s employer coverage or through a second job – that coverage will also have a special enrollment period. However, special enrollment periods for employer-sponsored plans generally only continue for 30 days after the loss of other coverage.
3. Find out if you qualify for Medicaid
Before seeking ACA coverage through a special enrollment period, individuals and families may want to check their eligibility for Medicaid. Medicaid provides health insurance coverage to qualified families with low income, pregnant women, children, and other eligible people. Eligibility varies by state; 38 states and the District of Columbia have expanded Medicaid eligibility to cover more Americans with lower incomes.
“Medicaid can provide a safety net if you have just been laid off and can’t afford other health coverage, either for yourself or for your family,” Norris said. “It never hurts to check your eligibility to see if you qualify, particularly if you live in a state that has expanded Medicaid.”
And Medicaid eligibility can be determined based on annual income or current monthly income, so a person between jobs may be eligible now – even if their income for the rest of the year would be too high to qualify for Medicaid. This differs from subsidy eligibility in the marketplace, which is always based on total annual income. Keep in mind there is no enrollment period for Medicaid, so individuals who reapply in the future can do so at any time of the year.
4. Continue your coverage through COBRA or state continuation coverage
Individuals losing their job may be able to continue coverage through their employer-based health plan even after employment ends. Under federal law, employees are eligible for COBRA coverage for up to 18 months after a job loss involving an employer with 20 or more employees. However, under COBRA, the consumer must pay the full cost of the premium on their own, including the amount their employer was previously paying. That said, some employers cover some or all of the cost of COBRA for at least a few months, as part of their severance package. Similarly, a state-based requirement may allow for continuation coverage even for those employed through a smaller company.
“If you’re happy with your current coverage and can afford to take over the full cost of the premium, continuation coverage is a great option,” Norris said. “The premiums will likely be quite a bit more than you were paying when you were employed, and you won’t be able to access any subsidies that you might have been eligible for in the marketplace. But you won’t have to start over mid-year with a new deductible and out-of-pocket exposure.
“Never just assume COBRA is your best coverage option, but it’s definitely an option to explore.”
5. Consider enrolling in a short-term health plan
Consumers can also enroll in short-term health insurance at any time of the year. Short-term plans are not required to cover the essential health benefits covered by ACA plans, so consumers are advised to review short-term plan details carefully before enrolling.
“If you’ve just been laid off, or expect to be laid off, you have options for keeping health coverage in place,” Norris said. “Find out what makes the most sense for your situation, and make sure you have a plan for staying covered.”
Healthinsurance.org is a free online source of consumer health resources, including information about individual health insurance, major medical insurance and affordable medical insurance.
Amy Fletcher Faircloth [email protected]