How to handle health insurance if you lose your job

For the next few weeks, I am going to devote my weekly notes to the household financial stresses I know so many of you are dealing with or worried about as the coronavirus crisis sends our economy into a recession.

Let’s start with health insurance. If you are laid off from an employer who provides a health insurance plan, your coverage will end if you are laid off.  I need you to listen hard here: I want you to make it a priority to make sure you, and your family, continue to have health insurance coverage. I know I am asking you to spend money at a time when you have just lost your income, but please dig deep and consider what could happen if you don’t have health insurance.

There are two main ways you can go here. Stay on your ex-employers plan – if you’re allowed—or purchase a plan from your state’s(or the federal)  health exchange. Here’s what to consider:

Staying on the plan from your old job. There’s a federal law that requires any employer who had at least 20 full-time employees (for at least half of prior calendar year) to offer laid-off employees the right to stay on the group health plan. This is known as the COBRA rule. You can generally continue your coverage for up to 18 months, though in some cases you may be able to keep the coverage even longer.

If you want to continue coverage, your ex-employer is not obligated to pay any part of the premium. You will likely be required to cover 100% of the monthly premium cost, and will also be charged an additional 2% to cover administration costs for keeping you on the plan.

 If you are laid off, you generally have a 60-day window to decide if you want to keep your coverage.

Purchase coverage through the Affordable Care Act marketplace. If you are laid off you are immediately eligible to enroll in a health insurance plan offered by either your state marketplace, or the federal program (Use the healthcare.gov website to be connected to the right resource based on where you live.) You don’t need to wait for the annual “open enrollment” season. Losing a job entitles you to shop for a plan any time.

 I strongly recommend you explore your options if you purchase an ACA-plan. Given you have suffered a layoff, your household may qualify for a subsidy that will help cover your monthly premium costs. At the healthcare.gov website you can ask to be connected to a registered  health insurance agent or broker who can help you sort through your options. You typically won’t owe the agent or broker any money (they are paid by the insurance company if you buy a policy.)

Comparing the price of an ACA-policy with a COBRA policy is just the start. If you are currently a patient of a doctor (s) you want to keep seeing, call them up and ask if they accept any new coverage you are considering. Don’t rely on what the insurer’s website says, call and verify for yourself.

And for those of you who have continued to cover your adult children on your workplace plan (you are allowed to keep children on a plan until they turn 26) I need you to stand in your truth, and theirs: If they are working, they need to go onto the same ACA exchange and purchase their own insurance, or you must have them contribute to the monthly premium cost if you decide to take COBRA coverage that will keep you on your old employer’s plan.