Recently, many workers have lost their jobs from massive layoffs due to the coronavirus. According to a report from the Labor Department, the U.S. lost a staggering 20.5 million jobs just in April. Job loss means more than just a loss of a paycheck. Many workers who are recently unemployed are now also faced with the question: What about my health insurance?
It’s scary to lose something as important as health insurance in the midst of a pandemic, but don’t worry, we’ve got you covered. There are a number of health insurance options available to you on the market, including…
Consolidated Omnibus Budget Reconciliation Act (COBRA)
If an employee loses their job or experiences a reduction in their work hours, COBRA could be a viable health insurance option for both the employee and their dependents. An individual who has lost their coverage and is eligible for COBRA coverage will be offered the same coverage as an active employee. You will be given a 60-day election period to choose whether or not to continue coverage. If you decide waive COBRA, you can change your mind as long as it is within the 60-day election period.
An individual that selects COBRA will be able to continue with their same physicians, health plans, and medical network providers. Beneficiaries can also continue with coverage for pre-existing conditions and prescription.
However, the downside of COBRA is the high cost. Because the employer will no longer pay a portion of the premium, the entire cost is totally on the insured. COBRA coverage is also usually limited to between 18 and 36 months. If the employer decides to discontinue COBRA, then the employee and their beneficiaries will no longer have coverage.
The Affordable Care Act (ACA)
ACA plans are designed to make guaranteed issue health insurance plans available to everyone. These plans cover pre-existing conditions, along with essential health benefits that will not change from plan to plan. When applying for an ACA plan, you cannot be denied coverage even if you have pre-existing conditions.
The ACA has established an open enrollment period for individual health insurance. If you miss the open enrollment period, which runs from November 1 through December 15, and you have a qualifying event you will be able to enroll with a special enrollment period. Life-changing events like marriage, divorce, moving, having children, and losing a job are all considered qualifying events that will allow you to enroll during a special enrollment period.
Many who apply for ACA coverage also qualify for a tax credit, which is based on the annual income and the number of people in the household. This tax credit can reduce the monthly premium of the ACA plan that they want to enroll in.
Short-Term Health Insurance
Short-term medical plans are different from the ACA plans in that you will have to go through underwriting and it will not cover anyone with pre-existing conditions. If you meet the criteria for short-term plans, you may have coverage very quickly and the premiums are often much lower. To learn more about the differences between short-term and ACA coverage, click here.
Short-term medical plans are designed to cover you for an unexpected illness or injury. You should know that a short-term plan will only cover you for 30 days to 12 months. This would give you time to enroll in an ACA compliant plan at open enrollment. Be aware that having a short-term medical plan does not meet the health insurance requirements of the ACA Plans.
Losing a job can be scary, but you don’t have to make these decisions on your own. ARC’s licensed health insurance agents are readied with the information you need to make an informed choice about your health care coverage in between jobs. Contact us today for a free consultation.