Losing a job is incredibly stressful — especially if you relied on your former employer for health insurance coverage for yourself and your family. That’s what happened to Dr. Nathan Schaefer, a Wellmark Blue Cross and Blue Shield member with three young children under the age of six, whose wife is self-employed.
His company went through a restructure and he didn’t get rehired, which left him scrambling to secure health insurance for his family as he looked for another job. “The last thing I wanted was to have a lapse in coverage,” Schaefer says. “With a young family, you’re always concerned about someone needing medical care.”
Though Schaefer quickly found a job, his new health insurance didn’t kick in until the month after his previous coverage ended. “There was definitely some stress and confusion about what my options were for short-term health insurance,” he says.
If you find yourself suddenly out of a job due to circumstances like a layoff or furlough, here’s what you need to know to ensure you (and your family members) continue to have health insurance.
Don’t wait for open enrollment
When you buy your own health insurance Opens New Window (not through an employer), you typically sign up during open enrollment Opens New Window, a six-week period in November and December. There are, however, certain circumstances that allow you to enroll in coverage outside that window.
Life changes like getting married, having a baby, or losing job-based coverage External Site (no matter the reason) qualify you for a special enrollment period Opens New Window. You may also qualify for a special enrollment period if your employer stops offering health insurance or a change to part-time status causes you to lose your job-based plan.
A special enrollment period gives you 60 days from the day you lose health insurance to enroll in a new plan, no matter the time of year. The only time you aren’t eligible for a special enrollment period is if you voluntarily drop your job-based coverage while you’re still employed, or you lose your coverage due to not paying your premium.
Once your special enrollment period begins, you have a few different options for health insurance External Site.
Your options after losing job-based health insurance
You can keep your existing coverage temporarily.
The Consolidated Omnibus Budget Reconciliation Act Opens PDF — a.k.a. COBRA — allows you to keep your job-based health insurance for up to 18 months, even though you’re no longer with that company. The downside is that it can get expensive. According to the Kaiser Family Foundation External Site, employers typically cover 70 percent of the premium cost for family plans and 82 percent of the cost for individual plans. With COBRA, however, you’re on the hook for 100 percent of your plan’s premium — plus a 2 percent administrative fee Opens PDF.
If you see multiple specialists or are in the middle of treatment for a health condition, coverage through COBRA is usually a good option since it won’t disrupt appointments or force you to change health care providers. An important thing to remember is once you opt into COBRA, you can’t change to a different plan — outside of the standard open enrollment window for individual and family plans — until it ends 18 months later.
You can get a new plan.
If you don’t need to or can’t afford to stay on your existing plan through COBRA, you can sign up for a new one through the Affordable Care Act (ACA) marketplace at HealthCare.gov External Site. Depending on your income level External Site, you may qualify for subsidized coverage in the form of a tax credit.
Even if you sign up for a marketplace plan right away, you probably won’t be able to use your new coverage on that day. That’s because ACA plans go into effect the first day of the month after your job ends.
Other options for health insurance coverage
Depending on certain circumstances, you may have a few other options for health insurance after you lose employer-based coverage. For example:
- If you’re younger than 26 and lose your health insurance, you may be able to enroll in your parent’s current plan.
- If you’re 65 or older, you can sign up for Medicare.
- If your spouse currently has coverage through their employer, you can enroll in their plan.
- If you were the primary source of income for your family and now have little to no money coming in, you may qualify for Medicaid External Site.
With all the changes to the Affordable Care Act made in recent years, you may have heard about short-term health plans or health care sharing ministries. While these are still available options, they’re generally not your best bet.
Short-term health plans aren’t regulated by the marketplace and many don’t cover the essential health benefits Opens New Window the ACA guarantees — like preventive care — so your out-of-pocket expenses can quickly add up, despite paying lower premiums. And, health care sharing ministries — typically offered by Christian nonprofit groups — are not insurance and are not legally obligated to pay any of your claims.
Stuck on next steps?
An authorized Wellmark agent can help you — at no cost — you find the right plan to suit your unique situation. If you don’t have an agent, you can find one with this tool Opens New Window.
- CMS.gov — Tips for helping consumers who are losing employer-sponsored coverage Opens PDF
- Healthcare.gov — If you lose job-based health insurance External Site
- DOL.gov — FAQs on COBRA continuation health coverage for workers Opens PDF
- Kiplinger.com — What to do if you lose your health insurance during the coronavirus crisis External Site