This is a guest post by Donna Ballman, a Florida employment lawyer and author of the book, Stand Up For Yourself Without Getting Fired: Resolve Workplace Crises Before You Quit, Get Axed or Sue the Bastards. Ballman writes the blog, “Screw You Guys, I’m Going Home” and tweets as @EmployeeAtty. Her past articles for FORBES include, “Ten Things Your Boss Doesn’t Want You To Know.”
As if getting laid off weren’t devastating enough, you probably lost your health insurance the day you got fired. Overwhelmed as you may be with other aspects of getting terminated – like applying for unemployment insurance, whether you will ever find another position, how to make money without a job, and how you will pay the bills meantime – it’s important to deal with your health insurance issues right away. Here are the options.
Your company’s plan. I see many employers cut off insurance the same day they lay an employee off, but that might not be legal. If the company took money out of your paycheck for insurance for the whole month but cut you off before the end of the month, they may have broken the law. Contact the human resources or payroll department, point out that you have paid for the month and ask them to put you back on the insurance through the end of the month. Every week of coverage can make a difference. (See too, “How To Get The Best Severance Deal.”)
COBRA. Under the Consolidated Omnibus Budget Reconciliation Act, known as COBRA, you are entitled to continue your health insurance plan through your employer, and pay your own way. Even if your insurance was cut off when you were fired, the employer must notify the plan administrator within 30 days that you were terminated, and then the administrator has another 14 days to send you the notice on how to elect COBRA coverage.
The downside is you will pay 100% of the premium, which will be very expensive, and COBRA coverage normally only lasts for 18 months. It’s also rough if you have medical costs during the 44-day gap period, because your doctors will be told you have no insurance. Still, once you elect and pay for COBRA, your expenses will be covered retroactively. Most people can’t afford COBRA, but medical bills are one of the quickest ways to go bankrupt.
Obamacare. The insurance exchanges marketplace offered under Obamacare is almost inevitably going to be less expensive than COBRA. However, shop carefully. I checked out Florida options for a family with two teenagers and two adults in their 50s and an expected annual income of $20,000 (slightly more than you would get after a year on unemployment in Florida). The teens might qualify for other options but the cheapest option for the adults was $511 per month with a $12,600 deductible, In other words, you would have to pay $12,600 in out-of-pocket expenses before you were covered. If your income is $20,000 per year, there’s no way you could afford it. However, the next highest option was $546 per month with a $11,600 deductible, with the caveat that there was also a small co-pay for primary care doctors. This would probably be the better option.
Plans with higher premiums had much lower deductibles, so if you expect high expenses you’d be better off paying more monthly. The premium for the top-of-the line plan for my hypothetical couple would be $1,490 per month with no deductible. With such a wide range of options, there should be something for almost everyone.
People in other states (whose governors didn’t refuse to cooperate with Obamacare) have even better, less expensive options. For instance, in Vermont a couple can get insurance with a $3,000 deductible for $683.90 per month or a top-level platinum plan with a $200 deductible for $1,188.60 per month. A couple making $40,000 per year would also qualify for a subsidy in Vermont of $713 per month. Depending on your state, you may be entitled to subsidies or lower premiums based on your income.
Medicaid. My Florida couple with income of $20,000 per year wouldn’t qualify for Medicaid, but the same couple, earning up to $30,000 per year in Vermont would. This, again, depends on whether your governor agreed to cooperate by expanding Medicaid benefits under Obamacare. Unfair? You bet. Vote better next time if you’re in one of the unlucky states.
CHIP. The Children’s Health Insurance Program, or CHIP, provides coverage for children, and in some states pregnant women, if your income is too high for Medicaid and you can’t afford private insurance. Routine “well child” doctor and dental visits are free under CHIP, but there are copayments for some services and some states have a monthly premium. Every state is different, but the maximum is 5% of your annual family income.
Spouse’s insurance. Don’t forget the possibility of getting onto your spouse’s insurance if he or she works for a company that offers health insurance. There may be limited enrollment periods, so don’t delay looking into what is available and when.
Private insurance. There are other private insurance options, but the premiums are likely to be high. Still, it might be worth looking around at what is available in your area.
Go bare. This is not an option I recommend, but many people do it. As of this year, you must be covered by health insurance or pay a penalty on your taxes unless you fit within an exemption. Plus, you’ll have to pay 100% of your medical costs. It’s one of the quickest ways I know to go bankrupt.
You have until March 31, 2014 to participate in open enrollment in the health exchange marketplace. If you lose your insurance after that, it will be considered a qualifying life event that allows you to enroll within 60 days. If you have checked out Medicaid and all the other options and still can’t get insurance, you can look for free clinics in your area and most emergency rooms aren’t allowed to turn you away.
With these steps out of the way, you can focus your attention on your job search. Have a healthy year!
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