As if getting terminated from your job is not devastating enough, you still have to face the burden of losing your health insurance. It is imperative to understand your health insurance rights, and this starts with knowing the duration an employer has to provide health insurance after termination.
Currently, we do not have a law that sets a timeframe for employers to follow. It is possible to lose your coverage on the day you get laid off. Some employers will terminate your insurance at the end of the first or second month.
If you are an employee of a private company, there’s a law that allows you to temporarily maintain your current insurance through the Consolidated Omnibus Budget Reconciliation Act (COBRA). You, spouse, and dependents can use the COBRA coverage for 18 to 36 months.
However, there are other requirements you must meet to receive COBRA coverage.
· An employer must have 20 or more full-time workers unless a state has min-COBRA laws that apply to companies with less than 20 employees
· Termination must not be due to gross misconduct committed by an employee
· An employer must notify the health insurance provider within 30 days after job termination
· The plan administrator must respond within 14 days by mailing an employee a notice with information on how to elect COBRA
· A worker should select COBRA coverage within 60 days after receiving an election notice
· A worker should make payment within 45 days after electing the COBRA coverage.
With COBRA coverage, you have to take care of all the costs related to the health plan. Precisely, this includes 100% of the premium costs plus up to 2% administrative charges. Before termination, an employer often pays about 80% of your premiums. It means your health insurance cost will rise from 20% to 102% after getting laid off.
While COBRA enables you to keep your health coverage, the plan could prove to be very expensive.
If you find maintaining COBRA coverage too expensive, you’ll want to explore the following health insurance options:
1. Short-term health plan
Short-term plans can cover some of your family’s health care costs for up to 3 years. The level of coverage varies, but these plans usually don’t cover the following benefits:
· Maternity and newborn care
· Mental health
· Substance abuse
· Outpatient prescription drugs
Please note that not all states offer temporary plans. If you have a pre-existing medical condition, the short-term health plan providers might reject you or charge you high premiums.
2. Individual health insurance
Unlike short-term plans, individual health plans offer more comprehensive health benefits because they comply with the ACA requirements. You can access these plans through the Marketplace or outside the exchanges.
If your income ranges between 100% and 400% of the federal poverty levels (FPL), you will receive federal subsidies and tax credits. Well, this will help reduce the cost of your health individual insurance plan.
With Medicaid, low-income earners can enjoy comprehensive health care benefits at a low cost. If you’re a resident of a state with expanded Medicaid coverage and your income is below 138% FPL, you may qualify for Medicaid.
If you need help choosing a health insurance plan, consult a licensed insurance agent to simplify the process for you at no cost.
Michael Dunbar Insurance has over 20 years of experience in the field, and you can expect to work with a trusted insurance company in New Orleans. Call (985) 607-4949 today to schedule a free consultation. Or, fill out the online quote form to speak to one of the representatives of Michael Dunbar Insurance.
Michael Dunbar Insurance is a trusted insurance company in New Orleans that works with the insurance products that directly affect people.