With the roller coaster that has been the Kern County job market lately, many might wonder what their options are as far as health benefits. Dealing with health insurance in good circumstances can be confusing; trying to figure it out when you have the stress of a job loss can be downright overwhelming.
I’ve always looked at benefits as part of the financial planning process. Not only that, I have served employees in the Bakersfield area since the 80s, so I’m familiar with a lot of the employers and what they offer.
Let’s take a look at what your options might be if you’re facing a layoff.
Understand COBRA Coverage
The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to continue your employer-sponsored health insurance for a limited period after you leave your job. Under COBRA, you can keep the same coverage you had while employed, but you’ll need to pay the full premium, which includes both the employer and employee portions, plus a 2% administrative fee.
Pros:
- You maintain the exact same coverage.
- COBRA can be a good option if you have ongoing medical needs or dependents who are also covered under the plan.
Cons:
- COBRA can be expensive since you’re covering the entire premium.
- Coverage typically lasts only 18 months (longer in certain cases).
Action Step: Once laid off, you should receive a COBRA election notice within 14 days. Review the notice carefully and decide within the 60-day election period if COBRA is the right option for you.
Explore the Health Insurance Marketplace
The Health Insurance Marketplace, established under the Affordable Care Act (ACA), provides another option for obtaining health coverage. If you lose your job, you qualify for a Special Enrollment Period (SEP) to sign up for a plan outside the regular enrollment period. Keep in mind that you can also contact a benefits broker, which is a free service to you – they get paid by the company you choose.
Pros:
- You may qualify for subsidies or tax credits based on your income, which can make coverage more affordable.
- There are various plans to choose from, allowing you to tailor coverage to your needs.
Cons:
- Coverage options and costs can vary significantly.
- Navigating the Marketplace can be complex if you’re unfamiliar with the system.
Action Step: Visit HealthCare.gov to explore your options and apply for coverage. Be sure to compare plans and check if you’re eligible for financial assistance.
Consider Medicaid
If your income drops significantly after being laid off, you might qualify for Medicaid, a state and federal program that provides health coverage to low-income individuals and families.
Pros:
- Medicaid offers comprehensive coverage at little to no cost.
- Eligibility is based on income, so you may qualify even if you didn’t before.
Cons:
- Coverage and eligibility criteria vary by state.
- There may be limitations on which providers you can see.
Action Step: Check your eligibility and apply for Medicaid through your state’s Medicaid office or the Health Insurance Marketplace. This option can provide essential coverage if your financial situation changes drastically.
Look into Short-Term Health Insurance
Short-term health insurance plans can provide temporary coverage while you’re between jobs. These plans are generally less expensive than COBRA or Marketplace plans, but they offer limited coverage and benefits.
Pros:
- Lower premiums than traditional health insurance plans.
- Quick and easy to enroll in.
Cons:
- Coverage is limited, and these plans may not cover pre-existing conditions or certain essential health benefits.
- These plans are not ACA-compliant, so they may not offer the same protections.
Action Step: Research and compare short-term plans from different providers. Make sure you understand the limitations and exclusions before enrolling.
Evaluate Your Spouse’s or Partner’s Plan
If your spouse or domestic partner has health insurance through their employer, you may be able to join their plan. Losing your job is considered a qualifying life event, which allows you to make changes to your health coverage outside of the usual enrollment period.
Pros:
- You may be able to get comprehensive coverage at a lower cost than COBRA.
- You can coordinate benefits with your partner’s plan to cover more services.
Cons:
- Adding you to the plan may increase the premium.
- There may be restrictions on when you can join or how long you’ll be covered.
Action Step: Contact your spouse’s or partner’s HR department to learn about your options and the process for enrolling in their plan.
Seek Professional Guidance
Navigating health insurance options after a layoff can be overwhelming. It may be helpful to consult with a licensed insurance agent or financial planner who can help you understand your options and choose the best plan for your situation.
Action Step: Reach out to a professional who can assist you in evaluating your options, especially if you have complex health needs or financial considerations. If you're looking for a Bakersfield, CA financial planner, CLICK HERE to make an appointment with Charpentier Wealth Strategies.
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