Facing unemployment is always daunting. Whether you were laid off or fired, there are new realities to face if your employment ends. Health insurance is one of those realities, as most Americans get employer-based group coverage. Therefore, a job loss may mean the loss of your health coverage.

If you lost your job and need health insurance, you probably have a lot of questions going through your head. How can you get health insurance in between jobs, and how long will it take you to get health insurance at your new job? If you find yourself asking, “I lost my health insurance now what?”, you have options.

Health coverage options may vary depending on your situation, but we’ve outlined some ways to get health insurance if you’ve lost your job. Learn more about how to cover a lack of health insurance between jobs and figure out how to find the right insurance to meet your needs.

The impact of job loss on health insurance

 Losing a job can have significant implications for health insurance coverage, often leaving individuals and their families without access to vital healthcare services. For many, employer-sponsored health insurance provides essential coverage, and the loss of this benefit can be daunting. Without employment-based coverage, individuals may face challenges in obtaining affordable health insurance, leading to gaps in coverage and potential financial strain. It’s essential to explore alternative options promptly, such as COBRA continuation coverage or coverage through a spouse’s employer, to ensure uninterrupted access to healthcare services during this transitional period. Understanding the impact of job loss on health insurance is the first step in proactively managing one’s healthcare needs during times of uncertainty.

Do you need health insurance if you lose your job?

Yes, even if you lose health insurance through your job, you need to have health coverage that can protect you and your family. If you do not have health coverage and are involved in a traumatic accident, you may be responsible for 100% of the costs out of pocket. In addition, depending on the state you live in, you could face a financial penalty if you do not have health insurance. That is why you need to avoid a health insurance gap between jobs if at all possible.

Potential consequences of being uninsured or underinsured

Being uninsured or underinsured can have serious repercussions for individuals and their families, both financially and medically. Without health insurance coverage, individuals may delay seeking necessary medical care due to concerns about costs, leading to the exacerbation of health conditions and potentially more severe health outcomes. Additionally, being uninsured can leave individuals vulnerable to high medical bills in the event of unexpected illness or injury, potentially leading to financial hardship or even bankruptcy. Furthermore, lacking adequate coverage may result in limited access to preventive services and screenings, increasing the risk of undiagnosed health issues. It’s crucial for individuals to prioritize obtaining the right health insurance coverage to safeguard their health and financial well-being.

Steps to take to maintain health coverage after job loss

Losing a job can be a stressful experience, especially when it comes to maintaining health insurance coverage. However, there are steps individuals can take to ensure they continue to have access to vital healthcare services during this transitional period. From exploring COBRA continuation coverage to researching alternative options like Medicaid or Marketplace plans, there are various strategies available to help individuals maintain health coverage after job loss. By taking proactive steps and understanding the available resources, individuals can navigate this challenging time with confidence, knowing that their health insurance needs are being addressed.

Consider how long your prior employer’s coverage lasts

In some cases, you may continue to have health insurance coverage through your prior employer until the end of the month. In other cases, your former employer may continue to cover you only until the last day of employment or, on the other end of the spectrum, until the end of the year. It varies from company to company as well as the policy you have. It also depends on where you live.

When you leave your prior employer, they should give you a letter that specifies exactly how long you have health coverage.

When you can enroll in new health insurance

Under the Affordable Care Act, also known as Obamacare, you should be eligible for a special enrollment period. What this means is that you do not need to wait until the annual enrollment period to find a health plan on the marketplace.

For the special enrollment period, you need to have a qualifying event, one of which is losing your job. All you need to do is go online, answer a few questions, and you should be allowed to purchase a health insurance plan on the marketplace during your special enrollment period.

Evaluate your options for health insurance after job loss

Now that you’ve experienced job loss, it’s crucial to evaluate your options for health insurance coverage. Start by exploring COBRA continuation coverage, which allows you to temporarily keep your employer-sponsored health insurance plan. While COBRA can be a valuable option, it’s essential to consider the potentially high premiums. Alternatively, you can research Marketplace plans through the Affordable Care Act, which offer comprehensive coverage options tailored to your needs and budget. Additionally, you may qualify for Medicaid, a state-run program that provides free or low-cost health coverage to eligible individuals and families. By carefully evaluating these options, you can ensure continued access to essential healthcare services during this transitional period.

Options for health insurance in between jobs

If you are looking for health insurance between jobs, you have a few options available to you. If you lost your job’s health insurance, you could consider the options below:

COBRA Coverage

If you can do so before you leave your job, carefully read through your employer’s severance or exit package. Write down the contact information of your HR department in case you have questions after you leave.

If you lost job-provided health insurance, you might have an option to extend it for a limited time. The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers with 20 or more workers to give their employees the choice to continue health coverage for up to 18 months after their position has ended. COBRA coverage covers you, your spouse, and any other dependents who were on your health plan. Rules may vary by state, so check with your company’s HR department.

Also known as “continuation coverage,” COBRA insurance may be available if you (or a family member) have lost job-based health coverage due to:

• Voluntary or involuntary job loss
• Loss of work hours
• Death
• Divorce

You generally have at least 60 days to enroll in COBRA coverage. Coverage usually starts on the date you get notice of COBRA coverage or the date that your current coverage ends, whichever comes first. If you decide not to enroll and later change your mind, you can still sign up as long as you’re still in the 60-day time frame.

An important thing to keep in mind is that your costs are often much higher with COBRA coverage and you’ll be responsible for the total premium cost if you go this route. Typically, while you’re employed, your employer covers a portion of the monthly premium, and you pay the rest. If you get COBRA coverage, you’ll pay the total premium cost along with a 2% administrative fee.

One benefit of extending your health coverage through COBRA is how you can continue the exact same plan you currently have.  There’s no interruption in your coverage while you find another job or other health coverage. However, because the costs can be high and COBRA coverage only lasts 18 months at most, COBRA is usually meant to fill a gap in coverage until you find a long-term health insurance option.

Self-Purchased Insurance

Your first option is to head to the marketplace to look at the options. You are purchasing health insurance for yourself. You can compare each plan’s features, benefits, and coverage levels. You should expect this health insurance plan to be more expensive than the one you had at your job because no one is subsidizing your coverage. You can shop for coverage and compare plan features with eHealth.

You should also consider how long it might be until you get a new job. When you start another job, your new employer should provide you with health insurance, so you do not necessarily want to spend more than you have to. You might even be interested in a plan that provides catastrophic coverage only, assuming that the next time you need preventive care, you may have another job. If you are over the age of 65, you may also be eligible for Medicare.

Spouse’s Insurance

Another option is to get health insurance through your spouse. If you are married and your spouse has a job, then he or she might be able to add you to his or her insurance plan through his or her employer. You should talk to your spouse about how to add you to their health plan. Your spouse may also need to talk to his or her employer to figure out how this happens.

While it will be an additional cost that’s taken out of their paycheck, it will probably be more affordable than purchasing health insurance outright on the marketplace. You may also receive better coverage if you can be added to your spouse’s health insurance depending on their policy.

Affordable Care Act & Special Enrollment

Another option is to sign up for an Affordable Care Act plan (ACA). While you typically can only get health insurance during Open Enrollment, losing job-based health insurance is a qualifying life event, meaning you’re eligible for a Special Enrollment Period to choose a new plan. This applies whether you were let go from your job or quit.  You typically have 60 days to select an ACA plan during your Special Enrollment Period. If you are seeking an ACA plan, eHealth offers dozens of carriers and access to free health insurance quotes both online and via our customer support line.

If you aren’t immediately able to find another job that provides employer-based health insurance, an ACA plan may provide more comprehensive coverage in the meantime. It is important to note how this plan must cover all pre-existing conditions as well. All ACA plans are required by law to cover 10 essential health benefits including preventive services, maternity care, and hospitalization. States may also expand coverage beyond these minimum benefits, which may vary by location. Depending on your income, you may be eligible for a subsidy to help with costs.

You can often apply for new ACA coverage to start as early as the first day of the month after you lose your job and current health insurance, but each insurance company sets its own application cutoff times.  Most insurance companies typically require an application to be submitted by the 15th of a month for the insurance policy to start on the 1st of the following month. 

To qualify for a Special Enrollment Period, keep in mind you must be leaving a job that provided employer-based coverage. If you lose a job that did not provide health coverage (such as a part-time or temp position), you usually won’t be eligible for a Special Enrollment Period. However, there are other qualifying life events that may make you eligible to enroll in coverage outside of Open Enrollment. States may also expand eligibility rules for special enrollment in certain circumstances.

If you have questions or are unsure whether you may qualify for a Special Enrollment Period, an eHealth licensed insurance agent can walk you through the different health care options by state.

Short-Term Health Insurance

Another way to get health insurance if you’ve lost your job is short-term insurance. These plans typically offer health coverage for up to 12 months at a time. Some states even allow you to renew coverage. One benefit is that you can enroll in a short-term plan at any time; you don’t need to wait for Open Enrollment or qualify for a Special Enrollment Period.

Please note that short-term coverage is not the same as Marketplace coverage, and these plans are not required to cover minimum essential health benefits like maternity care or preventive services. In addition, unlike Marketplace plans, short-term plans do not cover pre-existing conditions and do not qualify for any government subsidies. These plans provide limited, temporary medical coverage and may be an option if you’d like some coverage until you’re able to get major medical insurance — especially if the alternative is not having coverage at all.

Catastrophic Health Coverage

Catastrophic health plans are high-deductible plans that come with low monthly premiums.

These plans are considered major medical insurance and are required to cover the same 10 essential health benefits as Marketplace plans. If you’ve lost your job and still need health insurance, catastrophic health insurance would cover you if anything major happened.

Because these plans have such a high deductible, they’re really meant to cover you in a worst-case scenario, like hospitalization for an injury or illness. For routine medical expenses like doctor appointments or preventive screenings, you’ll generally pay out of pocket. However, these plans will cover at least three primary care visits every year, even before you’ve met your deductible.

To be eligible, you must have a “hardship exception,” meaning it’s been determined you aren’t able to afford health insurance.

Medicaid or CHIP

Medicaid offers free or subsidized health coverage for individuals and families with limited income. You can apply for the Medicaid program at any time. There are no open enrollment periods. Eligibility depends on income, assets, and household size, and criteria varies by state. If you get unemployment benefits, this will be calculated into your eligibility. Because many states have expanded Medicaid eligibility, you may still qualify depending on where you live. To apply or to get more information, contact your state’s Medicaid department.

Medicaid isn’t the only option for those facing job loss and needing health coverage; the Children’s Health Insurance Program (CHIP) is another valuable resource. CHIP provides low-cost or free health coverage for children in families that earn too much to qualify for Medicaid but cannot afford private insurance. Like Medicaid, CHIP eligibility criteria vary by state and typically depend on factors such as income, household size, and age of the child. Enrollment in CHIP is available year-round, with no open enrollment periods, making it accessible when needed most. To find out if your child qualifies for CHIP or to apply, reach out to your state’s CHIP program for assistance. By exploring Medicaid and CHIP options, individuals and families can find the healthcare coverage they need to navigate the challenges of job loss with confidence and peace of mind.

Talk to an expert at eHealth

You now have a better idea of your coverage choices going forward. As in any situation, coverage details vary by plan and state. To find the right information that is specific to your needs, talk to a specialized broker at eHealth.

Representatives available:

Mon – Fri, 9am – 7pm ET

1(833)-937-0547

What to do if you lost your job and need health insurance: FAQs

How long does it take for insurance to go into effect at my new job?

Getting health insurance is one of the most important parts of starting a new job. In general, your health coverage will start on the first day of your employment; however, there may be a waiting period of 90 days before your health coverage starts. As you take a look at health insurance plans through your new employer, you need to clarify exactly when your health insurance starts, as you may need to cancel a short-term or COBRA health insurance policy.

What are the pros and cons of short-term health insurance?

 Short-term health insurance offers flexibility and affordability, making it an attractive temporary option for those in transitional periods or facing temporary gaps in coverage. Pros include lower premiums compared to traditional plans, customizable coverage options, and quick enrollment. However, there are also cons to consider. Short-term plans often provide limited coverage, excluding pre-existing conditions, preventive care, and maternity services. Additionally, they typically have higher out-of-pocket costs and may not offer the same level of comprehensive coverage as long-term plans. These plans are meant to act as a temporary option for up to three months. It’s essential for individuals to weigh these factors carefully and consider their specific healthcare needs before opting for short-term health insurance.

Are there any alternative options or resources available for uninsured individuals?

Yes, several alternative options and resources are available for uninsured individuals to access healthcare services. These include community health centers, which offer affordable or free medical services to low-income individuals and families. Additionally, many states offer programs such as Medicaid or the Children’s Health Insurance Program (CHIP), which provide free or low-cost health coverage to eligible individuals and families. Federally Qualified Health Centers (FQHCs) also provide comprehensive primary care services on a sliding fee scale based on income. Furthermore, individuals may qualify for financial assistance or subsidies to help offset the cost of health insurance premiums through the Health Insurance Marketplace. Exploring these alternative options can help uninsured individuals access the healthcare they need while managing costs effectively.

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