How to keep health insurance after a job loss or furlough
Key takeaways:
- There are several options (both private and government-funded) for health coverage after a layoff or furlough (temporary, unpaid leave from work).
- Be careful when exploring short-term health plans. Many of them are expensive and have limited benefits.
- If you need help, don’t be afraid to use a reputable insurance broker.
There’s a lot on your mind when you lose your job. A common concern? Protecting your finances in case of a major health expense.
It’s easy to think medical costs are less than they are. According to HealthCare.gov, fixing a broken leg can cost up to $7,500 and the average three-day hospital stay is around $30,000.* And cancer care can cost hundreds of thousands of dollars. You’ll pay these costs out of your pocket if you don’t have strong health coverage.
Whether you're dealing with a layoff or furlough, knowing your options is crucial.
Here are your main coverage choices after a job loss
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COBRA (the Consolidated Omnibus Budget Reconciliation Act) lets you use employer-sponsored health insurance after a job loss.
It’s an option if you’ve already joined an employer-sponsored medical, dental or vision plan. Your company also has to have 20 or more employees. You usually have 60 days after losing your coverage to join COBRA.
COBRA makes sure you have no gaps in care. But it can be pricey. Some employers subsidize these costs for a while. You can also use a health savings account (HSA), health reimbursement arrangement (HRA) or individual retirement account (IRA) funds to pay your premiums. For more on COBRA, check your benefits info or talk with your employer’s benefits administrator. Learn more about how COBRA works.
There isn’t COBRA coverage offered if your employer has gone out of business. But more affordable choices may be available.
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Medicaid is a type of public health insurance that’s offered by state governments. It gives families and individuals free or low-cost medical coverage when they need it. Eligibility is based on:
- Age
- Income level
- How many people are in your family
- Disability
- Pregnancy
Medicaid enrollment is open all year. That means you can sign up at any time. Check your eligibility with your state Medicaid office.
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The Health Insurance Marketplace at HealthCare.gov has subsidized coverage for people with lower incomes. Most people who don’t qualify for Medicaid can join at the marketplace. Many people pay little or no monthly premiums at all.
A layoff or furlough most often counts as a qualifying event. You can join within 60 days of your coverage loss. If not, open enrollment for the next plan year runs from November 1 to January 15. To learn more, explore our individual and family plans.
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People ages 65 and over can opt for Medicare. This income-based program can include:
- Hospitalization (Part A)
- Medical services (Part B)
- Prescription drug coverage (Part D)
You can join Medicare starting three months before your 65th birthday and up to three months after. Missing this time frame could leave you with late penalties. So acting quickly matters. You can apply online, by phone or in person at your local Social Security office. Find out more on the Social Security website.
Another choice is an all-in-one Medicare Advantage plan (Part C) through a private insurer like Aetna®. This will have medical and hospital coverage. It may also cover:
- Prescription drugs
- Dental
- Vision
- Fitness memberships
- Other extras
Medicare can be confusing. That’s why Aetna runs a no-cost Medicare Transition Services program. Licensed agents can talk with you about all your health care choices. They’ll help you avoid penalties and decide if Medicare is a good choice for you. Just call 1-888-675-0447 ${tty}.
You can read more about Medicare and how to choose the right plan.
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Losing employer-sponsored health insurance counts as a life event. That means you can join a family member’s plan if you’re eligible. People under age 26 can be added onto their parents' plan. People over 26 can think about joining a spouse’s or partner’s plan. Or they can buy individual coverage. Talk with the proper Human Resources department for more information.
Is a short-term plan a good choice?
These plans can work as a short-term fix (1 to 12 months) if you’re in good health. They cover an insurance gap quickly and cheaply. But these plans can’t take the place of traditional health coverage. This is because they don’t have to meet the needed benefits of the Affordable Care Act.
For example, short-term health plans don’t have to cover:
- Preexisting health problems
- Prescription drugs
- Mental health care
- Maternity benefits
Comprehensive plans in the Health Insurance Marketplace do have to cover these needs.
Always read the fine print on a short-term plan (or any other health plan) if it seems too good to be true. Also, watch out for imposter websites selling cheap, insufficient coverage.
Find the right coverage with professional help
Choosing the right health insurance can be a lot of work. Don’t know where to start? Think about meeting with a licensed insurance broker. They will walk you through your options. They can help you find a plan that fits your needs and budget. Their services are most often free and can be a great resource.
You can find a broker near you through the Health Insurance Marketplace.
Content developed using AI and reviewed and edited by Aetna®.
Legal notices
Aetna is the brand name used for products and services provided by one or more of the Aetna group of companies, including Aetna Life Insurance Company and its affiliates (Aetna).
Health benefits and health insurance plans contain exclusions and limitations.