Life and Health Insurance Options – What Happens in the Event of a Job Loss due to COVID-19

A job loss ranks among the top five most stressful events in life, and the efforts to prevent the spread of COVID-19 is delivering job losses by the millions. While the loss of employment brings immediate concern over lost wages and stress about how to pay upcoming bills, US workers also face the likelihood that a layoff could also mean a loss of life and health insurance. Here’s options to review now:

The Insurance Question

  • Stop and Review: One of the first steps to take after a job loss is to review company benefits to determine the next steps. Employers often provide life and health insurance through the company. Any layoff, furlough, or termination can put those critical policies in jeopardy.
  • Life Insurance: Most company policies offer cost-sharing to keep life insurance premiums low. In most cases, even a temporary leave from employment will put the coverage in limbo. Without action, an employer group policy will terminate. Contacting human resources could provide the option to transfer the policy to an individual plan without a lapse in coverage. Consumers transferring a group life policy to an individual one become responsible for the premiums.
  • Health insurance: Perhaps even more important than life insurance, during a health crisis is maintaining protection for healthcare needs. Access to an employer plan largely depends on how the employer codes the worker’s job status. In most cases, only furloughed employees maintain insurance during a layoff.

Without employer-sponsored insurance, workers have options to maintain health care coverage:

  • A COBRA plan allows former employees to keep the same policy with the individual paying the premium. Workers qualify for COBRA coverage if they lose their job or face reduced hours that no longer qualify for coverage. A plan can last up to 36 months.
  • Buy an individual policy through Acquiring insurance through the Marketplace typically requires registration during the open enrollment period between November 1 and December 15 of each year. However, in certain circumstances, such as losing qualifying health care coverage, consumers can enroll within 60 days of the loss of coverage.

In many cases, consumers can receive government-subsidized payments, which help with the cost of a policy during a job loss. For example, a family of four, earning $50,000 a year could receive $4,925 toward premiums, which is typically more than half the cost of a policy. Lower earners will receive a more substantial subsidy. In some cases, the allowance could include the full premium. offers a simple way to compare policies and enroll in a plan. All affordable care act (ACA) compliant plans will pay for all medically necessary treatments due to COVID-19.

  • The government health care program, Medicaid may also be an option. Applicants must meet income and asset tests to qualify. Most states count unemployment as income, which could disqualify many families.

Final Thoughts

The loss of life and health insurance can become a significant financial burden as families struggle to cover premiums during unemployment. However, they are essential insurance coverages to maintain during a deadly pandemic. The Marketplace provides subsidies for families that meet the income requirements, which could ease the financial burden of providing health insurance during the epidemic.

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