Job Loss
Employers only offer employment benefits, including heath insurance, to active workers. Retirees may receive health care as part of a pension plan, but those who leave voluntarily before retirement age or are fired generally lose their health insurance right away. Some employers may choose to phase out benefits over a period of time as part of a severance package, but employer’s aren’t obligated to do so unless they’ve signed labor agreements or included it in employment contracts.
COBRA
Most workers who are fired have the option of retaining their health insurance through the Consolidated Omnibus Budget Reconciliation Act, also known as COBRA. This program applies to all employers who have at least 20 employees. It requires them to notify former employees of their option to enroll in COBRA. By enrolling, you can keep your earlier level of coverage for yourself and your family, but you’ll be liable for the full cost of the program. While unaffordable for some workers without incomes, COBRA can give you time to find another solution to your health insurance needs or cover you and your family until you find another job. COBRA benefits last up to 18 months from the date you’re fired.
HIPAA
The Health Insurance Portability and Accountability Act, or HIPAA, is another source of continuing health insurance if you’re fired. HIPAA applies in different ways to everyone, though many people only know about the portion of the law that protects patient privacy. HIPAA also prevents insurance companies from denying coverage to workers whose COBRA coverage has expired or workers that have experienced a lapse in coverage after losing a job. HIPAA makes it easier for you to find health insurance if you’re fired from a job where your pre-existing medical condition was covered by your employer’s group coverage.
Other Options
Besides continuing your coverage through COBRA or going without health insurance altogether, you still have additional options. One is an individual health plan, which will have a rate based on your overall health risk, age and the level of benefits you choose. If you’re young and healthy, an individual health plan with limited coverage and a high deductible can tide you over until you find a new job with health benefits. If you’re unemployed for an extended period of time and experience severe financial hardship, the Medicaid program can supply health care for you and your family. For senior citizens who are fired, Medicare is yet another low-cost option with rates based on income.