Losing your job can be a stressful and confusing experience, and facing the possibility of losing your health insurance coverage can make it even harder. Some employers will allow you to keep your coverage until the end of the month, but others will remove you from your plan on the same day your employment ends.
However, most workers can continue their health insurance coverage by paying the full premiums. The experienced employment lawyers at Joseph & Norinsberg can help you review your options and get the best coverage for your financial situation.
Is There a Grace Period for Health Insurance After Termination?
Employers are not required to keep providing health insurance benefits after you’ve been terminated, but many will allow you to keep your coverage through the end of the month, giving you up to 30 extra days. If you are leaving your job, make sure to review or ask about your company’s policies to see how it handles health insurance for departing employees.
Regardless, you will have 60 days to decide whether to continue your current health care coverage through the federal Consolidated Omnibus Reconciliation Act of 1986, commonly known as COBRA.
What Is COBRA and How Does it Work?
COBRA requires all employers with 20 or more employees to offer workers who would otherwise lose their health insurance an opportunity to temporarily extend coverage under their existing plan. Within 14 days of being notified that an employee is eligible for COBRA, plans must inform employees of their rights to continued coverage and how to proceed.
Workers have 60 days to decide whether to use COBRA after losing coverage or receiving notice of their eligibility, whichever is latest. If you decide not to use COBRA coverage, you still have the option to change your mind within those 60 days.
COBRA allows you to keep the same level of coverage for 18 to 36 months, depending on the circumstances of your eligibility. However, COBRA continuation coverage can be much more expensive. Your employer might include contributions toward your health insurance costs in a severance agreement, but otherwise, you must pay the full premium through COBRA without any subsidies you previously received.
Many states have laws that extend COBRA to employers with less than 20 employees. For instance, New York requires smaller employers to provide the equivalent of COBRA benefits.
What if My Employer Doesn’t Offer Health Insurance After Termination?
If your health insurance will immediately end on termination, you can elect to receive COBRA continuation coverage or the state-based equivalent if your employer is not large enough for COBRA.
You may be able to join your spouse’s employer-sponsored health care plan if available. However, most companies do not offer subsidies to their employees’ family members, so the cost of your spouse’s plan could skyrocket.
If electing COBRA coverage or joining a spouse’s plan is too expensive, getting a plan through the Health Insurance Marketplace may be your best option.
What is a Health Insurance Marketplace Plan?
The Health Insurance Marketplace is a health insurance exchange established by the federal government under the Affordable Care Act. You can purchase a private insurance plan through the marketplace. Depending on your income, you might qualify for subsidies, lower costs, or even free coverage through Medicaid.
After losing employer-sponsored coverage, you will be eligible for a 60-day special enrollment period to sign up for coverage through the marketplace. To find a plan or get more information, visit Healthcare.gov.
What Do I Need to Do to Stay Covered?
Whether you choose COBRA continuation coverage or get a plan through the marketplace instead, it’s important to start as soon as possible. If you don’t elect COBRA coverage within the 60-day eligibility period, you’ll lose the option to continue your existing health care plan while you look for a new job.
The Health Insurance Marketplace is also only available for a short period. If you miss the enrollment window after losing your coverage, you must wait until the annual open enrollment period begins in November to get a new plan.
How State Laws Impact Health Insurance Coverage after Termination
COBRA does not apply to employers with fewer than 20 employees, but under New York law, smaller companies are still required to provide up to 36 months of continuation coverage akin to COBRA benefits. The state also offers its own health insurance marketplace with public and private plans.
The New York Department of Financial Services handles appeals when insurers deny coverage for health care services. It also reviews any premium increases proposed by insurers and requires manufacturers to report price increases for prescription drugs at least 60 days in advance.
How an Employment Lawyer Can Help with Health Insurance Coverage Issues After Termination
A knowledgeable employment law attorney can help you obtain COBRA continuation coverage or sign up for a marketplace health insurance plan. If your employer refuses to provide COBRA coverage or fails to properly notify you of your eligibility, your attorney can help you file a claim and defend your rights.
If you’re still awaiting termination, your lawyer can also help you negotiate a better severance package, including extra compensation to help cover your health care coverage costs.
Contact Joseph & Norinsberg For Your Employment Law Cases
The dedicated employment law team at Joseph & Norinsberg has more than 75 years of combined experience defending workers’ rights—and we’re ready to fight relentlessly for you.
Contact us online or call 212-227-5700 today for a free consultation.
