Orlando Harmon
Losing your job is stressful, and the resulting loss of health benefits can be a huge blow. However, there are several options for continuing your health coverage while unemployed. Depending on your location, you may be eligible for Medicaid, or you can purchase a private plan. Losing employer-sponsored health insurance counts as a qualifying event, which gives you a special enrollment period of 60 days to purchase a new plan. You can also continue your existing coverage under COBRA, which allows you to stay on your employer's plan for 18-36 months, although this can be expensive. Alternatively, you can enroll in a plan through the Affordable Care Act (ACA) Marketplace, which often offers more affordable plans, especially if you qualify for tax credits and cost-sharing.
| Characteristics | Values |
|---|---|
| Losing employer-sponsored insurance | Counts as a qualifying event |
| Special enrollment period | 60 days from the date the old policy ended |
| Medicaid | Available in some states |
| Medicaid enrollment | Open all year |
| Eligibility for Medicaid | Qualified families with low income, pregnant women, children, and other eligible people |
| Eligibility varies by | State |
| Short-term health insurance plans | Not regulated by ACA |
| Marketplace plans | More affordable |
| COBRA | Continue with the same health insurance plan |
| All-in-one Medicare Advantage plan | Medical and hospital coverage |
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What You'll Learn
You can apply for Medicaid if you're eligible
If you've been laid off and are now without an income, you may be eligible for Medicaid. Medicaid provides free or low-cost medical benefits to eligible individuals and families with low incomes. Eligibility depends on a combination of income, household size, and family circumstances.
Medicaid is available in most states, and in 40 states, coverage is offered if your household income is up to 138% of the federal poverty level. If you are in a state that hasn't expanded Medicaid, you may still be able to enroll in a subsidized health insurance plan through the Marketplace if your income is below the poverty level. You can also look into the Children's Health Insurance Program (CHIP), which offers medical and dental care for children and teens up to the age of 19.
To apply for Medicaid, you must be a resident of the state in which you are applying for benefits. You can create an account with the Health Insurance Marketplace and fill out an application to see if you qualify. If you do, your information will be sent to your state agency, and they will contact you about enrollment. You may also need to provide certain information or documentation, such as proof of income, and some states may have additional requirements. For example, in Virginia, you can apply online at commonhelp.virginia.gov, or by calling the Cover Virginia Call Center.
It's important to note that not all medical providers accept Medicaid, so be sure to check with your state's Medicaid agency to find a provider in your area.
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You can apply for a private health plan
If you are laid off and lose your employer-sponsored health insurance, you can apply for a private health plan. Losing your employer-sponsored insurance because you were laid off counts as a qualifying event, which gives you a special enrollment period that continues for 60 days from the date your old policy ended.
If you are in one of the 40 states that have expanded Medicaid as of 2025, you can get coverage if your household income is up to 138% of the federal poverty level. If your income is higher, you can still get Marketplace premium subsidies, which ensure that enrollees do not pay more than 8.5% of their income for the benchmark plan.
If you are in a state that hasn't expanded Medicaid and your projected household income for the year is below the poverty level, you can enroll in a subsidized health insurance plan through the Marketplace if you find a job that puts your income at or above the poverty level. This is an option if your new job does not come with health insurance and you need to purchase your own coverage.
If you are unable to afford an ACA-qualified plan while you are between jobs, and you are not in a state where Medicaid is available, you may need to consider a short-term health insurance plan. However, these plans are not regulated by the ACA, so they still use medical underwriting, don't cover pre-existing conditions, impose caps on benefits, and don't have to cover preventive care. As of September 2024, new short-term health plans cannot last for more than four months, including renewals.
If you are aged 65 or over, you can opt for Medicare. You can join Medicare starting three months before your 65th birthday and up to three months after. You can apply online, by phone, or in person at your local Social Security office.
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You can sign up for COBRA continuation coverage
If you've lost your job, you can sign up for COBRA continuation coverage, which lets you use your employer-sponsored health insurance after a job loss. This is an option if you were already enrolled in an employer-sponsored medical, dental, or vision plan. Your company must also have 20 or more employees.
COBRA, or the Consolidated Omnibus Budget Reconciliation Act, provides a way for workers and their families to maintain their employer-provided health insurance during situations such as job loss or a reduction in hours worked. Generally, your coverage under COBRA will be the same as when you were an employee, which is helpful if you want to continue seeing the same doctors and receiving the same health plan benefits. Your dependents (i.e., spouse, former spouse, or children) are also eligible for COBRA coverage, even if you, the former employee, do not sign up.
You usually have 60 days after losing your coverage to join COBRA. It's important to note that COBRA can be expensive. The plan may require you to pay the entire group rate premium out of pocket, plus a 2% administrative fee. Some employers may subsidize these costs for a period of time. You can also use a health savings account (HSA), health reimbursement arrangement (HRA), or individual retirement account (IRA) funds to pay your premiums.
If you're considering COBRA, check your benefits information or speak with your employer's benefits administrator to learn more about how it works. It's important to understand the costs and coverage options before making a decision about your health insurance.
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You can apply for a short-term health insurance plan
If you've been laid off, you may be eligible for a short-term health insurance plan. This option is ideal if you're younger, in good health, and don't anticipate needing frequent medical care. Short-term health insurance plans are typically available for up to four months, including renewals, and cannot be used as a long-term solution. They are not regulated by the Affordable Care Act (ACA) and may have limitations in coverage.
When considering a short-term health insurance plan, it's important to carefully review the terms and conditions. These plans often have limited benefits and can be expensive. They may not cover pre-existing conditions, impose caps on benefits, or include preventive care. However, they can provide a quick solution to fill gaps in coverage until you find a more permanent option.
To apply for a short-term health insurance plan, you can research and compare different plans offered by insurance providers in your area. Websites like HealthCare.gov and Health Insurance Marketplace can be great resources to find and compare plans. You can also consider meeting with a licensed insurance broker, who can guide you through the process and help you find a plan that fits your needs and budget. Their services are often free of charge.
When choosing a short-term health insurance plan, be sure to read the fine print and understand the coverage limitations. Pay close attention to the benefits included, any exclusions or limitations, and the cost of coverage. Additionally, consider your own health needs and financial situation to make an informed decision.
Remember, short-term health insurance plans are meant to be temporary solutions. If you find yourself in need of more comprehensive and long-term coverage, you may want to explore other options, such as enrolling in a plan through the ACA Marketplace or purchasing a private health plan.
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You can apply for a Marketplace plan
If you've been laid off and are looking for health insurance, you can apply for a Marketplace plan. The Health Insurance Marketplace is for people who don't have health insurance. You can apply for Marketplace coverage within 60 days of losing your job-based coverage, and your new coverage can start the first day of the month after you lost your previous insurance.
To be eligible to enroll in Marketplace coverage, you must live in the United States, be a U.S. citizen or national, or be lawfully present in the country, and not be incarcerated. You can apply online, by phone, or in person at your local Social Security office.
The amount you pay for a Marketplace plan is based on your estimated income for everyone in your tax household for the full calendar year. You can use the Premium Tax Credit Change Estimator to estimate the effect of changes in your circumstances on the amount of the premium tax credit you can claim. If you choose to have advance payments of the premium tax credit, you must complete Form 8962 and file a federal income tax return.
If you get coverage through the Marketplace and then get a new job that provides health insurance benefits, you can cancel your Marketplace plan at any time without penalty and switch to your employer's plan once you're eligible for coverage.
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Frequently asked questions
You have a few options for health insurance after being laid off. You can enroll in a plan through the Affordable Care Act (ACA) Marketplace, sign up for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA), or opt for short-term medical insurance.
The Consolidated Omnibus Budget Reconciliation Act, or COBRA, is a type of health coverage that allows you to stay on your employer's plan for 18-36 months after losing health benefits. COBRA is only available if you already had health insurance sponsored by your employer, and if your employer has 20 or more employees.
The Affordable Care Act, also known as Obamacare, established a health insurance marketplace available through Healthcare.gov. This allows individuals to browse and select a new health insurance option based on location and the type of coverage needed.
Short-term health insurance plans are not regulated by the ACA, so they use medical underwriting, don't cover pre-existing conditions, and impose caps on benefits. These plans are available in most states as a stop-gap measure but cannot be used as a long-term solution.
