The truth is there isn't really a fixed time to these things. Generally, the premiums for insurance policies are paid by the employer at the beginning of each month. So when you are laid off early in the month, the policy still covers you through that month, but when you are laid off later in the month, there might not be a lot of time for the insurance policy to be useful.
Some companies chose to stop the health insurance of terminated employees immediately while others can go as far as several months before eventually stopping the pay. This is why it is important to find a company that has really good benefits before accepting an employment.
Nevertheless, ideally a company should allow terminated employees access to their health insurance plan for at least a period of 18 months through the COBRA program.
What is COBRA?
The Consolidated Omnibus Budget Relocation Act requires that private businesses with at least 20 staff members provide their former staff members with the COBRA benefits, with the exception that the employee is being laid off for "gross misconduct". This means that former employees can continue with the health insurance policy they had as employment benefits, but this time at their own cost.
How Long Does COBRA Last?
The least time that a former employee can have access to the COBRA program is 18 months. Although, it can also vary based on the health situation of the former employee. For example, someone who is completely disabled may use it for up to 29 months, and some may even have access for as long as 36 months.
How Much Does COBRA cost?
People with the COBRA program can pay as much as 102% of the health plan without the help of their former employers. While as an employee, individuals get to split their health insurance bill with their company paying the largest percentage, these former employees now have to pay for the policy in full with an additional administrative fee of 2%.
How soon Can I Get the COBRA plan?
Once terminated, you start receiving the benefits of this program immediately. There is a 60 day window to decide whether to take it or not. The COBRA program can also be cancelled at any time and is only valid for as long as premium is being paid.
There are other ways to maintain an health insurance policy that can be cheap but also functional and serving immediate purposes, such as Individual health Insurance, Medicaid or other short-term health plans.
WHAT HAPPENS IF I DON'T HAVE HEALTH INSURANCE?
The affordable Care Act (ACA) requires you to have a health insurance plan. When this act was effected, it required people without a health insurance plan to pay a fine. As of 2019, that fine policy is no longer used but depending on the state you reside in, you could be asked to pay a certain amount of money in fines if it's discovered that you don't have health insurance during your state tax filing. Outside of this, there are also certain major risks involved in not having a health insurance plan such as;
- Absence of medical care.
- Medical debt which may lead to bad credit or bankruptcy.
- Taco penalty, in the case of a family.
Getting terminated on a job is exhausting enough, but losing health insurance is an added burden that need not be. Healthcare, with or without insurance can be expensive, but without it, you are at an even bigger disadvantage.