The COVID-19 crisis has caused a huge amount of tragedy and disruption. For those recently laid off, no longer having employer benefits and insurance can be a significant challenge. Figuring out what government support you are eligible for and purchasing your own insurance can be overwhelming and confusing. At IndyHub, we help you make the best decision for you. If you want personal advice or want help applicating for one of the below, you can set up a free appointment with an IndyHub licensed advisor. 

 

If you’ve just been laid off, or are not working at the moment, there are four key considerations:

Health Insurance

Health insurance is a critical concern for all of us, especially in these times. If you’ve been laid off, you have two options: COBRA or individual health insurance plans. Below we provide an overview of both.

 

Overall recommendation:

  • Pick one - if you do not select one in within 60 days of losing your employer's insurance, you will not be able to get insurance until you get a new job, or late November (during a period called open enrollment). If you select COBRA you will not be able to switch to an individual plan until open enrollment. If you get a job with health insurance, you can switch back to your employer's plan 

  • Overall, an individual plan is likely better if you:

    • do not mind who your primary doctor 

    • want to reduce monthly premium payments, or cannot afford the COBRA premiums

    • are eligible for tax credits or state subsidies

    • think it may be a while before you get employer coverage again

Individual plan

 

You can purchase an individual plan within 60 days of losing your employer's cover. There is a huge amount of choice out there, as state exchanges include a variety of cost and quality plans. Each must include a minimum amount of cover, and provide free cover for a variety of preventative healthcare. Plans with more affordable monthly premiums usually have a high deductible, which is the amount you need to pay before insurance kicks in. So it may be better to pay more per month for a silver, gold, or platinum plan if you have frequent health costs.

Many people are eligible for tax credits or free health insurance through the government. If you earn under $75k a year you are likely eligible for some tax credit, but the income thresholds vary across states. The easiest way to check how much you qualify for is using this calculator (NY and CA, will need to use these links).​

COBRA

COBRA is a government-administered program which lets you continue being on your employer’s health insurance plan but at your own expense. It also covers your spouse and any dependent children on your health plan if they were on your employer's insurance​​​. You must apply within 60 days of receiving a COBRA election form or the day you lost cover. COBRA will provide insurance for a maximum of 18 to 36 months, after which you’ll need to purchase your own health insurance 

It tends to be more expensive than an individual plan, especially as tax credits won’t be applied if you’re eligible. Tax credits vary by state but are typically available for people earning under $75k a year.

Key differences between individual health insurance and COBRA

Unemployment Insurance

If you’ve been laid off you’ll likely be eligible for unemployment insurance, which has recently been increased in response to the COVID-19 crisis, and will now be over $1,000 a week for most workers.

 

Our recommendation: make an application now. Most states have increased their eligibility and weekly support. The application tends to be online, so it shouldn’t take too long, and given the current number of applications, best to get it in asap.

Eligibility - you're eligible if you:

  • are unemployed ‘due to no fault of your own’ 

  • have earned sufficient wages to make a claim - if you have had a full or part-time job you are almost certainly eligible

  • are physically able, available and actively seeking work

  • register for work with your resident state's job service office

 

In response to COVID-19 the Federal government has also allowed states to offer unemployment benefits to a worker if:

  • an employer temporarily ceases operations due to COVID-19

  • they are quarantined but expect to return to the job after the quarantine ends

  • they leave a job because of the risk of exposure or infection or to care for a family member.

  • they are self-employed or independent contractors

How to apply

The process differs by state, you can find out your state process here. It normally follows the below steps:

  • Fill an application form - including your payslips and employment history for the last 18 months

  • Show you are seeking work - each week you'll be asked to submit a simple form showing you've applied for work with at least three potential employers. You should continue to submit weekly certificates even when your application is pending 

  • Report your earnings - you can work and earn 20% of your weekly unemployment benefit amount without penalty. Earnings over this amount are deducted from your weekly benefits

Tax

 

Unemployment insurance is taxable income and must be reported on your IRS federal income tax return. When you apply you can elect to withhold income tax during the year with 10% being the maximum generally allowed. We'd recommend withholding tax, as otherwise, you'll have to personally figure out, and pay it, later on. 

 

Your local state unemployment agency will send you a 1099-G form to file with your tax return. This form is sent in late January and outlines the amount of benefits paid to you during the previous year. ​

Support provided

 

Unemployment benefit varies by state but it is typically $300 - 600 a week. See details for your state here. The amount you receive will depend on how much you have earned in the last 18 months. Under the Covid-19 support (CARES act) the federal government now pays out an extra $600 / week in addition to any state support. This runs until the 25th July (full details here).

Disability Insurance

5 states and Puerto Rico have state disability programs: California, New Jersey, New York, Rhode Island, Hawaii, and Puerto Rico.

The programs are meant to partially replace wages for workers who are very ill, injured off the job, and unable to work. If you are applying for both unemployment and disability insurance you should mention this in your applications to ensure your state allows you to receive money from both programs.

Our recommendation: If you are currently ill or are caring for a family member and unable to work, you should apply for state disability funding.​

 

Eligibility:

  • You live in California, New Jersey, New York, Rhode Island, Hawaii, or Puerto Rico

  • You are currently ill and have contributed to the fund in the form of wages taken out of a paycheck for a certain amount of time. If you’ve had a full or part-time job you probably have been contributing

  • You are caring for a spouse, registered domestic partnership, child, parent or other immediate family members

  • If you are not in a state covered, you can purchase privately disability cover that covers a percentage of your average income if you are ill or unable to work in the future

 

​How to apply

Support provided

  • California: $50-$1,129 / week 52 weeks for disability, 6 weeks for paid family leave

  • New Jersey: Up to $615 / week for 26 weeks for disability leave; 42 days for family leave

  • New York: $20-$170 / week for 26 weeks

  • Rhode Island:  $84-$795 / week for 30 weeks

  • Hawaii: $14-$570 / week for 26 weeks

  • Puerto Rico: $12-$113 / week for 26 weeks

Additional Government Support

The Government has a complex array of additional benefits and support programs. If you are disabled, a military veteran, from a vulnerable group, or think you are eligible for additional support the easiest way to find out s to complete the benefits.gov questionnaire.

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If you want further advice, or have any questions don't hesitate to contact our advisers at myadviser@theindyhub.com or schedule a free appointment with a licensed IndyHub advisor.