Lost Your Job?

Follow these steps to ensure you don't lose your health insurance and other important benefits, too.

Losing your job can be a shock. But keeping your head and following a few simple steps will help ensure you get as much value from work benefits as you deserve. Most importantly, it may also help you keep your health insurance after employer-sponsored coverage ends.

Even though you may think that your new job search should take priority, be sure to address all benefits-related issues before leaving work for the last time. Considering that just one medical crisis in the family can wipe out your savings if you are uninsured, even a short lapse in health coverage may be risky.

This Action Plan is intended to help you handle a challenging time - and hopefully avoid a few missteps along the way. Please be aware that this is an overview, not a comprehensive blueprint covering every situation.

Loss of a Job Takeaway Information:

  • First Steps
  • Next Steps
  • Action Plan

1. Determine which benefits can go with you:

  • Health and Dental Insurance
  • Health Flexible Spending Accounts (FSA)
  • Life and Disability Insurance
  • Pension or 401(k)
  • Cash Balance Plan
  • Profit Sharing or Stock Bonus Plans.

2. Ask key questions before leaving:
  • Can you continue health insurance at group rates?
  • Will your former employer still contribute to premiums?
  • Can you use accrued PTO to extend paid benefits?
  • How do you activate COBRA (continuation of health coverage) and how much does it cost?
  • Are you eligible for a severance package offering:
  • Health care coverage
  • Job placement services
3. Get documentation
  • You'll need to get proof of insurance from your employer and/or insurance company (this is known as a certificate of creditable coverage)
1. Solve health coverage issues:
  • Find out when your current policy ends, to avoid gaps in coverage
  • If continuing existing plan, find out when/how payments should be made
  • Determine if coverage is available from a working spouse's employer
  • Secure new health insurance in under 63 days to avoid a gap in coverage. A life-changing event means you have a window of time when you can enroll in a plan through the Affordable Care Act (ACA) Health Insurance Marketplace. If you miss this special election period, you may have to wait for the ACA annual enrollment period.
2. Finish Up - Create security for your job search:
  • File an unemployment claim online, or in person
  • Create a budget and spending plan reflecting reduced income
  • Review automatic investment contributions

Action Plan

While the information above suggests actions to take, you may find you need some details to actually carry them out. You'll find them here, along with helpful links, phone numbers or places to go for more information.

Negotiating Your Severance Package:

  • Check your employee handbook to find out which benefits you can take with you.
  • Carefully review your severance package before signing. Don't assume everything is set in stone. Your employer may be willing to negotiate and increase the value of your package. You may want to consult an attorney.
  • Consult your HR or benefits department for information on replacement coverage options, including COBRA, spouse's family coverage, Medicare, individual or family insurance through the Affordable Care Act's Health Insurance Marketplace exchanges, and state-based children's health plans for dependents.
Making Decisions About Health Insurance:
1. It is important that you fully understand your coverage options before deciding which is best for you. Many options may be available, including:
  • Spouse's family coverage
  • Medicare
  • Health insurance through the Health Insurance Marketplace exchange
  • State-based children's health plan (for dependent children)
2. To choose the best option for you, consider the following:
  • Which option(s) offer adequate and affordable coverage for my dependents?
  • What are the total costs of coverage, not just the premiums? Consider out-of-pocket expenses such as co-pays, deductibles, and seeing out-of-network providers.
  • What are the prescription costs and benefits under each plan option, especially if you, or covered dependents, have pre-existing or chronic health conditions?
  • You may qualify for a subsidy to help pay your premiums for plans on the Health Insurance Marketplace exchange.

This federally-mandated program allows you to stay on your former company's health plan for 18 months after being terminated. Your coverage will not change, but your premiums will increase significantly since your employer will no longer be contributing to their cost. COBRA is available to all covered employees and dependents that were covered by the company's plan at the time of termination.
For more information, consult your HR or benefits department.

Spouse's health plan

If your spouse has the option of family coverage from his/her employer, consider enrolling yourself and any dependents currently covered by your plan. This may be more affordable than COBRA, and you should be able to get coverage fairly quickly
For more information, consult your spouse's HR or benefits department.


If you're eligible, Medicare offers affordable, comprehensive medical and prescription drug coverage. Medicare coverage begins at age 65, but you can begin the enrollment process 3 months before your 65th birthday.  The enrollment window remains open through the month of your 65th birthday and for an additional 3 months after your 65th birthday.  If you have a qualifying disability, you may be able to enroll earlier.

Health Insurance Marketplace

You may want to consider a new plan from a private health insurer. You may find coverage that better meets your needs and budget by shopping and comparing plans on the Health Insurance Marketplace exchange. Financial help may be available based on your income. Insurers -- whether offering plans on these exchanges, on private exchanges or directly to individuals -- can't deny you coverage or charge you more because of pre-existing conditions. They also cannot drop your coverage if you get sick.

State-based children's health programs

Most states offer coverage for uninsured children under age 18.
For more information, contact your state's Department of Insurance.

Medication costs

Consider whether your ability to cover prescription costs is threatened by your reduced income. If so, subsidies may be available from the manufacturer of your medication. Savings and discounts programs from a variety of sources are available.

Increasing Financial Security During Your Job Search:

  • Determine what level of spending you can afford, then list all expenses in two columns: required and discretionary - and be realistic when making these lists. Remember, gas is required to get to interviews and the grocery store, but cable TV isn't.
  • Stop spending on anything that's not on your "required" list.
  • Don't stop paying your bills - ask creditors if they offer grace periods that allow you to defer payments or provide any other ways of keeping current.
  • Stop automatic investments for the time being - you can (and should) restart them when you have more income.
  • Check how part-time work will impact unemployment benefits before accepting low-paying, low hour jobs.
  • Get extra Help - If you aren't able to meet your expenses, don't let your debt level spiral without exhausting all potential sources of income. Check with state and religious organizations. Many offer short-term financial help for the financially challenged.