Health Insurance Options During Furloughs and Layoffs

WRITTEN BY: Craig Sturgill


In today’s unpredictable economic landscape, furloughs and layoffs have become increasingly common. These situations impact our financial stability and raise concerns about health insurance coverage. Understanding your health insurance options during furloughs and layoffs is crucial for safeguarding your well-being. In this comprehensive guide, we will explore the differences between furloughs and layoffs, investigate how health insurance is affected in both scenarios and provide valuable insights into alternative health insurance options.

What’s the difference between a furlough and a layoff

While they may seem similar at first glance, these words carry distinct implications for employees and employers. To make informed decisions about your job and its associated benefits, it’s crucial to understand the fundamental difference between a furlough and a layoff. This section will shed light on the nuances that set these employment statuses apart and why those distinctions matter.


  1. Temporary in nature
  2. Intention to return to the same position
  3. Benefits for both employers and employees


  1. Permanent in nature
  2. Typically, due to financial reasons
  3. Impact on health insurance and other benefits

Understanding these differences is fundamental as they dictate how health insurance is managed during these challenging times.

How is health insurance affected during furloughs and layoffs

We’ll review the health insurance dynamics, shedding light on how furloughs and layoffs can shape the landscape of your coverage. Understanding these nuances is vital in safeguarding your well-being during professional disruption.

Health insurance during furloughs

During a furlough, employers generally continue to provide health insurance coverage. Here’s what you need to know:

  • Possibility of maintaining coverage: Employers aim to retain health benefits during furloughs.
  • Employee contributions during furlough: You may still be required to pay your share of premiums during the furlough period.
  • Applying for unemployment benefits: Furloughed employees are often eligible for unemployment benefits, which can help offset the financial burden.

Health insurance during layoffs

In the case of layoffs, the situation is different:

  • Termination of employer benefits: Benefits usually end with your job, and you must find alternative coverage.
  • COBRA coverage as an option: You can opt for COBRA continuation coverage, albeit at your own cost.
  • Eligibility criteria for COBRA: Understand the criteria for COBRA eligibility, including the timeframe for enrollment.
  • Exploring alternative health insurance plans: Consider alternative health insurance options to make an informed choice.

Tips for individuals on furlough to retain health benefits

If you are furloughed, here are some practical tips to help you maintain health benefits:

  • Applying for furlough benefits: Ensure you apply for any available benefits, such as unemployment insurance.
  • Evaluating financial situation: Assess your financial status and create a budget that accounts for health insurance premiums.
  • Consider drawing from retirement funds: In dire situations, you may need to tap into retirement accounts, but do so wisely.
  • Exploring other job opportunities: Look for part-time or temporary job opportunities within your industry to bridge the gap.

Alternative Health Insurance Options

In challenging times, alternative health insurance options can provide a safety net. Consider these options:

  • Temporary health insurance or short-term medical insurance: These plans offer flexibility and can fill the coverage gap while you explore more permanent solutions.
  • Affordable Care Act (ACA) plans: If you’ve lost your job, you may qualify for a special enrollment period to sign up for ACA plans. These plans come with income-based subsidies.
  • Medicaid eligibility: If your income is low, you may qualify for Medicaid, especially if you anticipate a more extended period of unemployment.
  • Spouse or parent’s health plan: Adding to a spouse or parent’s employer-provided plan can be more cost-effective than individual coverage.
  • Limited benefit medical insurance: These plans reduce out-of-pocket expenses and provide fixed payments for various medical services.
  • Faith-based plans and Christian sharing ministries: Explore these options if they align with your beliefs and financial situation.

Your health should remain a top priority in times of furloughs and layoffs. Navigating the complexities of health insurance can be challenging, but armed with knowledge, you can make informed decisions. Whether considering COBRA, temporary health insurance, or ACA plans, remember that your health and well-being are worth the effort. Evaluate your options, seek professional advice if needed, and make choices that best protect you and your loved ones during these uncertain times.


What happens to insurance when you get laid off?

If you find yourself unemployed, it’s important to know that you have a legal entitlement to maintain your previous employer’s health insurance plan under the provisions of the Consolidated Omnibus Budget Reconciliation Act, commonly referred to as COBRA. This continuation of coverage isn’t limited to just you; it extends to your spouse, former spouse, and any dependent children.

How long does your health insurance last after being laid off?

COBRA coverage allows you to maintain your employer-based health insurance for a limited period following the termination of your job, typically spanning up to 18 months. During this period, you are generally responsible for covering the entire premium cost and a minor administrative fee. To gain insight into the specific COBRA alternatives available to you, it’s advisable to get in touch with your employer.

What is the difference between a furlough and a layoff?

A furlough enables employees to retain their positions during a transitional period, while a layoff entails terminating an employee’s contract due to business-related circumstances.

Find health insurance during a furlough or layoff

Going through a layoff or furlough is stressful; don’t take on the added worry of deciphering health insurance options alone. Call us or fill out our online rate form to compare the plans and insurance providers available. We can even connect you with a licensed health insurance agent who has the tools to compare multiple options quickly and help assist you with protecting yourself and your family.

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