Monday, August 15, 2022

Do Furloughed Employees Get Health Insurance

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How Do You Know If Your Insurance Is Still Active

VERIFY: Furloughed employees qualify for unemployment benefits

In order to tell if your health insurance is still active, you should contact your health insurance provider. You can typically find the customer service phone number for your health insurance provider on the back of your insurance card, on your periodic billing statement or on your policy paperwork.

What Is A Furlough

Traditionally, a furlough was considered a leave of absence, usually granted to someone serving in the military or on a missionary assignment. In the employment context, employers often use the term for what is essentially a temporary layoff or reduction in employee work hours.

When a furlough involves reduced hours , some employers allow their employees to customize the arrangement. For example, an employer might require workers to take a total of four days off per month but allow them to choose the timing of those days.

How To Keep Your Insurance Benefits When You Quit Or Get Fired From Your Job

Losing or leaving your job doesnt mean you have to lose your insurance coverage right away.If you leave your employerwhether voluntarily or involuntarilyyoull need to take steps to stay covered by your insurer. When you have a chronic condition such as diabetes, heart disease, or cancer, it is crucial that you avoid any breaks in coverage that could trigger a preexisting-condition exclusion. This could make all the difference in your ability to continue using the same doctors, especially if you are in the middle of receiving important treatment. In the flurry of excitement around changing jobsespecially if youre being laid offyour mind may be on other things besides health insurance, says Helen Dumski, vice president and chief operating officer of the Diabetes Association of Greater Cleveland, who counsels patients on health insurance issues. Many people dont pay enough attention to the preexisting-condition exclusions. Its very important to be on the lookout for that.

Heres what to considerbefore you leave your jobto make the best choices for you and your family.

Get Your Insurance Company to Pay for a Denied Claim

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Spouse Or Parents Health Plan

If your spouse receives health insurance through their employer or if you are under age 26 and a parent has employer health coverage, you could be added to their plan for a lower rate than buying health insurance on your own. Ask them to check with their human resources department to see what is available to you and what cost estimates might look like.

Limited Benefit Medical Insurance

Do Furloughed Employees Have Health Insurance

Limited medical insurance, also known as fixed indemnity insurance or fixed dollar, zero deductible plans, provides an alternative to traditional health insurance by lowering out-of-pocket expenses. There are typically no insurance deductibles or coinsurance limits to meet. Instead, the plans have specific cash payments for both sickness and accidental injuries regardless of other coverages. No specialist referrals are required and benefits do not vary in- or out-of-network providers. Heres an example of how they work.

Jim is a chef and owns a small downtown cafe. Since he is self-employed and has to purchase his own health insurance, he has a limited medical insurance plan to help reduce the blow of any sudden medical expenses he wasnt expecting. Its more affordable than an ACA plan and Jim feels confident that he wont get sick and need hospitalization.

One morning, Jim slices his finger pretty badly. Hes cut himself before and can tell this is the worst cut hes ever had. So Jim wraps his finger up and heads to an in-network Urgent Care. Sure enough, he needs stitches. He knows he will have to pay for some of the visit but the overall cost for going to Urgent Care with his fixed indemnity plan will be less than if he was uninsured.

While limited benefit health insurance does not cover all medical expenses, it does provide insureds reduced rate pricing and a set dollar amount for common medical expenses like doctor visits and hospital stays.

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What Is The Difference Between Being Furloughed And Being Laid Off

In general, furloughed workers remain employees of their company, they just face a mandatory suspension from work without being paid.

At the end of the furlough, the workers will resume their jobs, they usually start back at the same position, and the same income they had before the suspension. Furloughs allow companies to avoid layoff costs and give them the chance to start where they left off before the shutdown.

On the other hand, those who have been laid off, may get some severance pay, but otherwise will no longer receive income from their employer.

“A furlough is not a separation of employment. They are still actively employed so it’s usually a shorter period of time, like two weeks or four weeks and typically employees would retain their benefits,” labor and employment attorney David Barron and member of Houston firm Cozen O’Connor, told Newsweek.

What Is The Law On Employers Providing Health Insurance

The Employer Mandate for Large Employers

Employers can require that employees contribute toward their insurance coverage, but they cant require them to pay more than 9.86% of their household income toward it. Large employers who fail to comply with the coverage mandate must pay a no-coverage penalty to the IRS.

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Are There Other Government Plans I May Qualify For

Yes. Government programs include:

Medicaid. You can get insurance through Medicaid if you have a low income, youre pregnant or youre disabled. The rules vary by state.

To find out if you qualify and how to apply for Medicaid in your state, visit the insurance and coverage finder on the federal governments web site, HealthCare.gov. You can also visit the Medicaid web site at Medicaid.gov.

CHIP. CHIP stands for Childrens Health Insurance Program. Your kids can get insurance through CHIP if your income qualifies. Its meant for families that cant afford private health insurance but make too much money to get Medicaid. Whether youre eligible and how much you pay depends on the state you live in.

To find out about childrens coverage programs in your state, visit the insurance and coverage finder on HealthCare.gov. You can also get more information on the federal government web site called InsureKidsNow.gov.

Medicare. If youre age 65 or older or are disabled, you may be eligible for coverage from Medicare, the government health program for seniors and people with disabilities.

To find out if you qualify for Medicare, visit Medicare.gov. You can also use the governments Medicare Plan Finder to get cost estimates and coverage information and get information on private Medicare plans, called Medicare Advantage plans.

Robert Wood Johnson Foundation: State-Level Trends in Employer-Sponsored Health Insurance: A State-by-State Analysis.

Does Cobra Apply To Dental Coverage

SSM Health is putting 2,000 employees on furlough

You can usually hang on to your insurance for 18 months after losing your job, as long as you werent fired for serious misconduct. If youre covered by the Consolidated Omnibus Budget Reconciliation Act or COBRA you stay insured by paying both the employee and employer share of the premiums. Your employer can offer you a longer coverage period in your severance package if he chooses.

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Can You Keep Your Health Insurance During Furlough

The COVID-19 pandemic has resulted in millions of people across various industries getting laid off or furloughed. According to the United States Board of Labor and Statistics, 13.6 million Americans were unemployed as of August 2020, including employees who have been laid off or placed on furlough.

13.6 million Americans were unemployed as of August 2020, according to the U.S. Board of Labor and Statistics.

Losing a job often comes with a change in your employee benefits, but what happens if youre on furlough due to COVID-19? Can you keep your health insurance during furlough? This unprecedented time has been the source of much confusion regarding benefits like health insurance coverage.

Keep reading to find out the difference between the permanent termination of employment and furloughs, and how each situation impacts your health benefits.

Public Vs Private Furloughs

A private business might furlough its employees during a short-term or cyclical downturn. Seasonal businesses, for example, may furlough their employees during their slow months. Or a shop owner may do so in between orders, choosing to furlough employees he can’t afford while trying to drum up a new business.

More recently, General Motors furloughed thousands of employees amid a United Auto Workers strike.

In the case of the federal government, furloughs occur when it fails to authorize new spending.

The federal government has an annual appropriations process. This requires Congress to create and pass a budget that authorizes its spending for the next fiscal year . If Congress fails to pass a budget, it fails to fund the agencies which rely on this process. They don’t get the money necessary to pay their employees and, as a result, have to furlough their employees.

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How Cobra Assistance Can Help

During this crisis, the nation needs to help unemployed workers afford the cost of their COBRA coverage if they choose to use it. Rep. Scotts Worker Health Coverage Protection Act would do just that. The legislation features premium assistance that would offset 100% of the cost of coverage for up to 15 months for laid-off workers who have been affected by the coronavirus crisis. For furloughed workers whose employer is still paying for their coverage, the premium assistance will cover their share of the premium. The assistance would continue for six months following the end of the public health emergency. The health plan or employer in charge of the health benefit would be responsible for receiving and administering the premium assistance for workers and their families.

Making coverage affordable and easy to access is a challenge because most people would prefer not to deal with it if they dont have to. In fact, a previous effort to provide COBRA assistance during the Great Recession did not have much impact.6Chairman Scotts Worker Health Coverage Protection Act has two key advantages over the previous effort:

How Long Does A Furlough Last

What Rights Do Furloughed Employees Have?

It depends.

Some companies may regularly furlough their workforce due to the availability of seasonal work, says Michele Evermore, senior researcher and policy analyst at National Employment Law Project. Steelworkers, for example, may be furloughed for a few months every year when construction needs are down.

Katherine Williams, 40, of Waterford, Conn., was furloughed from her job as a fulfillment lead at Macy’s this week. Previously, she spent several years working as a school bus driver. She would often be furloughed during the summer when school wasn’t in session, but she could come to expect re-employment every August.

With her current situation, however, “nobody really knows what’s going to happen,” she tells CNBC Make It.

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Erisa And Federal Income Tax Rules

From the standpoint of federal benefits law, nothing prevents an employer from paying monthly premiums on behalf of furloughed and laid off employees in order to keep coverage in force under a fully insured group health plan. In addition, an employer can choose to pay monthly premiums for one group but not the other. The employer-paid health insurance premium will continue to be excludable from the gross income of the affected workers, because active, inactive and former employees are treated the same under the tax rule that makes available the exclusion of employer-paid premiums from gross income . We understand that insurance carriers are providing the same answer to their employer group customers and are accepting such premium payments and continuing coverage without interruption. But in light of the COBRA issue described below, employers that sponsor fully-insured group health plans should confirm with their brokers or carriers that coverage will continue without the need for a COBRA election as long as the employer continues to pay the premiums. Read More.

For An Eligible Employer Who Sponsors A Health Reimbursement Arrangement A Health Flexible Spending Arrangement Or A Qualified Small Employer Health Reimbursement Arrangement Are Contributions To The Hra Health Fsa Or Qsehra Included In The Qualified Health Plan Expenses

The amount of qualified health plan expenses may include contributions to an HRA , or a health FSA, but does not include contributions to a QSEHRA. To allocate contributions to an HRA or a health FSA, Eligible Employers should use the amount of contributions made on behalf of the particular employee.

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Terminating An Employee Cutting Off Insurance Benefits Can Come Back To Haunt You

This article was published more than 4 years ago. Some information may no longer be current.

Terminating an employee is always difficult, but when it comes to employee benefits, both employees and employers need to do their due diligence to avoid issues in the future.

Employers typically think about issues such as showing due cause or the length of severance packages, and employee benefits arent at the top of the list of considerations. But benefits can often come back to haunt you after employees leave, as they can sue their former employers for big bucks if the proper procedures werent followed. Here are a few tips on making sure youve covered your bases during the termination process.

Make sure you know how long an employee is covered after they leave

Its important to factor benefits coverage into the severance package. This is where you outline the employees notice period the length of time after termination that the employee will remain eligible for benefits which is something many employees, and indeed employers, may not realize.

If your benefits package includes long-term disability coverage, your insurance provider likely wont extend those benefits for a terminated employee, so youll need to set up separate LTD coverage.

Take common-law notice into account: its not always a simple calculation

Protect yourself by having employees sign a waiver

Make sure you accurately describe benefits packages to employees and their dependents

Can Furloughed Workers Do Any Work At All For Their Employer

Tens of thousands of airline workers are facing furloughs and loss of their health insurance

If an employee is furloughed, they can still do work for their employer. If the employees are covered by the Fair Labor Standards Act and are non-exempt their employer must pay them for that work, Sedey said.

Keith Hall, professor of practice at the McCourt School of Public Policy at Georgetown University in Washington, D.C. believes that one of the benefits of the CARES Act is that benefits continue even if you move down to part time, “and if you are very part time, you can get most of your benefits.”

“The idea of using a furlough instead of a layoff is that your employer is trying to keep a connection to the employee, which is a really good thing,” he said.

“The employer is thinking about being able to bring someone back as soon as possible. The catch is of course that the employer does not have to commit to that, but the fact that they are staying in touch like that does mean something.

“It is certainly a good thing for the economy, because one of the big issues in any recession is how quickly employers release employees and how quickly they bring them back,” Hall told Newsweek.

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Can You File For Unemployment If You’re Furloughed

Yes. Workers furloughed due to the pandemic are eligible to receive unemployment insurance, which has dramatically expanded as part of the recently passed Coronavirus Aid, Relief, and Economic Security Act.

“It doesn’t matter whether you’ve been furloughed or laid off, you’ll be eligible for unemployment under the COVID-19 stimulus package,” Evermore says. She adds workers still receiving employer-sponsored benefits during a furlough are still eligible for unemployment insurance.

Under the $2 trillion CARES Act, unemployed workers are eligible to receive their state-administered benefit, based on previous earnings, for up to 39 weeks. They’ll also get an additional $600 per week for up to four months until July 31.

Williams says she’s been able to file for unemployment in Connecticut as of April 1, the first official day Macy’s workers were on furlough. Due to the crush of demand in unemployment claims, she estimates it’ll be another three to four weeks until she receives an unemployment check.

In Miami, Fla., 30-year-old Andres Balzan was furloughed from his job in merchandise support for Macy’s. He began trying to file for unemployment Wednesday morning but found the Florida unemployment site was down.

“I’ve been hearing from other colleagues that the site is terribly slow, or they may get through to the end of the session, and it won’t submit for them,” he adds.

For An Eligible Employer That Sponsors More Than One Plan For Its Employees Or More Than One Plan Covering Different Employees How Are The Qualified Health Plan Expenses For Each Employee Determined

The qualified health plan expenses are determined separately for each plan. Then, for each plan, those expenses are allocated to the employees who participate in that plan. In the case of an employee who participates in more than one plan, the allocated expenses of each plan in which the employee participates are aggregated for that employee.

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Do Wage And Hour Laws Restrict Furloughs

Under federal wage and hour laws, employers may typically cut an employees hours or pay, as long as the employee still receives at least minimum wage for the hours actually worked. So furloughs don’t present wage and hour issues for most employees. However, different rules apply to employees who are exempt from overtime and other wage and hour requirements.

To qualify as exempt, the employee must perform a certain type of work and earn a base salary of at least $684 per week . Employers do not have to pay exempt employees overtime, but they generally cant reduce their weekly pay.

Exempt employees are entitled to their full weekly salaries for any week in which they perform any work. So if an employer instructs an exempt employee to work four days a week instead of five, the employee is still entitled to the same weekly salary. If the employer cuts the employees pay to account for the reduction in hours, it will lose the exemption status for that employee. This can lead to the employer owing large amounts in unpaid overtime, if the employee regularly works more than 40 hours per week.

An employer may be limited in its furlough or layoff decisions by the terms of an employment contract.

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