When you lose your job, time becomes an enigma. Every moment drags on, but hours can also pass inexplicably. While it’s natural to feel a void or depressed after a layoff, you will have to take some action right away. Specifically, you’re going to have to figure out a new way to maintain health insurance coverage. Not sure how to do that? Read on for some advice to help navigate the process.

When does coverage end?

Before you leave your job, ask the human resources department when your health insurance coverage ends. It may end the day your job terminates, or your coverage may extend through the end of the month or longer. “I wouldn’t expect or plan for an employer-sponsored benefit, but larger businesses with more cash may offer you some discounts on premiums for a time,” said R.J. Weiss, a Certified Financial Planner based in the Chicago area.

If you have a few extra days of coverage, take advantage of it. Booking appointments while you’re still covered may help you save on medical costs later.

Consider your options

Buying your own health insurance after a job loss can feel overwhelming. While some options will be the same as those you’d experience if you were self-employed, others are specific to individuals without work. However, if you compare your options, you can find insurance that works for you.

COBRA may not be best

When you lose your job, your employer will generally offer COBRA to you. COBRA allows you to continue your health insurance benefits after your employment ends. The catch? You have to pay for the full coverage, which is likely quite expensive. Without your former employer footing some of the bills, the rates can be astronomical.

Apply for state insurance programs

For some people, an affordable health insurance option may be a state health insurance program such as Medicaid. Depending on your state’s rules, your household size and your income, you may qualify for free or reduced-cost insurance. 

Don’t just check on Medicaid for yourself. Your children may qualify for free or low-cost insurance through the Children’s Health Insurance Program (CHIP). 

Head to the healthcare marketplace

If you don’t qualify for free options, the next place to look is the health insurance marketplace. Sa El, a licensed health insurance agent and founder of Simply Insurance in Atlanta, recommends immediately looking into the exchange, as you will have a qualifying event of a job loss, and you may also qualify for assistance depending on your financial situation.

The Federal healthcare exchange (or your state’s exchange) allows you to compare the cost of various plans. When you buy the plan through the healthcare exchange, you may qualify for discounts called premium tax credits.  

Look to your family for help (and coverage)

Another good option for coverage is to join a family member’s insurance plan. In general, you need to enroll in a family member’s plan within 30 days of losing your own employer-based coverage. Spouses and children may be allowed to join a family member’s employer-sponsored health insurance plan after a job loss or another qualifying life event.

A spouse isn’t the only family member who may have coverage options for you. Depending on your age, you may be able to join your parents’ health insurance plan. Throughout most of the country, health insurance plans allow dependents up to age 26 onto their parents’ plans. In New York, where health insurance is heavily regulated, you may qualify for your parent’s insurance plan until you’re 29 years old.

Pay premiums with health savings accounts

Trying to figure out how you’ll pay for your health insurance while you’re scrambling to line up a new job? You may be able to use money from your health savings account (HSA) to pay the monthly premium. Anyone who pays for COBRA or receives unemployment compensation can, under state or federal law, use HSA funds to cover premiums.

You can also use the money in your HSA to pay for qualified medical expenses such as prescription drug costs, medical co-pays or the cost of getting treatment. But be careful with contributing to your HSA during a period of unemployment. You’re only allowed to contribute to an HSA if you have a qualified high-deductible health insurance plan.

Mind the gap

In the past, people who lost their job had to worry about paying extra taxes if they went without health coverage for too long. However, the federal individual mandate that required people to buy insurance was repealed for 2019. That means most people won’t pay penalties if they have an insurance gap. But the individual mandate hasn’t disappeared everywhere. States including Massachusetts, New Jersey, Washington D.C. and California have their own penalties for people who don’t carry insurance.

Even if you won’t be penalized, you’ll need to act quickly to avoid a coverage gap. Jen Smith, a writer, lost her staff position and health insurance coverage when she was 30 weeks pregnant. After exploring a few options, she moved quickly and joined her husband’s insurance plan. Shortly after getting coverage, she had a seizure and had to be hospitalized. “Thankfully, the insurance coverage backdated to the start of the month, so I had the coverage I needed,” Smith said.

How quickly do you need to act? In most cases, you should try to have coverage in place within 30 to 60 days of losing your job.

If you don’t opt to join a family member’s plan, you’ll have 60 days to enroll in COBRA coverage or buy insurance through the exchanges. Once that window closes, your options for coverage are much more difficult.

The bottom line

Losing your job may make it tough to move forward but maintaining health insurance coverage is critical to your overall well-being. Consider your options and choose a plan that works for you and your wallet.