Health Insurance and Employee Lay Offs: What you Need to Know!

With more local businesses shutting down each and every day in Chattanooga, Employers are having to make some tough decisions. Small business loans and relief funding may be on the way, but the details are still being ironed out in Congress. If you have been forced to lay off your employees or are seriously considering doing so, you may be wondering…what I can do to ensure my employees have access to quality healthcare and insurance during the lay off period?

Option 1: They can remain on your Group plan.

Insurance carriers are allowing employees to remain on the group insurance even if not actively at work (laid off). This allows employers to continue covering employees on the group plan, allowing them to recover the employee’s portion of the premium when they return to work. Most insurance carriers have extended the premium grace period to 60 days considering the current state of affairs.

If for some reason you have to discontinue your current Group Health plan, here are some additional options for your employees:

Option 2: They could take Cobra coverage

(which is good for up to 18 months)

What you should know:

Immediate coverage is granted after the group plan has ended. All pre-existing conditions are covered and they can generally keep their doctors without having in gaps in coverage. The downside to this option is very expensive monthly premiums. Not ideal for someone being laid off with limited income.

Option 3: They can seek coverage through the Federal Healthcare Exchanges

What you should know:

  • Coverage is granted the first day of the following month following the loss of coverage. Ex. If you lose coverage on March 20th, your new plan with the insurer will start April 1st. Employees have up to 60 days to choose a plan.
  • Coverage in most cases is very affordable. Why? Premiums are based on household income and number of tax dependents. Monthly premiums can be as low as $0.
  • Access to most doctor and hospital groups.
  • You can keep coverage as long as you need or until employer coverage is restored.

As an Employer, no one wants to tell your employees that you are having to cut their health benefits, especially in the middle of a Nationwide pandemic. Armed with the
information above, you won’t have to! At Insurance Advisors of Tennessee, we can partner with your company to provide the best small group health insurance options on the market. Starting a new business? Even better, we can provide group health plan coverage with as little as two covered individuals. Additionally, we offer Disability, Accident, Dental, and Vision plans tailored to your employees needs. If we can assist your business, please feel free to reach out to us.

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