How Obamacare Affects Unemployed Michigan Residents
The difficulties of unemployment are often compounded by the lack or loss of health insurance. But millions of Americans who are currently without both a job and health coverage may find relief under Obamacare. That's because new coverage options are now available through HealthCare.gov, the health insurance marketplace serving Michigan.
All plans available through the marketplace offer essential medical benefits, including preventive care, emergency services, and prescription drug coverage. You can't be turned away if you have a pre-existing medical condition and, as an unemployed person, you probably qualify for significant cost-saving subsidies.
When you sign up for a marketplace health plan, your coverage can start within a few weeks. Usually, you must sign up during an open enrollment period. But leaving your job and losing job-based health insurance makes you eligible for a special enrollment period. That means you'll have 60 days to sign up for a new health plan.
Here's an overview of your options for health insurance if you are unemployed, plus more information about what might happen if you don't get health coverage. (And if you're looking for information about applying or eligibility for unemployment, see our articles on Michigan unemployment benefits.)
Health Insurance Options for the Unemployed
Your spouse’s job-based insurance. Enrolling in a spouse’s or domestic partner’s job-based insurance plan is a good solution for some. For others, the premium costs are too steep. If coverage through your spouse’s plan is out of reach, you can explore new options for more affordable insurance through HealthCare.gov.
If the coverage available to you through your spouse’s plan is considered affordable, but you don’t sign up for it, you won’t qualify for cost-saving subsidies on marketplace plans. Generally, an employer-sponsored plan is considered "affordable" if the annual cost for employee-only coverage is no greater than 9.5% of your annual household income. Healthcare.gov offers guidance and tools to help you determine whether a job-based health insurance plan is considered affordable under the law.
COBRA. If you’ve just left a job, the Consolidated Omnibus Budget Reconciliation Act (COBRA) usually allows you to keep your employer-sponsored coverage for up to 18 months. This benefit is notoriously expensive, however, because you have to pay the full premium plus an administrative fee; your former employer contributes nothing. Before you lock yourself into COBRA coverage, you may want to compare costs with plans offered at HealthCare.gov.
You have a special enrollment period of 60 days to elect COBRA coverage or buy a new health plan through the marketplace. If you miss the 60-day deadline, you'll have to wait for the next open enrollment period to buy a marketplace plan. You won't be able to choose COBRA after the 60-day special enrollment period ends.
If you do choose COBRA coverage, you'll get another 60-day special enrollment period after your COBRA coverage ends; this gives you time to switch to an Obamacare plan.
Marketplace insurance plans. As mentioned above, you can go to HealthCare.gov to compare features and costs for a variety of insurance plans. Because you are unemployed, you will probably qualify for lower monthly premiums and reduced out-of-pocket costs, based on your income and family size. If your income is very low, you may end up paying very little -- or nothing at all -- for coverage. For more information, see the additional resources listed below.
Medicaid and the Children’s Health Insurance Program (CHIP). These government sponsored programs provide free or very low-cost coverage to millions of Americans with limited incomes. You can learn the coverage thresholds and apply for these programs through Michigan's Medicaid or Michigan CHIP office, or find out whether you are eligible when you fill out an application at HealthCare.gov.
Other private insurance plans. You may purchase a private health insurance plan directly from an insurance company or through a broker; some of these plans may be available outside of open enrollment periods. This may be an expensive option with limited benefits, so compare your options carefully.
For more information, see Private Plans Outside the Marketplace on Healthcare.gov.
Aren’t Unemployed People Exempt From the Tax Penalty?
Not necessarily. Beginning in 2014, everyone -- even the unemployed -- must have health insurance or pay a penalty, unless they qualify for an exemption from the law. Unemployment, by itself, does not make you exempt, but your low income may indeed mean you don’t have to pay.
For details about the tax penalty, including a full list of exemptions, see Do I Have to Get Obamacare in Michigan?
If you do qualify for an exemption, you have to claim it -- either from HealthCare.gov or from the IRS when you file your taxes.
To learn more about how much you may have to pay for health insurance, see How Much Does Obamacare Cost in Michigan?
To find out about cost-saving subsidies, see Ways to Save Money on Obamacare in Michigan.
If you want to apply for coverage, see How Do I Sign Up for Obamacare in Michigan?
For information about applying for unemployment, see How Do I Apply for Unemployment Benefits in Michigan.
To learn whether you qualify for unemployment benefits, see Who Is Eligible for Unemployment Benefits in Michigan.
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