What Happens to Your Health Insurance During a Furlough

By Krista DeKuyper | November 19, 2021 | Employee Benefits, HealthQuotes Articles

If you’re an employee at a company that’s currently in the middle of a furlough or layoff, it can be stressful to figure out what your next steps should be. For example, when you don’t know whether or not your employer is going to provide health insurance benefits during this time. If they do not provide coverage for their employees on unpaid leave, then the employee would have to pay full price for their medical expenses until they are back to work and covered by their company’s health insurance again. 

It is important that you know what happens with your health care benefits while on unpaid leave from work You deserve to have all of the information so that you can plan accordingly.

What Is A Furlough

A furlough is a temporary leave of absence from work that an employer institutes for economic reasons. When the company has to furlough employees, they typically do so in order to reduce labor costs. You do not get paid while you are furloughed. The positive side is that once the business is able to bring their employees back, they can do so without the need for a re-hiring process. On the other hand, employees that have been furloughed will have some reassurance that they will be able to return to their jobs at some point in the future. They’ll be able to come back, to the same position, responsibilities, and pay that they had before.

Furlough or layoff

A layoff is when an employer decides to let an employee go. What distinguishes a layoff from a furlough is that a layoff is considered permanent. Although there is a possibility for the worker to return to their place of work. A layoff can mean either termination or suspension depending on the situation.

What Happens To Your Health Insurance During A Layoff

If you’re laid off, you will not be eligible for any benefits until you find a new job. This means that if you have health care, your company’s health care plan won’t cover anything until your new employer provides coverage and you pay your premiums. What most people who have been laid off do to keep their health benefits is apply for a conversion plan. You’ll need to apply within 90 days of leaving your previous job. Conversion plans are more expensive, but they will cover you until you are able to get on your new job’s healthcare plan.

What Happens To Your Health Insurance During A Furlough

If you are about to go on unpaid leave, be ahead of the game and research what your company’s policy is with regard to your health insurance. Some policies state that if you’re on an unpaid furlough, then you’ll lose coverage during that time. You may need to pay for your medical expenses out of pocket until you return to work. If this is the case, then buy some type of coverage like a conversion plan for yourself in advance before you leave.

Or in other cases, depending on the company policy you’ll be able to keep your health benefits during the time that you’re not working. Just make sure that you’re still covering your share for the contribution.

How Will You Know If Your Company Offers Health Care Benefits During Unpaid Leave

If your company offers health care benefits during unpaid leave, they will most likely provide you with the information in the event of a furlough. The best way to figure out is to ask your employer if they offer this type of coverage. If the answer is no, then what you’ll need to do is get yourself enrolled in a conversion plan.

FollowME Conversion Plan

FollowMe is Manulife Financials’ guaranteed issue health and dental insurance plan for Canadians. In fact, it’s designed as a ‘conversion plan’ for people who have lost their employee benefits coverage. Your coverage is guaranteed with no medical questions asked when you apply and pay your first premium within 90 days of your employee benefits ending.

Read the full details and breakdown in our blog post.

How To Figure Out The Costs to Continue Paying For Insurance While On Unpaid Leave

First off you can use our instant quoting tool and compare quotes from leading insurance providers. The process is super simple and there is no added sales pressure unless you ask for it.

Find out in this blog exactly where you can find affordable health insurance in Canada!

Another option is to contact insurance brokers directly and ask them to give you a quote. You’ll want to make sure the quote you get includes everything that’s needed for your coverage. Ask them questions about what their insurance policies cover (and don’t cover).

You should also ask how much it would cost if you were on an unpaid furlough or layoff and how much it would be to continue receiving benefits during this type of situation.

It’s important to research your company’s health care policy and be aware of what happens to your health insurance during a furlough or lay off. If the policy says that you’ll lose coverage, buy a conversion plan before leaving work so you can keep up continuous healthcare for yourself and family members while unemployed.

Make sure you’re covered and avoid paying out-of-pocket expenses. To learn more about conversion plans contact our offices today!