Getty Shuttered stores.
Many businesses in the United States have been forced to close temporarily or reduce their services due to the COVID-19 pandemic. This has meant that many Americans are laid off or furloughed by their employer.
A furlough is when someone stops working for their employer, usually on a temporary basis. They will typically return to the company when the circumstances allow, such as when the social distancing measures are removed. When an employee is furloughed, they will no longer earn a salary. However, many people who have been furloughed or risk being furloughed are wondering if they can keep their benefits, including their health insurance?
Here’s what you need to know about furloughed employees’ health insurance:
There Is No Federal Policy on Health Insurance While Furloughed & It Will Usually Depend on Each Employer
If you’re on furlough by your employer, it’s usually viewed as a temporary leave and most employers will continue to provide health benefits. However, it does depend on each company as well as the rules in your state, because they could also change the extent of your benefits.
When an employee is furloughed, they are able to file for unemployment without losing their health insurance.
Employers will also decide how to manage health insurance benefits, especially concerning employee contributions. Some employers might require staff to send in a check to pay for their benefit contributions, while others could ask for the contributions only at the end of the furlough.
Businesses Have to Check With Their Health Insurance Providers
Employers also have to check in with their providers of health benefits. As one financial advisor told CNBC, “The question is how long employers can keep their employees on benefits when they’re not working or being paid. That is a situation where the company needs to contact the health insurance company directly.”
Some plans require that employees hold a full-time status to be eligible. Furloughed employees typically have a date or a condition where they are required to return to work. Employees who have been or risk being furloughed should check the conditions of that furlough with their employer.
A high-profile furlough that’s occurring in the U.S. currently is the retail giant Macy’s, which announced on Monday that they would be furloughing the majority of the 130,000 employees. They said that employees on furlough would not be paid, but those enrolled in health benefits would be covered to 100% of the premium, at least until May.
Macy’s joins other stores like JCPenney and Kohl’s that have both furloughed a large majority of their staff but are continuing to provide existing benefits, including health insurance, to furloughed employees.
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