Laid off and Worried About Money: What to Do Next?
Dear Carrie: I'm a single parent with two middle school-aged kids and was just laid off because COVID-19 regulations forced my employer to shut down. I'm worried I may be out of work for a while. I received a small severance and have a 401(k), but that's about it. What's the best way to get through the next few months? Can I draw money from my 401(k)? What about health insurance? -- A Reader
Dear Reader: As I said in a recent column about getting through tough financial times, the current crisis is impacting millions of hardworking and responsible Americans who suddenly find themselves in a financial crunch they could never have imagined only a few months ago.
My heart goes out to every one of you, especially those of you who are single parents. But although things can feel like they're spinning out of control, the key is to stay positive and take action. Here are some concrete steps you can take right away to help you both financially and emotionally.
File for Unemployment
If you haven't already, do it now. The state you live in and the amount you made over the past year will determine how much you get. It won't replace your entire paycheck but can certainly help. Also, the federal government has increased benefits due to COVID-19 by adding an extra $600 per week for up to four months. Check with your state for details. Careeronestop.org is a good resource for unemployment updates and linking to your state's unemployment insurance website.
Look Into COBRA
If you work for a company with at least 20 employees, you may be able to continue your group health insurance through COBRA for up to 18 months. The catch is that premiums can be a lot higher than you paid as an employee.
Contact the benefits department at your previous employer to get the facts on cost and the process for making the switch. Then do some comparison shopping before you elect for COBRA. You may be able to find a lower-cost policy through your state's or the federal Affordable Care Act exchange at healthcare.gov. You may qualify for a special enrollment period if you lose health coverage through your employer or the employer of a family member.
Whatever you do, health insurance is a must for you and your children. You don't want an illness or injury to jeopardize you or your family -- especially now.
Do Some Careful Personal Accounting