Your eligibility to collect unemployment benefits for health reasons depends on whether you quit your job to care for a sick family member, have a medical issue of your own, and whether you work in a state with accommodating rules. Every state has a different set of requirements.
A battle with unemployment when you are dealing with health problems is a recipe for financial disaster. Lost income combined with the extra doctor and hospital bills are crippling.
Follow this four-part outline for help finding financial assistance.
- Valid “good cause” health reasons if you quit work
- Health insurance continuation options
- Eligibility during and after FMLA
- Coordinating with temporary disability programs
Unemployment Valid Good Cause Health Reasons
Your eligibility to collect unemployment benefits for health reasons depends on the state where you work, and their definition of “good cause” or “compelling personal reason” or “compelling family circumstances.” The federal government provides financial incentives to the states to broaden valid motives for quitting work.
Six states include a person’s own medical condition as a good cause definition to quit work. An additional fifteen support when a person resigns from a job to care for a seriously ill family member.
However, all applicants must wait until they are able and available to work again before eligibility for the unemployment insurance benefits begins. Every state imposes these basic requirements.
- Physically able to work
- Actively seeking a new job
- Willing to accept suitable offers
Alternatives While Waiting
A family facing unemployment due to health considerations faces a challenging financial situation. First, they face a delay in collecting unemployment compensation – if their state even allows it. Then, they may also face extra medical bills. These two alternatives may provide some assistance.
- Debt relief application. Do the math. A combination of extra medical expenses and lost income can strain finances very quickly, and cause you to fall behind on existing obligations. If you owe more than $10,000 in unsecured debt, a settlement program could provide the assistance you need.
- Request a medical loan here. The borrowed funding provides emergency cash to help pay regular bills such as the mortgage, rent, car payments, etc. Pursue this option only if you are certain that you will return to work shortly. Do not make a bad situation worse by starting a debt spiral.
Good Cause Illnesses
Serious illnesses are the most frequently valid “good cause” reasons making someone eligible for unemployment benefits after they voluntarily quit work. The requirements vary by the state where you work and the pursuant laws.
Each state law places different burdens on applicants wishing to file because of their own illness, or a serious health condition of a family member. Expect that you may need to satisfy some or all of these criteria.
- You must be physically able to work. In other words, if you resign because of an illness you must first recover before becoming eligible. You could experience a lengthy gap in compensation while in recovery.
- You may need to inform your employer of the medical problem in advance of quitting to request an accommodation. Compensation is payable only if the employer chooses not to make reasonable accommodations.
Own Medical Condition & Care of Sick Family Member
Care of Sick Family Member Only
|Nevada||New York||North Carolina|
Good Cause Accidents
Accidents are sometimes valid “good cause” health reasons to collect unemployment benefits. It depends on where the accident occurred, which person injured him or herself, and of course, the state where you work and its specific requirements.
- Workers compensation covers on-the-job accidents. You are not eligible to claim unemployment and workers compensation at the same time.
- Temporary disability covers off-the-job accidents. Read more in the section below to see if you can file a claim for both at the same time.
Unemployment Health Insurance Continuation
Regardless of whether you are eligible to collect unemployment benefits because of a health reason, continued access to your health insurance coverage may be far more important. If you are unable to work due to a serious medical condition, unpaid doctor and hospital bills can pile up very quickly if you lose coverage.
Loss of employer-based health insurance is very common during a bout of unemployment. Fortunately, this meets the qualifying life event definition. Most people will prefer an individual plan to COBRA if they earn above Medicaid income requirements.
Individual Health Insurance
Request a health insurance quote. Loss of your existing coverage due to job loss (even if you quit or resigned) is a qualifying life event. This means that you can choose a new plan without having to wait for the annual open enrollment. Pick an individual plan in the online marketplace or with help from a licensed agent.
Now that you are not working, your projected annual income could be much lower than normal – even if you can claim unemployment compensation (see below). Government premium and cost-sharing subsidies are income-based. Project your future earnings accordingly in order to meet the requirements for this form of financial assistance with health care.
Medicaid Health Insurance
Medicaid is the second option for health insurance continuation during unemployment. The income-based qualifying criteria vary by state. In general, the level of financial aid on the premium costs is much higher for those meeting the income criteria. Keep this in mind, as your projected earnings are now much lower.
Medicaid does not have special enrollment periods for newly displaced workers. You must wait until the annual open enrollment to begin coverage.
COBRA Health Insurance
COBRA is the third option for unemployment health insurance continuation. The COBRA rules allow former workers to continue paying for group coverage shortly after separation.
However, most workers between jobs will find this alternative more expensive. The explanation is simple. You lose the employer contribution towards the premium. In addition, you are not eligible for premium and cost-sharing subsidies when opting for COBRA.
Unemployment and Family Medical Leave Act (FMLA)
The issue of collecting unemployment benefits during and after a family medical leave (FMLA) relates to the valid health reasons noted above. The Family Medical Leave Act (FMLA) applies across the country – in all 50 states. On the other hand, only certain states allow ex-workers to claim unemployment after quitting for “good cause.”
|Employee’s own condition||50||6|
|Care of sick family member||50||22|
|Birth of newborn baby||50||22*|
|Adoption of child||50||0|
*Unemployment compensation during pregnancy and maternity leave have unique limitations.
The Family Medical Leave Act provides 12 weeks of unpaid job-protected leave. It covers qualifying employees who work for applicable employers. Only 40% of workers enjoy the job protections, and the coverage expires. Therefore, a complete analysis address without, during and after FMLA.
Collecting unemployment benefits is most feasible for the majority of people who take an unpaid family medical leave without FMLA job protections. Either they have not worked enough hours, or their employer is exempt based on employee size and other criteria.
People in this category are unemployed if they quit or their employer fires them – because they have no job-protection rights under the law. Of course, only a small sub-segment can claim unemployment compensation based on the state-by-state criteria noted in the section above.
Unemployment does not cover FMLA. During FMLA you enjoy job-protection rights – if you qualify and submit the paperwork. The act requires that your employer must hold your job open, and restore you to the same or similar position upon your return.
You still have a job during FMLA. Therefore, the unemployment office in every state will deny your claim for compensation.
Collecting unemployment benefits after FMLA runs out becomes more feasible. Your job-protection rights exhaust after twelve weeks. If you quit or your employer lets you go because you are unable to return to work, then you will be officially unemployed.
However, you must also apply the state-by-state criteria to see if you are eligible to apply for unemployment compensation. As we have already noted, this represents a very small section of the population.
Concurrent Unemployment and Disability Programs
Finally, we address the question of whether you can collect unemployment compensation and disability insurance benefits concurrently, or after one runs out. A very tiny minority qualify for both. A slightly larger minority is eligible for one or the other. Unfortunately, an overwhelming majority meet the requirements for neither.
Find out which segment you fall into based on the separate rules for short-term disability and SSDI. Once again, the rules in the state where you work play a big role in answering the question.
Collecting both short-term disability and unemployment at the same time is extremely rare. First, few applicants meet the eligibility criteria for either program. Second, even fewer qualify for both. Third, the two programs target their financial assistance at different problems.
First, very few people are eligible to receive short-term disability insurance or unemployment benefits.
- Five states have a mandatory temporary disability program.
- Six states define a worker’s own medical condition as a valid claim reason for unemployment claims.
Private short-term disability programs are available in all 50 states. However, private policies do not cover preexisting conditions. Most people wait until they need to file a claim before buying a policy. By then it is too late.
Fewer Eligible for Both
Second, even fewer applicants are eligible to collect short-term disability and unemployment benefits at the same time. The explanation is simple. Most are lucky to qualify for one. Therefore, the odds that they qualify for two are extremely small. In fact, the two sets of states do not overlap at all.
|Temporary Disability||Unemployment Disability|
The only group eligible to claim both at the same time are the people who purchase a private short-term disability policy prior to becoming sick, hurt, or pregnant. Many private policies do not coordinate or offset compensation with any other government program. This of course only applies to people in the six states noted above.
Target Different Problems
The third explanation for why you cannot file a claim for short-term disability and unemployment compensation at the same time is the two programs target different financial aid issues.
- Disability insurance does not cover the care of sick family members in any of the 50 states.
- Unemployment compensation defines the care of a sick family member as a good cause, in twenty-two states.
Social Security Disability
It is also very unlikely that you can collect unemployment and Social Security Disability Insurance (SSDI) benefits at the same time. SSDI targets financial aid to people unable to work because of a medical condition expected to last one year or longer. Unemployment programs primarily target its financial assistance to people able and willing to work.
It is possible to qualify for both SSDI and unemployment only in the six states covering a worker’s own health condition. In many cases, the unemployment compensation will exhaust before the SSDI kicks in.