What to Do If You Have Been Laid Off or Fuloughed

Certified Financial Planner Employee Benefits Financial Advice Financial Advisor Financial Planning Financial Services RIA Wealth Management June 8, 2020 Author: Deborah Doyle

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COVID-19 has impacted the lives of millions of individuals beyond just their health but to how they provide for their families. The US Bureau of Labor Statistics stated that April unemployment rate spiked to the highest level since the Great Depression. With job security on the line for so many people, it is important to know the necessary steps if you become or have been furloughed or laid off.

Communication is Key: Make sure you know how to contact your firm’s Human Resource department for any follow questions or documentation that you may need. The HR Team will likely be the best place to learn more information about the company’s policy, federal and state legislation, and best methods for filing for unemployment benefits.

Get the Facts: Confirm with your employer whether you are laid off or furloughed. Furlough means you are still an unpaid employee – there is just no work.  While a layoff typically indicates a permanent, full separation from the employer. It can mean the company is firing workers or likely eliminating their positions. If you have been notified of a lay off or furlough, ask for your company’s Federal Employer Identification Number (FEIN).

Unemployment Benefits: Visit your state’s unemployment website right away. It will provide you a checklist of the necessary documents and information. Furloughed workers CAN collect unemployment, but qualifications vary by state.

Health Insurance: During this pandemic, health insurance is critical. Ask your employer if you are still covered and for how long. This will help you determine your eligibility for COBRA. COBRA is a health insurance program aiding eligible employees and their dependents to continue health benefits when they lose their job or reduced hours.

Out of Pocket Costs/ Health Savings: If you had a Health Savings Account (HSA), you can still use those funds for qualified, out of pocket health care expenses such as co-pays and prescription costs.

Retirement Plans: If you have been laid off, you should get the contact information regarding your 401(k) or any other retirement fund from your employer. Once you do find new employment, you can weigh your options of consolidation or potential rollovers.

It is difficult to stay hopeful when it feels like there is constant negativity coming your way for weeks, if not months, but it is important to remember to be financially responsible with how you spend and save.

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The opinions voiced in this material are for informational purposes only and are not intended to provide specific advice to any individual.  Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation.

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