By Brenda L. Peterson, The Layoff Lady
Contract vs Benefits Eligible Roles
When you're looking for work, it's important to know what salary range you have in mind. As you are initially searching for jobs, a key factor in deciding which jobs to pursue and which to pass on will be what you will earn.
If you are looking at contract positions, the salary you will receive is the same as your base salary. Usually, you are paid a set amount for each hour worked with no additional benefits. Consequently, contract positions often have a higher hourly rate knowing that each contractor will have to cover their health insurance and other additional benefits that may be included in other job offers.
However, If you are in a benefits-eligible role, you will receive additional value above and beyond your base salary rate. Let's consider what factors may be included in your total compensation package.
While I feel comfortable discussing various financial and insurance concepts, I do not currently hold a license or any certification that deems me inherently qualified to give financial advice. The information provided here is intended to be used for educational purposes only.
Sometimes, the core challenge is knowing how a system generally works, the terms used to describe what you’re asking about, and where to go for additional help. My goal for this article is to share information to guide you as you navigate the murky waters of job searching. I hope my personal experiences can help you cut a path through the wilderness as you try to figure out your next steps.
Feel free to take my recommendations or not. Whatever you do, double-check my facts--and everyone's purported facts, for that matter. This is your life, and you will care more about your financial and healthcare decisions than anyone else. Use this information as a starting point for further research as you ultimately decide what’s right for you.
Your Work Income
First, let’s look at a high-level, generalized overview of the money you may receive:
Employer Money You May Recieve For A Specific Purpose
In addition to receiving money in the form of a check or payment payable to you, you may also receive money earmarked for a specific purpose.
Insurance and Benefits, At Least Partially Employer Paid
In the United States, many people obtain different types of insurance through their employers. Employers often pay administration costs of the plan and help cover some of the costs.
Access To Purchase Additional Benefits
Many employers offer the option for employees to purchase additional benefits. These can include vision insurance, short-term disability, long-term disability, enhanced disability coverage, supplemental life insurance, spouse life insurance, child life insurance, accident insurance, condition-specific health insurance, a legal protection plan, or orthodontic benefits.
Companies may also offer a variety of perks. These can include items you can purchase for a lower cost or resources you can take advantage of that you might otherwise pay for elsewhere. These could include an onsite gym, onsite daycare, free parking, entertainment discounts, stamps, bus passes, use of the company van, cell phone plan discounts, or reduced entry fees for area attractions.
Perks can also be anything that makes work easier, more engaging, or more pleasant. These could include shift bidding, flexible work arrangements, remote work, work-from-home days, summer hours, four-day workweeks, onsite flu shots, overtime opportunities, or company events.
Employers also often pay you for specific hours when you do not work. Here are a few standard categorizations for different types of paid time off: paid time off (PTO), sick time, vacation time, paid holidays, floating holidays, volunteer time, bereavement leave, jury duty pay, or military leave.
Instead of having a specific number of paid days available for sick or vacation time, some companies have unlimited time off policies. In most cases, instead of earning and then choosing to use paid time off, you work with your manager whenever you want to take off. In general, as long as you are performing your job to an acceptable level, you can take time off.
The Salary Question: Revisited
Remember, when a recruiter asks about your salary range, there is a lot more going on than just your base salary. Overall, I suggest giving a salary range instead of a set number to account for possible differences in company-offered benefits.
By Brenda L. Peterson, The Layoff Lady
When your “day job ends”, many things in your financial life change. For one, what is for many people their core source of income, ends. This often prompts a quick shift to a short-term survival mindset that will last from the layoff event until the first paycheck from that new job arrives.
Let's talk about how to manage your healthcare during this time. Note that I’ll outline options first, and then you can review all of the links at the end of this article for additional information. Brace yourself—there is a lot going on here.
Disclaimer: (You know there has to be one of these now that we're talking about topics like personal finances and health insurance.)
While I know quite a bit based on my previous work experience supporting financial coaches, my own research, and my personal life experiences, I do not currently hold a license or certification to give financial advice. The information provided here is educational information provided as guidance.
I hope you glean value from my lessons learned. Feel free to take my recommendations or not—but whatever you do, double-check my facts (and everyone's facts, for that matter). This is your life, and you will care more about your finances and health care than anyone else does. With that, read on.
Healthcare Coverage While Employed
In the United States, where health insurance for many people is part of an employer-provided benefits package, thinking through the health insurance implications of a job change is critically important. While working, you have limited health care coverage options through your employer. You make your selection when you first start, and after that, once a year. In most cases, your employer pays for part of it, facilitates the payment for your health care coverage, and even allows you to set up and use a Health Savings Account (HSA) as a separate benefit.
Healthcare Coverage Options After a Layoff
After you are laid off, your former employer will let you know when your benefits end. It may be as soon as your separation date, the end of the calendar month, or some other date altogether depending on your organization. If you have the time and ability to do so, it may be a good idea to fit in any doctor's appointments you have been putting off while you still have coverage.
Once your employer-sponsored coverage ends, there are many options for healthcare coverage. You'll also need to take steps to enroll in whatever coverage you choose. Most of these options have an associated monthly premium, and some are more cost-effective than others. Here are a few possibilities for your consideration.
Your Severance Package and Continued Benefits
If you do receive a sewerage package, you may also receive continued healthcare coverage for a specified period of time. You may get health care coverage included for a bit. This could be the company paying for the benefits you had before, or an amount of money that is earmarked to pay for healthcare coverage. These are two very different propositions.
If the company continues to pay for your health benefits, your coverage will work as before with your same coverage levels and networks. However, if you receive money to pay for health care coverage, you will need to decide what to purchase, enroll, then pay for it as billed.
COBRA Continuation Coverage
COBRA stands for Consolidated Omnibus Budget Reconciliation Act. In short, this provision allows former employees to pay the total cost of their formerly work-sponsored health insurance on their own. If you choose this option, you can keep this coverage for up to 18 or 36 months. As part of your layoff paperwork, your now former company will send you information about the logistics and cost of keeping this coverage and let you know your deadline for signing up (which is typically 60 days).
The good news? You can keep your same coverage. The bad news? The cost may knock you back. Now, you'll pay the total price for your coverage instead of your employer helping offset the cause. For example, while working, you may have spent $500 a month for your family’s healthcare coverage, and with COBRA, you will now likely pay thousands of dollars a month for that same coverage.
Become a Dependent on Someone Else's Employer Plan
Depending on your age and personal situation, you may have the option to be added to someone else’s employer-sponsored healthcare coverage. Here are two common scenarios:
In general, if your former employer’s plan covered you, your family member's plan will allow you to enroll in their plan, even mid-year. Be sure to check with your family member's employer to see if being added to their plan is a good option for you.
Remember, if you are added to your family member's health insurance plan, the additional costs for whoever is footing the bill can vary from “no big deal” to “holy crap, that’s an extra [whole lotta money] a paycheck!”
Healthcare.gov: The Marketplace
Since the Affordable Care Act (ACA—also nicknamed “Obamacare”), additional healthcare coverage options have been available outside employer-sponsored coverage. To find out what health insurance options are available, your eligibility, and any amount of help (in the form of a subsidy) you might qualify for, check out Healthcare.gov, also referred to as “The Marketplace.” Alternatively, some states have their own healthcare-specific website, like MNsure.gov in Minnesota. Regardless of if your state uses the national site or their own, this is the go-to place to find out about possible healthcare options that comply with ACA standards, meaning that they include a base level of coverage (like preventative health screenings, emergency services, pregnancy, etc.).
Many of these plans are High Deductible Health Plans (HDHP), and the higher the deductible, the lower your monthly premium, but the higher the possible out-of-pocket expense you will have. As with other high deductible plans, you can save money in a separate Health Savings Account (HSA) to help cover those expenses. However, Healthcare.gov does not have the option to help you set up an HSA account, so you’ll have to seek that out elsewhere if you are interested in setting that up.
One significant benefit of looking here is the possibility of getting a subsidy. A subsidy will help offset your healthcare cost and is usually applied before any premium you would need to pay every month. Typically, subsidies are calculated based on your projected income for the year, depend on how much money your household is bringing in, and may vary by state. You would need to enroll in an ACA plan within 60 days of being laid off.
Overall, Healthcare.gov can be a lot to juggle—but they do have help available in the form of agents, brokers, or assisters.
Short Term Health Insurance
Short Term health insurance is just that—lower-cost insurance intended to help you bridge the gap between employer-sponsored coverage. Typically, these don’t have preventative benefits (like annual physicals or flu shots covered), but they are significantly less expensive. In addition, this kind of coverage ensures that if something big happens, like an accident where you end up in the hospital, you won’t go broke paying for all those costs.
For example, during one period of unemployment, I bought short-term health insurance coverage for my daughter (for a tumultuous month where for a moment, it looked like all of my daughter’s parental units would manage to be out of work all at once). It was under $100 and ensured she had at least some coverage as we figured out the details of her longer-term healthcare coverage.
There are several other options to help pay for healthcare costs varying from good ideas to decidedly bad ones. For example, you could buy a private health insurance plan, take part in Medicaid/Medical assistance based on your financial situation, explore a community health share program, visit community health centers, use telehealth, rely on Minute Clinic, use a healthcare-specific credit card, and/or use discount cards to minimize prescription costs.
Alternatively, you could use the “be careful” plan, which means no health insurance coverage, but no skydiving either. When it comes down to it, consider the short and long-term implications of your healthcare coverage decisions (including the possible financial hardship of having a significant medical diagnosis or expense without being insured) before choosing your course of action.
I Just Got Laid Off--Now What?
by Brenda L. Peterson, The Layoff Lady
It Starts Like Any Other Day
You get up and get ready for work. It starts like any other day. Then, something happens that is a portent of doom:
Whether you have a one-on-one (plus an HR representative) meeting with your soon-to-be-former boss or receive an awkwardly worded email that part of you thinks must be spam or a joke, you are now among the newly unemployed.
Some days, you go to work with lots of plans and come home with a white box filled with all of your workly possessions.
Welcome to the suck.
It's hard to know what to do when you suddenly find yourself out of work. Even if there were rumblings about a possible reduction in force (RIF) at your company, it's still surreal when you realize your job is now over.
Whether you loved your job, hated it, or felt somewhere in between, it's time to deal with your current emotions, assess your current state, and (above all) not do anything particularly counterproductive as you figure out what to do with yourself.
Based on the crazy number of layoffs I've navigated, here are my suggestions for your next steps.
Step 1: Process Your Emotions
Curse you, feelings!
Losing your job, even through no fault of your own, is an emotional roller coaster. Given how much of your life you spend at work, suddenly not having the same job is a huge change. In fact, it’s the same level of change as things like getting divorced, having a close friend die, or going to prison. You may feel fine one moment, angry the next, then ecstatic, then in tears. Realize this is completely normal.
Just like dealing with a death in the family, you’re dealing with the death of the future you thought you had. Losing that imagined future, regardless of your job’s role in your life, is a significant loss that needs to be addressed. Figure out how you will cope with these changes. You might choose positive ways (exercise, reconnecting with friends, journaling) or negative (overeating, overthinking, or a good old-fashioned bender). Find your emotional support people and confide in them. Talk to your partner, family, and friends. Find a support group (in-person, online, or both) to help you work through it.
As much as you may want to jump over the part where you have to admit you have feelings that influence how you live your day-to-day life, you need to address them—whether it happens now or later. During one of my layoffs, I was going through many new and exciting (read "stressful”) life changes all at once. Then, I compartmentalized and focused on the business of moving and finding a new job. Once I was in my new job, I pretty much worked during the day and went through the process of dealing with all of the life changes at night. Do what works for you.
A Note About Social Media
As you process your feelings, be cautious about sharing right away (and/or in great detail) on social media. Give yourself 24-72 hours to feel your feelings and talk to the individuals in your support system offline. After you have had a little time to process, then decide what to post publicly. Be sure to get your head straight before sharing anything with the masses.
Step 2: Review Your Finances
Disclaimer: (You know there has to be one of these now that we're talking about topics like personal finances and health insurance.)
While I know quite a bit based on my previous work experience supporting financial coaches, my own research, and my personal life experiences, I do not currently hold a license or certification to give financial advice. Therefore, the information provided here is educational information provided as guidance.
I hope you can glean value from my lessons learned. Feel free to take my recommendations or not—but whatever you do, double-check my facts (and everyone's facts, for that matter). This is your life, and you will care more about your finances and health care than anyone else. With that, read on.
Possible Money From Your Former Employer
Most of us work because we have expensive habits to support—like living indoors and eating on a regular basis. When a job ends, there are financial concerns that need to be addressed pretty quickly. The money coming into your household will change A LOT, and it's time to get your arms around those changes.
While you won’t have the income from your job, you will receive your final paycheck, possibly vacation time that you have earned and, hopefully, a lovely parting gift from your former employer in the form of a severance package.
If you do receive severance, the amount can vary wildly. In fact, it could be between a fat lot of nothing, to the equivalent of a paycheck or two, to 1-2 weeks of pay for each year you were with the organization, to a big old check from a tech firm doing widespread changes and wanting to be spoken well of in the media. As an extra added bonus, if you do receive severance, realize that it may be less money than you think because of taxes withheld or other various and sundry deductions.
If you get a severance package, realize you will need to sign something before receiving that money. Once you sign, any thoughts you might have about legal action regarding your employment with the organization are pretty much over. Read the agreement given to you, consider having a lawyer look it over, and ask for clarifications (and any revisions) before signing it. After that, there is typically a waiting period before you receive that money. This is big-time adulting here, so enlist help as needed.
While your regularly scheduled income from your previous employer may end, in most cases with a layoff, you will be eligible for unemployment income. In short, apply for unemployment payments. The money used to make unemployment payments comes from the payroll taxes that employers pay. This money is intended to help people who have been laid off from their jobs to help fund the time it may take them to find a new, comparable job.
Unemployment payments are administered by each state and vary from state to state. (I'll include a link at the end of this article.) After you apply for unemployment payments, there may be a waiting period before you receive a payment (in Minnesota, there is one "nonpayable week" before payments begin.) Your state will also outline the amount of each payment you will receive, the number of payments you are eligible to receive, and additional factors impacting your payments. You may also be eligible for job search support services and even programs to help you upgrade your skills. To learn more, visit this link and click on your state for additional details about unemployment and related benefits and services.
In short, apply for unemployment income right away. In most cases, there is not a reason to forgo unemployment payments.
A Note About The Joy That Is Health Insurance
In the United States, where health insurance for people of working age is often employer paid, thinking through health insurance implications of a job change is critically important.
Since many people rely on their employer for health insurance coverage, figuring out this aspect can be tricky. If you are fortunate enough to have a spouse/domestic partner/parent who can bring you onto their health insurance, check that out right away. In general, if you were covered by an employer's plan, and lose that coverage, you will be eligible to switch to another employer sponsored plan. Be sure to at least ask that question of that other potential employer-sponsored health care coverage.
If that's not an option, you have a few more decisions to make. If you do receive a severance package, health insurance coverage for some period of time may be included. Find out if your previously employer sponsored health insurance coverage is paid for by the employer, or if you will receive money to cover the cost of coverage. (These are two very different things.) You may also be eligible for COBRA coverage, which means that you would continue your previously employer paid health insurance, but pay for it yourself. Be sure to brace yourself when you see the amount that you will now be charged for that coverage--because it is usually A LOT more than you paid as an employee.
If you are not willing and/or able to continue with your previous employer's health plan, you may be able to go on the insurance exchanges to find coverage--which may even be subsidized given your new lower income level. Alternatively, for shorter term coverage against something super big and awful happening, you can check out short-term health care options. The coverage is not as comprehensive as what is on the exchange, but it's also way less expensive. Depending on your situation, you may also opt for the “be careful” health plan (no health coverage, but no sky diving either). Figure out what makes the most sense to you, and how to mitigate any risks you take.
Step 3: Prepare For Your Job Search
Now that you are without a job, you need to figure out how to get a new job—which is no small effort. Think about what kind of a job you want and write it down. Take time to think about the job titles, possible employers and salary range you want to target. It’s hard to find what you want until you actually know what you want to find. Get your resume updated (if you haven’t already). You may even need a couple of different basic resumes if you’ll be applying for different types of jobs. Figure out how to highlight your unique skill set and showcase what problems you can help your potential employer solve.
From here, start letting people know about your new status of being “in transition” (not unemployed) and ask people for help. Many times, people offer help. Letting them know specifics on how they can help will do wonders. Perhaps they can introduce you to people who work at one of your target companies. Perhaps they know about a position that has not yet been advertised. Perhaps they know someone who knows someone who you should talk to. Maybe they have a lead on an up and coming company who needs someone just like you. Rely on those working relationships that you have built and put them to work. (Also remember that this is a two-way street. Be sure to help your fellow job seekers, or people who are trying to fill positions. Creating mutually beneficial relationships helps everyone.)
Keep in mind there are additional resources beyond your current network. Just like with emotional support, there are groups that can help with job searching. Check out LinkedIn groups, in-person meetups, and seminars on how to network. Find a professional group and meet those people. The more people you meet, the better chance you will have to find a new position that is right for you.
First off, this is A LOT of information to manage, and you don't have to do all of this alone. Be nice to yourself and know that you can totally do this.
Through my many, many layoffs, one thing has remained true. I have always ended up in a better place, both personally and professionally, than I would have expected. I learned new skills, met new people and made life changes that I probably needed to make, but I only did when life gave me the shove I needed
Remember, this whole process is a lot, but you can totally do this. I, for one, am here with information and resources to help you navigate some of the yuck as you create your new reality. You've got this.
7-time layoff survivor Brenda L. Peterson, The Layoff Lady, waxes poetic on layoffs, job transitions, & career resilience.