Unemployment can be rough. Beyond the financial worry, losing your job can take a toll on your confidence and self-image, along with your physical health. It’s especially brutal when the loss happens abruptly. If you’ve had little time to prepare, you may not know the right steps to apply for unemployment.
The good news is that there are resources to help you get through this rough patch. An active way to combat any anxiety is to manage your finances and health care options by taking advantage of available tools, such as government assistance and free services.
Here’s a guide to help you navigate the uncertainty surrounding unemployment, including what you need to know about unemployment insurance and how to file a claim in your state:
- What Is Unemployment Insurance?
- Am I Eligible for Unemployment Insurance?
- Unemployment Benefits During the Coronavirus Pandemic
- How To File For Unemployment
- What Should I Do If I Just Got Laid Off?
- What Are My Health Care Options?
- Other Helpful Resources
- The Bottom Line
What Is Unemployment Insurance?
Unemployment insurance is a form of financial assistance that the federal and state governments provide to individuals who have lost their jobs. If you meet certain eligibility requirements and your claim is approved, you’ll receive a check in the mail either weekly or biweekly, depending on your state.
As of March 2020, the average weekly benefit was $372.97, according to the U.S. Department of Labor. However, the exact amount you can expect to receive will vary by state and your individual situation. The average in Massachusetts is $557.19 per week, whereas the average in Mississippi is $211.92 per week.
If you need financial relief quickly, you may be able to receive your unemployment insurance benefits via direct deposit. Some states also operate a debit card system. For example, unemployed individuals in California can use a prepaid debit card to make purchases, withdraw cash at ATMs, or transfer funds to a bank account.
Am I Eligible for Unemployment Insurance?
Your eligibility for unemployment benefits will also depend on where you live. Unemployment insurance is a joint state-federal program that is managed by the U.S. Department of Labor. All states must follow the same federal rules, but each state conducts its own unemployment insurance program.
You will typically qualify for benefits if you are unemployed due to a lack of available work and you meet certain wage and work requirements that have been set by your state. In most cases, your state is going to look at the first four out the last five full calendar quarters prior to your filing.
The U.S. Department of Labor notes that you must be unemployed through no fault of your own in order to receive unemployment insurance. That means if you were fired for misconduct or left your job without a good reason, you likely won’t qualify.
Eligibility for undocumented workers
Because the U.S. Department of Labor requires valid work authorization and a Social Security number to receive unemployment insurance, undocumented workers can’t claim unemployment benefits. However, undocumented individuals may be eligible for workers’ compensation if they have been injured on the job, as well as disability payments if they cannot work due to illness or injury. California and Idaho are examples of states where undocumented workers can claim these benefits.
In addition, California has pledged $75 million in disaster relief assistance for undocumented workers in response to the COVID-19 crisis. Roughly 150,000 undocumented individuals will receive a cash payment of $500 per adult, up to $1,000 per household, beginning in May.
Unemployment Benefits During the Coronavirus Pandemic
In response to the coronavirus pandemic, the U.S. Department of Labor has expanded its guidance on unemployment insurance programs, allowing states to extend benefits to individuals facing the following circumstances:
- Your employer has temporarily closed for business due to COVID-19.
- You are quarantined but plan to return to work once the quarantine is over.
- You leave your job to take care of a family member or avoid the risk of exposure or infection.
Another major change under the Coronavirus Aid, Relief, and Economic Security Act — which passed in March — is that self-employed and part-time workers are now eligible to apply for unemployment benefits. The law also provides a supplemental $600 per week to people who are collecting regular unemployment compensation. This weekly boost will remain in effect through July 31 in many states.
How To File For Unemployment
Depending on where you live, you can apply for unemployment benefits in person, by phone, or online. Due to the unusually high volume of people filing claims, online systems have experienced outages, and it has been notoriously difficult to get through by phone.
In response to the demand, several states have implemented restrictions on when you can file, so be sure to follow local filing instructions. For example, in Colorado, you can only file a claim on Sunday, Tuesday, or Thursday (or after noon on Saturday) if your last name begins with A through M, and you can only file on Monday, Wednesday, or Friday (or before noon on Saturday) if your last name begins with N through Z.
For more information on how to file for unemployment online as well as unemployment benefits by state, consult this list:
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
Once your unemployment claim has been approved, you’ll want to know how long you can collect benefits. Each state has its own rules, but most will only make payments for up to 26 weeks. It’s best to check with your home state by researching online or calling your local unemployment office.
What you need to file an unemployment insurance claim
While each state may have different requirements, you will likely need certain documentation and information when applying for unemployment, including:
- Your Social Security number
- Driver’s license or other government ID
- Employment history, including addresses and dates
- Bank information (routing and account numbers) so that you can receive direct deposit payments
- DD Form 214, certificate of release or discharge from active duty (if you have served in the military)
- Alien registration information (if you are not a U.S. citizen)
What Should I Do If I Just Got Laid Off?
If you’re newly unemployed and it feels like your head is still spinning, you may not be sure what you’re supposed to do next. Here are some good first steps to take that can help you get the ball rolling.
1. File for unemployment insurance benefits
Your first move should be to address the sudden halt in your income so that you can cover your overhead and essential bills.
“Apply for unemployment insurance, first and foremost,” says Biron Clark, a former recruiter based in the Boston area and the founder of Career Sidekick, a job search advice website. “This will help you pay your bills and stay afloat while looking for a new job.”
You can use the resources above to check your eligibility for unemployment insurance and file a claim if you haven’t already done so.
2. Figure out your health insurance
If you were getting health insurance through your former company’s plan, you’ll also need to consider alternative coverage options for the interim period.
“Once you’ve applied for unemployment, you’ll want to work with your company’s HR department to understand your options for continuing health insurance (through COBRA), and what options exist for continuing other coverages like life and disability insurance,” says David Fortosis, a certified financial planner and financial advisor at HighPoint Planning Partners in Chicago.
Don’t get panicked if all that sounds overwhelming; we explain your health care options later, so sit tight.
3. Prepare for the job search
Next, you’ll want to take some time to increase your chances of landing another job. A great place to start is by updating your resume with all the responsibilities you held and the skills you developed since your last job search. Even if the thought of finding a new gig seems daunting, just remember that you’re likely more qualified now than you were the last time you looked for work.
Beyond updating your resume, be sure to take advantage of your connections and other resources to help you stand out in the field of candidates.
“Ask former co-workers and managers for a recommendation,” Clark says. “Try to get a written recommendation, and also a LinkedIn recommendation. Most candidates don’t have any recommendations on their LinkedIn profile, so this is a great way to stand out in your job search (and many hiring managers check your LinkedIn even if you applied via a different channel).”
4. Reassess your budget
Landing a new job can take a while, so it’s wise to set a tighter budget in the meantime and identify areas where you can reduce your spending.
“If you’ve lost some or all of your income, ‘controlling what you can control’ should be your motto,” Fortosis says. “Reducing your expenses as much as possible — cancelling subscriptions, dropping your gym membership, and limiting other discretionary spending — is a good place to start.”
5. Don’t forget about your 401(k)
If you’re wondering how you should handle your 401(k) plan with your former company, first know that you don’t necessarily have to act. However, it’s good to know your options.
“One option is to do nothing,” Fortosis says. “Unless your employer is closing its doors for good, there’s no urgent need to move your 401(k) balance.”
But even if your company has gone under and its 401(k) plan is dissolved, that doesn’t mean your retirement savings will disappear. Fortosis says you’ll be able to roll your balance into an individual retirement account without incurring a tax penalty — as long as the rollover is completed within 60 days.
What Are My Health Care Options?
The Consolidated Omnibus Budget Reconciliation Act (COBRA) was passed in 1985 to help unemployed workers continue their health insurance benefits for 18 or 36 months after losing their jobs.
“The coverage itself will be identical to the coverage you had while employed,” Fortosis says. “Get ready for some sticker shock though, as your employer will no longer be helping cover the cost of your health insurance.”
If COBRA coverage is too expensive, there are alternative health insurance options for unemployed workers. The federal marketplace allows you to qualify for a special enrollment period if you’ve lost your existing coverage. To start an application, visit HealthCare.gov. If you’re married and your spouse is still employed, Fortosis suggests looking into their company’s health insurance plan, which will usually cost less than COBRA coverage.
“If you’ve been furloughed, the health insurance question is trickier,” Fortosis says. “Depending on the language in your company’s group plan, you could be allowed to maintain your group coverage. But since your paychecks will have stopped, there’s no automatic deduction to cover your percentage of the premium. You’ll want to understand the logistics of how to pay your portion of the premium so your coverage isn’t cancelled for non-payment.”
Covering prescription costs without health insurance
You may feel concerned about filling your prescriptions without your previous health insurance. However, there are different ways to lower your prescription costs. For example, online pharmacies like Honeybee Health can offer medications at a cheaper price.
“I started Honeybee Health in 2017 to make sure everyone has affordable access to generic medication — whether or not they have health insurance,” says Dr. Jessica Nouhavandi, co-founder and chief operating officer of Honeybee. “In fact, we don’t accept insurance at all, since we’ve found our out-of-pocket prices are generally lower than the average copay.”
Honeybee Health offers free delivery and is licensed to operate in most states. If you’re comparing online pharmacies, make sure to check that the pharmacy is licensed in your state to avoid falling victim to a scam.
Other Helpful Resources
Beyond supplementing your income and sorting out health coverage, there’s other assistance available to help you navigate any challenges that may arise during this period of unemployment.
If you’ve lost your primary source of income, figuring out how you’re going to pay next month’s rent is likely one of your biggest concerns. Luckily, there are several nonprofit organizations that provide emergency aid for essential costs like rent or medical bills. Additionally, the CARES Act helps protect people who have fallen behind on rent. The legislation prohibits landlords from evicting tenants before July 25 and requires them to give a 30-day notice to vacate, which can’t be issued before that date.
Free mental health services
A 2017 study published by Materia Socio Medica found that those dealing with long-term unemployment “have at least twofold risk of mental illness, particularly depression and anxiety disorders, compared to employed persons.”
If you’re in need of help, there are free mental health hotlines you can call, including the National Alliance on Mental Illness HelpLine, which is available Monday through Friday from 10 a.m. to 6 p.m EST. at 1-800-950-6264. NAMI volunteers are trained to help identify the best resources for your specific situation. Additionally, you can use free mental health apps like Moodfit and Happify to help manage your stress, depression, or anxiety.
If you don’t have health insurance but can make some room in your budget, look for a Federally Qualified Health Center, which is a government-funded community health care center where you can pay for behavioral health services based on what you’re able to afford.
The Bottom Line
When you’re unemployed, you may feel an enormous sense of pressure to change your situation. At the same time, there’s so much that’s out of your control. Amid all the stress and uncertainty, making a game plan can help you feel more empowered and ease the strain on your finances. If you file for unemployment, strategize your job search, take care of your mental health, and use the resources at your disposal, you can ease the pain of the moment and put yourself another step closer to a new job.