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What are your health insurance options if you’ve been furloughed or made redundant?

The coronavirus pandemic has resulted in job losses across the globe, and the United Kingdom is no exception. As the pandemic timeline continues, tens of thousands of employees in the UK have been made redundant and millions have been furloughed. With a significant percentage of the UK workforce at risk of losing their jobs, many are left wondering what will happen to their employer-provided health insurance if worse comes to worst. In this Pacific Prime UK article, we discuss what your health insurance options are if you’ve been furloughed or made redundant.

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COVID-19 and job losses in the UK

Following the three-month nationwide lockdown that was imposed on March 23, companies in various sectors announced furloughs and redundancies, with retail, hospitality, aviation and leisure being the hardest-hit. While the lockdown helped control the crisis from a health standpoint, it has taken a huge toll on the economy.

Britain’s GDP dropped by 20.4 percent during the lockdown. Consequently, 730,000 jobs have been lost between March and July. While the economy is gradually reopening now, many businesses are now faced with the difficulty of staying afloat with social distancing measures in place. Companies have had to resort to furloughs and redundancies just to survive, with both numbers expected to increase in time.

Furloughs indicate more job losses on the horizon

Even though the number of redundancies in the UK is high, the number of workers who have been furloughed is even greater. Over 9 million jobs at over one million companies in Britain alone have been furloughed since the government’s Temporary COVID-19 Wage Subsidy Scheme launched in March. However, the Coronavirus Job Retention Scheme has been scaled back since August and will end by November. Experts predict that furloughs could turn into redundancies when that happens.

What is the furlough scheme?

Since September, businesses that have put workers on furlough have to pay 20 percent of their wages. Ending on October 31, the furlough scheme was created to help employees who could not perform their jobs and to prevent a tsunami of redundancies.

Furloughed employees have been able to return to work part-time since July. For instance, an employer could pay for two days of work a week and the furlough scheme would cover the three non-working days. Since August 1, employers have been required to pay National Insurance as well as pension contributions for their employees.

While the decision to end the scheme on October 31 has been criticised by some, others have backed the decision. Andrew Bailey, Governor of the Bank of England, said it is important for workers to “move forward” and avoid staying at unproductive jobs.

Can I be made redundant during the furlough scheme?

Employees can certainly be made redundant at any time while on furlough. Mass job losses are predicted to occur when the scheme ends. The government is encouraging businesses to protect jobs by paying a bonus of GBP £1,000 for every furloughed worker that is retained until the end of January 2021.

The workers must receive an average pay of at least GBP £520 per month between November and January. Additionally, if an employee loses their job and qualifies for redundancy pay, it should be calculated based on their wages prior to furlough.

What are my employee rights on furlough?

You still have the same employee rights if you are on furlough. If you’re ill, your employer can decide to move you to Statutory Sick Pay (SSP) or keep you on furlough. You’re also eligible for SSP if you’re on unpaid leave, have caring responsibilities or shielding. Employees on parental leave will continue to receive statutory pay from the government as well.

Employers are not required to top up salaries that don’t reach the minimum wage. If you’re self-employed and are adversely affected by the coronavirus pandemic, you might be eligible for a taxable grant of up to 70 percent of your average monthly profit.

Benefits that are offered by the employer must be maintained, unless an agreement with furloughed employees has been made. Employers that provide health insurance need to check with their scheme provider about whether a normal annual salary or furlough salary would be used in the event of a claim.

What benefits do I get if I’ve been made redundant?

For employees who are made redundant, benefits typically end with your employment. That means you’ll need to pay for health insurance out of pocket. However, the terms of your employer’s group health insurance plan and contract with their insurance provider or broker will determine whether healthcare coverage can continue if you’re laid off or on a short-term leave of absence. It’s best to ask HR for more details about your employer-provided policy.

If you want to keep your cover with the same insurance provider after leaving your current employer, you have the option of staying on with a new individual policy. This can often be beneficial since your cover will be different, but you can continue to be covered for existing or ongoing conditions if you take out your new policy within a certain period of time. However, these details depend on several factors, so it’s recommended to speak with your insurer or insurance broker first.

Pacific Prime is here to help

Whether you’re looking for international health insurance or expat health insurance in the UK, Pacific Prime UK is happy to help you. With over two decades of experience in the insurance industry, we know how to compare health insurance to ensure you get the ideal plan for your needs and budget. Contact us for free expert advice or to receive an obligation-free quote today.

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Content Creator at Pacific Prime UK
​​Jantra Jacobs is a content writer at Pacific Prime. On a typical workday, she writes and edits articles, guides, and anything else word-related. She loves creating content that is both easy to understand and enjoyable to read.

In her free time, she’s likely to be writing poetry and prose, geeking out on her latest interests, reading, or practicing yoga.