The US unemployment system is run on a state by state basis. So there’s a lot of different requirements and caveats. When I was unemployed I had to report any i

The US unemployment system is run on a state by state basis. So there’s a lot of different requirements and caveats. When I was unemployed I had to report any income so it could be deducted from my payment as well as what jobs I had applied to that week. I was receiving benefits from Washington state (fairly liberal) which were pretty generous and the requirements were pretty easy to comply with. Other states make it much harder and are far less generous. More broadly though, the “welfare trap” that you describe is definitely a thing. I’m not in the states anymore, but the best healthcare I ever had was when I went back to school and qualified for “Medicaid” through the state of Colorado because my income was close to 0. That health plan was far better than any that are offered for sale so I had to make sure to not exceed the income threshold until I took a high paying dev job that came with good benefits.