WAYS TO KEEP HEALTH COVERAGE IF YOU LOSE YOUR JOB
April 14, 2009
A layoff does not have to involve losing your health coverage, says Devon Herrick, a senior fellow with the National Center for Policy Analysis. Although there is no need to panic, you should not put off taking action. Here are options to consider as soon as possible after getting pink-slipped.
Use it before you lose it:
- One of the first things you should do if you are laid off is ask the company human resources (HR) department exactly when your employer-paid coverage expires.
- If you are laid off during the middle of the month, you may have employer-sponsored health insurance through the end of that month.
- That's time enough to refill a prescription or move up a needed doctor's appointment.
Stay in your employer's plan by paying COBRA premiums:
- COBRA (the Consolidated Omnibus Budget Reconciliation Act) is a federal law that gives former employees the right to stay in an employer's health insurance plan for up to 18 months; but the cost is high -- you have to pay 100 percent of the employer's premiums plus 2 percent for administrative costs.
- In general, you must sign up for COBRA within 60 days after being notified of eligibility following a job loss; if you allow 62 days to lapse and don't sign up for COBRA or any other health coverage, you can lose in other ways.
- Having a significant gap in coverage can result in a waiting period before pre-existing conditions are covered when enrolling in another plan at a new job.
- Procrastinators can also be denied coverage if they try to buy individual insurance on their own.
- For more information about COBRA, check the Department of Labor Web site: http://www.dol.gov/ebsa/faqs/faq_compliance_cobra.html.
Join your spouse's or a parent's health plan:
- You may have the option to join a health plan through your spouse's or parent's workplace, however, federal law requires you to sign up within 30 days from the date of a job loss or loss of benefits.
- Some states require insurers to cover dependent children up to age 30.
- For details on laws in various states, see: http://www.ncsl.org/programs/health/dependentstatus.htm.
Source: Devon Herrick, "10 Ways to Keep Health Coverage if You Lose Your Job," National Center for Policy Analysis, Brief Analysis No. 653, April 14, 2009.
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