If you have just been laid off from your job, or expect that you will be laid off soon, you may be wondering how this will affect the health insurance coverage you get through your job, and what you should do to stay covered.
First, you need to find out exactly how long you can keep your current job-based coverage. Typically, your coverage should last until the last day of the month in which you were laid off. So if you were laid off on March 3, you should still be covered until the 31st. If were laid off on March 30, again, you would be covered until the 31st. Rarely, your coverage will end sooner or last longer, but in any event, your employer's Human Resources department will know when your coverage is scheduled to end. Don't be shy -- ask them!
Next, you need to find new coverage. If your employer has at least 20 employees, you are most likely eligible for COBRA continuation coverage. COBRA allows you and your family to stay on your current plan for an additional 18 months.
Your employer has 30 days to notify your current health insurance plan's administrator that you've been laid off. The plan must then notify you within 14 days of hearing from your employer that you are eligible for COBRA coverage. Once you receive this plan notification, you have 60 days to elect COBRA. Even if you wait until day 60 (not recommended!), you can make your COBRA coverage retroactive to the date your current coverage ends if you wish, so long as you pay the appropriate premium.
Speaking of premiums, you may be wondering how much COBRA coverage costs. Under COBRA, the employee is responsible for the full premium, including any amounts formerly subsidized by their employer, plus a 2% administrative fee. Fortunately, a new law provides government subsidies to individuals who have been laid off between September 1, 2008 and December 31, 2009. This subsidy will pay for 65% of your COBRA premium for up to nine months. You will be responsible for the full premium thereafter.
If you work for a small employer or are not eligible for COBRA for some other reason, you may be eligible for continuation coverage through a state-based program. Your state's department of insurance will have more information about state continuation coverage.
If continuation coverage is not a viable option for you, you may be able to buy an individual insurance policy, especially if you are healthy. You may want to read more state-specific information on individual policies and other health coverage options.
Also, people with pre-existing health conditions should not forget about high risk pools. Most, but not all states have one. They can be expensive, but most likely less expensive than paying for all of your medical care out-of-pocket. This is also a good way to make sure your pre-existing condition stays covered.
