Health insurance and losing your job

What happens if you lose your job?

The official national unemployment rate has been above 9% for a long time and, when you look beyond that percentage, you find rather more people who longer claim benefit and therefore are not counted. The fear of unemployment colors everyday life, particularly if your family depends on the health plan offered as part of the pay package. Even though you may have to contribute toward the cost of group membership, this is still significantly less than the cost of an equivalent policy from a private health insurance company. So what do you do if the job suddenly disappears?

The first step is not to panic. There are other jobs and it's possible you may be able to find another position with similar benefits. Even if there's a delay, does you spouse or partner have health insurance cover? If so, you might be able to transfer to that plan. Even if this is not a right, employers will usually allow family members to buy in. That way, even if you have to make do with a low paid job as a filler, you can still get cover. It may also be worth looking at whether your membership of any clubs or religious groups comes with the option of a health plan. Talk with the membership secretary to see what benefits might be available.

We then come to what is supposed to be the official safety net. This was introduced in the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and it gives ex-employees the right to buy into the plan they just left so long as it has twenty or more members. In effect, you get continuity of cover but the price is usually the problem. As an employee, you only paid a small percentage. As an ex-employee, you pay most of the cost, including the employer's contribution. This can be a lot more expensive than you were expecting although, in most cases, the total is still less than buying the equivalent plan from a private health insurance company. You get this supposed benefit for up to eighteen months so long as you were not terminated for gross misconduct. Sadly, most people find they cannot afford the payment if they remain unemployed. The moral of this is either not to get terminated or find alternative employment as soon as possible. Although you will be able to use this site to find affordable private health insurance, the premium rates are only really affordable if you are in paid employment.

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