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Health Coverage After A Lay-Off

Recently unemployed workers have to fight off the out-of-work-blues by taking care of the paperwork that can impact their life after a lay-off. No matter your stress level, as part of your personal checklist once you get the news, you should ask your Human Resources department if you are entitled to any severance and when your health benefits will expire. Depending on the company, some plans expire the day you are laid off; others may continue until the end of the month. If your employer is sympathetic, you might be able to ask for extended health benefits as part of your severance package.

Next, be sure to get a Certificate of Creditable Coverage. This document proves that you were covered during a specific period of time and helps you to receive continuous coverage for ongoing medical treatments. Without it, you might be subject to a new waiting period before coverage would be offered for pre-existing medical conditions. If your spouse has an employer-sponsored health plan, enroll in this program if you can. Under the Health Insurance Portability and Accountability Act (HIPAA) you can do this without waiting for the next enrollment period, but you will need the Certificate mentioned above and you’ll need to apply for this special enrollment within 30 days of losing your previous health benefits.

Laid-off workers who are single or do not have the option for spousal coverage can sign up for COBRA—the Consolidated Omnibus Budget Reconciliation Act—which means you have the right to extend your current health plan for up to 18 months after you are laid off (this holds true for those who worked for an employer with more than 20 people). In December 2009, a new law was passed in New York State which extended this coverage up to 36 months.


Until recently, a laid-off employee was fully responsible for his or her COBRA premium, but the government stepped in at the end of last year and as part of the American Recovery and Reinvestment Act (ARRA) changed this so that an individual would pay 35 percent of their premium and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. The bad news is that this program may end on the last day of February 2010 if the government doesn’t approve a new extension.

Of course, you can always purchase coverage from a health insurance company or through an agent who represents an insurance company. You might try consulting with the licensed agent you work with on your home or auto insurance to see if it’s possible to identify a plan that meets your needs, but is still less than COBRA. Don’t forget to consider obtaining coverage through a group health insurance program such as a professional/trade association, college alumni association or a religious organization. Their pricing is typically less costly than individual coverage.

Remember that employers make choices that are business—not personal. Take immediate charge of the paperwork for unemployment, health insurance and other benefits so that you can focus on your job situation by moving forward and don’t look back.

More articles filed under Professionals Guide,Special Series

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