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<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Sunday, September 21, 2008 Finance Q&A: Job loss and health insurance Question: I just lost my job. What are the best options for preserving some form of health insurance? Answer: Don't confuse "best" with "affordable." One of the first lessons many unemployed people learn is how expensive health insurance really can be. If you're lucky, you can switch to coverage from the job of a spouse or family member. For most people, though, the best option lies with coverage provided under the Consolidated Omnibus Budget Reconciliation Act, or COBRA. Employee-sponsored coverage generally ends when a job does, although some people may get a few extra weeks because their company paid premiums through the end of a month, said Cheryl Fish- Parcham, deputy director of health policy at Families USA, a nonprofit organization that advocates for affordable health care. COBRA allows people to continue the plan they had at work after that coverage ends. The former employee must make a decision within two months of leaving the job, and he or she will pay a hefty price to keep the coverage going. Full premiums can average out to about $400 a month for individuals or $1,000 for families, said Karen Pollitz, a research professor at the Georgetown Health Policy Institute. Employers normally pay a large chunk of that cost for their employees. People who become unemployed wind up paying all of it, plus a small administrative fee. A COBRA plan's price often becomes a "conversation stopper" for someone who just lost their income, Pollitz said. Studies show only 20 percent of people who become eligible for COBRA plans actually use them. People who opt for a COBRA plan need to know whether they will be billed for premiums or if they're expected to make them without the paperwork. Read the notices carefully because your coverage could be dropped if you miss a premium payment, Fish-Parcham said. COBRA plans last 18 months but can stretch longer for people with disabilities or special circumstances. That act applies to employers with 20 people or more. State laws generally provide coverage guidelines for businesses smaller than that. Some people may find other health coverage through a trade group or association or possibly their church. But for many, COBRA plans are the best option. The individual market can be "pretty grim," Pollitz said. Individual policies often exclude pre-existing conditions like diabetes, and they can be even more expensive than the COBRA option. "Be very careful if you decide to go with something cheaper that you're buying on the individual market because you really don't have the same protections," Fish-Parcham said. Associated Press READER COMMENTS Be the first to comment. You must be a registered user and verify your e-mail address to post comments to blogs or articles on HeraldNet. To register, click here. To read other terms and conditions, click here. Log out

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