You can usually hang on to your insurance for 18 months after losing your job, as long as you weren't fired for serious misconduct. If you're covered by the Consolidated Omnibus Budget Reconciliation Act -- or COBRA -- you stay insured by paying both the employee and employer share of the premiums. Your employer can offer you a longer coverage period in your severance package if he chooses.
COBRA doesn't cover you if your employer had fewer than 20 employees on half of last year's business days. If the company employed part-time workers, each worker counts as part of a full-timer: for example, 18 full-time employees plus four people working 20 hours a week would equate to 20 people working a 40-hour week. If you qualify for another group plan or for Medicare after signing up for COBRA, your COBRA coverage ends, even if the other plan isn't as good.
The Employer Plan
COBRA doesn't provide health insurance; it only lets you stay on your former employer's health plan, assuming the plan still exists. If the company shuts its doors, you aren't covered by COBRA, because there is no health coverage plan for you to continue. Likewise, if the business simply decides to stop providing health benefits for employees, your coverage disappears along with your former coworkers'. Assuming you're eligible for COBRA, however, you have to keep paying the premiums regularly to maintain COBRA coverage. With no employer removing premiums from your paycheck, it's your responsibility to keep track of when the payments are due.
If you or one of your family members becomes disabled while covered by COBRA, you may qualify for an 11-month extension of health insurance. The health plan can charge up to 150 percent of the regular COBRA costs during the added months. Your family members can get an extra 18 months of coverage under certain circumstances. These include your death or divorce -- if that would otherwise cost your spouse her coverage -- or a dependent child growing old enough to lose coverage under your policy.
If the health plan gives workers the option to switch to an individual policy, you can do so at the end of COBRA coverage, thereby extending your benefits indefinitely. Some states protect your benefits longer than COBRA: New York employees, for instance, may qualify for up to 36 months of coverage, even if their employer didn't have enough workers to qualify for COBRA coverage. If you qualify for Trade Adjustment Assistance because of losing your job to foreign competition, you may be able to prolong your health insurance coverage.
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