Saturday, September 27, 2008

Preserving health insurance when you're out of work

(AP) -- QUESTION: I just lost my job. What are the best options for preserving some form of health insurance?

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.