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Keeping health insurance in a shaky job market

Does economic gloom spell health insurance doom? This may very well be the question on your mind.

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In October 2001, the United States economy shed 415,000 jobs, suffering its heaviest blow in 20 years.

In October 2001, the United States economy shed 415,000 jobs, suffering its heaviest blow in 20 years. Since 67 percent of Americans under the age of 65 who have health insurance receive it through an employer, the fear of losing your job is compounded by your fear of losing your health insurance — and your worries about replacing it.

Additionally, health care costs for HMOs are up 26 percent from 2000. Eighty percent of employers polled by accounting giant Andersen say they are considering raising employee contributions for health premiums, or have already done so. "Businesses will likely cut back on benefits," says Andersen's John Asencio.

Because knowledge is one of the best antidotes to anxiety about your health insurance, the following will help you address potential health insurance problems in these shaky economic times.

You lose your job.

If you are laid off or fired from your job, don't panic. You may be eligible to continue your health coverage under a federal law known as COBRA (short for the Consolidated Omnibus Budget Reconciliation Act of 1985).

With COBRA, you can extend health insurance benefits for you and your family for up to 18 months. However, the cost of your insurance will be much higher because you will pay the full amount, plus an administrative fee of up to 2 percent. See Know your COBRA rights. Should you lose your job and you're not eligible for COBRA, or you can't afford the premiums, you may want to consider purchasing an individual short-term health insurance plan to bridge the gap between employer-sponsored health insurance plans. Read The basics of short-term health insurance.

Whichever option you choose, just make sure you don't go uninsured for more than 63 days or you will lose your health insurance portability rights under the federal HIPAA law. (See HIPAA: Your rights to health insurance portability.) The HIPAA law protects you from having to sit out a pre-existing condition exclusion clause when you switch from one group health plan to another.

Your health plan changes.

A shaky economy and sharp increases in the cost of health care can create instability for some employers and health insurers. Employers may have trouble paying employees' health insurance premiums. Employers and health insurers may go out of business. Health plans and insurers merge or are sold. Also, your employer may switch to a more cost-effective health insurance plan for the company, but one that doesn't offer you the same level of coverage. Read Your rights when your health plan changes — for any reason.

Learn how health insurance works.

You don't have a "right" to health insurance, but you have the right to know how it works. Learn the ropes in The basics of health insurance. This story explains the differences between HMOs, PPOs, and POS health plans.

How to buy individual health insurance.

Even if you're not eligible for health insurance under COBRA, you may be eligible to purchase individual health insurance. Qualifying is tricky, though, so it helps if you're informed about your options. Here are Tips for buying individual coverage.

Avoid bogus health insurers.

In shaky economic times, there are always sharks looking to take advantage of consumers. If you would like to know how to tell a health insurer is a fake, read How to spot an unlicensed insurer.

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