Ask the Health Insurance Expert
QHow long does it take for your health insurance to be terminated after you are laid off?
Your coverage terminates on your last day of employment, which is why you should consider buying health insurance through COBRA until you find a new job with coverage.
COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, which Congress passed in 1986 to provide protection to workers who lose their group health plans after they resign, are laid off or fired -- as long as the termination wasn't for "gross misconduct." The term, "gross misconduct" is open to interpretation, but in most cases people who are fired are able to get continued coverage.
Your employer must notify the health plan administrator within 30 to 60 days after you leave the company. Once alerted, the plan administrator has 14 days to notify you about your right to elect COBRA. You and your family have 60 days to decide whether to purchase COBRA, and once you pay the premium, the benefits are retroactive to the date you lost your health insurance coverage.
You and your dependents (if they were covered by the plan) can get coverage up to 18 months, but you have to pay the premiums yourself. Unfortunately, the coverage is expensive. Workers who lost their jobs between Sept 1, 2008, and May 31, 2010, are eligible for a premium subsidy for 15 months under the American Recovery and Reinvestment Act of 2009. So far that eligibility period has not been extended.
You don't have to purchase COBRA coverage. Another option is to buy individual health insurance or a short-term health insurance plan to cover you until you find a new job with health coverage. Get health insurance quotes online to compare. Even if you decide to forego COBRA, your spouse and children can continue to receive benefits under COBRA as long as they were covered by the health plan when you were employed.
Read more to know your COBRA rights.