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If I lose my job, how do I maintain health insurance coverage? I have been diagnosed with cancer and my employer only has to hold my job for 12 weeks.

If you lose your job, you can continue coverage through your employer's group health plan but you'll have to pay the full premium out of pocket.

This option is often referred to as COBRA coverage, named after the landmark Consolidated Omnibus Reconciliation Act. Congress passed the law to give families a health insurance safety net if they lost employer-sponsored coverage through divorce, death or job loss. The federal law applies to employers with at least 20 employees, but many states have passed their own mini-COBRA laws that apply to employers with fewer than 20 employees.

Under COBRA, you can continue to get coverage through your former employer's health plan for up to 18 months after losing your job. Although you'll have to pay the premium, this cost will be worth it if you have a serious illness because you will not be able to buy an individual health insurance policy to cover cancer treatment when you have already been diagnosed.

Once the 18 months of COBRA coverage runs out, you then can qualify for a "guaranteed issue" plan, which cannot exclude pre-existing conditions from coverage. At that point, check with your state insurance department to see which companies offer guaranteed issue plans and contact those companies directly, or work with a insurance agent. You can't get health insurance quotes for these types of plans online.

In the meantime, if you lose your job, your employer or the health plan administrator should send you a COBRA enrollment packet. You then will have 60 days to elect COBRA coverage. Contact your employer or the health plan if you don't receive enrollment materials soon after you lose your job.

Besides continuing vital health insurance coverage if you lose your job, electing COBRA protects your rights in the future under the federal Health Insurance Portability and Accountability Act (HIPAA), another landmark law. Among other things, HIPAA guarantees that if you maintain continuous group health coverage, without a gap of more than 63 days, you don't have to sit out a waiting period because of a pre-existing condition under a new group health insurance plan if you find a new job.

For more, see know your COBRA rights and state-specific laws for COBRA.

Last updated: Jul. 6, 2011
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