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How Not to Lose Your Health Coverage

You can stay insured after a job loss—and it's so important that you do.

If you have ongoing health concerns, like diabetes, you’ll definitely want to consider COBRA, says Phil Lebherz, executive director with the Foundation for Health Coverage Education in San Jose, Calif. The reason? You’re already on the plan, so you don’t have to worry about being turned down for a preexisting medical condition.

There are a couple of facts to keep in mind. You have 60 days to enroll in a plan through COBRA. The time period starts either when you receive notice of your loss of coverage, or the date your coverage stops, whichever is later.

Until recently, your charges under COBRA could be as high as 102 percent of the cost of the plan—the extra 2 percent is allocated to administrative costs. If your employer has been subsidizing your premiums, as most do, the price jump can be eye popping. Consider this: the average annual premium for health insurance for a family of four is $12,680, reports the Kaiser Family Foundation.

However, the American Recovery and Reinvestment Bill of 2009—more commonly called the federal stimulus plan—temporarily changes that. If you’re laid off between Sept. 1, 2008 and Dec. 31, 2009, the government will cover 65 percent of COBRA premiums for you and your family for up to nine months, unless you get a new job with employer-sponsored health care or become eligible for Medicare before then. The subsidy is available to individuals with income up to $125,000, and families with income up to $250,000.

Government Programs

Many people migrate to health insurance programs available through the government.

The federal Medicare program, of course, is available once you reach age 65, but Daly was 10 years away from qualifying. Many states offer their own insurance plans, says Karyn Schwartz, senior policy analyst with the Kaiser Family Foundation, and one of them was the answer for Daly.

As his cancer treatments continued, he realized he would be unable to go back to a full-time position. Daly made a radical career shift, applying for a job as a school crossing guard. Once he was hired, he was eligible for the state’s municipal health insurance program, with

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