Health Insurance

Despite your termination, you won't have to remain uninsured. Legally, you're certainly entitled to continued health insurance coverage under your company's group plan. Be sure that you thoroughly discuss and understand your company's health care benefits and the duration you qualify for them after your severance period begins. Also be sure to discuss Consolidated Omnibus Budget Reconciliation Act (COBRA) benefits with your company.

The Consolidated Omnibus Budget Reconciliation Act of 1986 requires most employers to offer departing employees continued group health insurance benefits. COBRA entitles you to the same health insurance benefits you had at your company's group rate plus a 2% management fee for 18 months after your termination date. You'll also be paying 100 % of the premiums, which may dramatically increase your cost for the same level health care coverage. The cost might even be lower with another group insurance policy, so it pays to shop around on your own for the time when you'll be footing the insurance premiums. You can also check with your professional associations and recreational clubs, as they often offer discounted coverage to their members.

COBRA doesn't cover everyone all the time. The law doesn't apply to churches and the Federal governments though the latter's employees are covered by Federal Employee Health Benefits Act of 1988, which is similar to COBRA. Even if you are legally entitled to COBRA benefits, you can't claim then in case of dismissal for "willful misconduct".

COBRA only applies to health coverage i.e. medical, dental and vision insurance. It doesn't cover group life and long term disability insurance. Despite that, you can always negotiate with your employer to continue these insurance policies under the same terms as your health coverage. Your employer might consider striking a deal with you regarding the cost of your health insurance coverage. Possibly the company will continue to pay all or part of your monthly insurance fees for an agreed upon period or until you're covered under a new employer's group plan, whichever comes first.

• Firms having more than 20 employees are mandated by law to offer health insurance coverage through COBRA to terminated employees for 18 months. You can request the information on continuance of health and life insurance benefits. It is worth asking if you will be covered for a certain period of time at no cost to you or you will need to pay for this coverage. Sometimes employers will agree to pay for coverage for a limited times as part of severance package.
• Keep in mind that you must be covered under an employer health plan to be eligible for COBRA. If your employer has more than 20 employees but doesn't have health coverage or offers coverage to only certain groups of employees and you're not among them, you won't be eligible for COBRA even if one of the qualifying events occurs, nor will you or your family be eligible.
• If you've voluntarily resign from a job or you are terminated for any other reason than "willful misconduct", you are guaranteed the right to continue your former employer's group plan, under COBRA, for individual or family health care coverage for up to 18 months, at your own expense. In many cases, your families also are eligible for COBRA coverage, sometimes for as long as 3 years.