The majority of Americans who have health insurance are getting it through their employer. Often, the possibility of being able to get health insurance is the biggest reason why a person seeks out a job with a certain company. When that company suddenly goes out of business, this will have a major impact on the lives of the employees. If this happens to you, there are some things you need to know about how your employer sponsored health insurance will be affected.
If an employer offers any kind of health insurance to it’s employees, it will be a form of group health insurance. Most offer a HMO type plan, but it’s possible that some will go with a PPO instead. The purpose of having a group plan is so that the cost of medical care can can be spread out across the premiums of hundreds of people who are covered by the insurance plan. The size of the group has an effect on the cost of the premiums paid by everyone who has this particular health insurance plan. Now, if the company goes out of business, this destroys the group that was once covered by a nice health insurance plan. Your employer sponsored health insurance will cease to exist.
If a company is having serious financial problems, it is going to try and cut expenses. Unfortunately, some will try to save some money by not actually paying the premiums on the insurance plan. If you have a strong suspicion that your company is going to file for bankruptcy, you should make a call to your insurance company. Find out what date the insurance has been paid up to. It is better to discover that you no longer have health insurance from a phone call like this one, than to find it out after you’ve been admitted to the hospital for a serious injury or illness.
When you first become unemployed, you might receive information from something called COBRA. In short, COBRA is a way of continuing the health insurance plan that you used to have through your employer before you lost your job. This can work if your company is still in business. But, if your company filed bankruptcy, and closed forever, then there no longer is any group health insurance to continue. In this case, you will need to look for an individual health insurance plan, at least until you find a job with another company that offers group health insurance.
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