Keeping Health Coverage After a Job Loss

A federal program lets you stay on your employer's insurance plan, but you might be able to find a better deal on your own.

My company has been laying off people, and I'm worried that I may lose my job soon. If that happens, what will I be able to do about my health insurance? If you lose or leave your job, you usually can continue coverage through your employer's plan for up to 18 months through a federal program called COBRA. You can't be rejected or charged more because of your health, but you may be flabbergasted by the price.

Your policy doesn't change when you make the switch, but the price jumps because you lose the employer subsidy. Employers generally pay about three-quarters of the cost of family health-insurance coverage. The average family plan costs $12,680 for the year, according to the Kaiser Family Foundation, but the average employee pays only $3,354 of the bill. If you get coverage through COBRA, however, you'll have to pay the full price yourself.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.