The fact is, when you are laid off, you can lose your health insurance immediately, despite the so-called protections of COBRA. The only thing COBRA does is entitle certain qualififying persons (most people who are laid off) the opportunity to continue their health insurance under the same group plan they were eligible for when they were employed.

I've blogged here before about how to maintain health insurance while unemployed--essentially, you should 1) elect COBRA immediately because the Federal Stimulus subsidy means you will have at least 65% of the premium covered for 9 months, and 2) apply for the Massachusetts Medial Security Program and other resources which will subsidize an additional 80% of your out of pocket expenses through a reimbursement as long as you remain unemployed and enrolled in the MSP. These are generous benefits that all unemployed, eligible persons should take advantage of immediately.

Immediately is the key word. I thought I understood it all, but the learning process continues as I recently ran into difficulty confirming future doctor's appointments for my kids. I was told my insurance had been canceled immediately upon termination from my last job--before I even received the paperwork for COBRA. This is at the discretion of the employer.

Technically, under COBRA, you have the right to choose whether to elect continuation coverage for 60 days following termination. Then, you have 45 days to make the first payment. In every employer I've worked for in the past, this was explained to laid off employees as "don't worry about health insurance; you have 3 1/2 months before you'll have to pay anything." But it's not that simple. The employer may decided to wait 60 days--during which time they are actually continuing to pay for your health insurance and the insurance company does not even know you have been terminated. But they are not required to be that generous. If instead, they terminate your coverage immediately, then you will lose health insurance on the day you lose your job.

I was advised by my insurer, Tufts, to simply tell the doctor that I've applied for COBRA...hopefully that will be sufficient to enable us to continue receiving medical care until my former employer processes the paperwork of my COBRA election form and reinstates my health coverage. But it illustrates how important it is for you to NOT wait and to IMMEDIATELY make your COBRA election on the day you are laid off. The law only provides you the opportunity to purchase health insurance; it does not automatically provide continuity of coverage. As I've noted before, given the Federal Stimulus benefit, this is a "no-brainer" now, but that benefit will go away in a few months and then, once again, the unemployed will face the very real fear of the immediate loss of health care and difficult choice to being paying over $1000/month--while unemployed--to keep their families covered.