Laid Off? You Have 62 Days to Get Health Coverage, So Here's What to Do

Nearly two million American jobs have been lost in the past year, and hundred of thousands of people will likely be laid off or have their hours scaled back in 2009. If you think you might be one of them, know this: You're almost certain to lose your employer-sponsored benefits with your full-time job. That's why you need an action plan, stat. Make sure you know your health-insurance rights and options, because once you get that pink slip you have no time to lose. Here's what you need to do within...

…One hour
You’re stressed and scared, and not in any mental state to make decisions. Take a few minutes to collect yourself and relax as much as possible. Take slow, deep breaths. In the coming days and weeks you’ll have to make a slew of decisions regarding your health care and personal finances, and you’ll need to stay calm.

…One day
Whether security is waiting to walk you out the door or you have time to clean out your desk, grab the paperwork related to your employer-issued benefits. Carefully read over the fine print on your contract and the terms of your health-insurance plan. Then ask someone from human resources:

• Am I entitled to a severance package?
• When exactly will my health benefits expire? (Some health plans expire on the day you are laid off; others might continue until the end of the month.)
• Is there any room for negotiation? (You may be able to exchange severance pay for extended health benefits.)
• Do you have any advice for me? (A sympathetic HR employee can be your best ally.)

Don’t leave without asking for a certificate of creditable coverage. This document includes the dates that your health insurance began and ended, and proves that you were covered during that time. You’ll need this to apply to other health-insurance plans.

…One week
If your health benefits haven’t expired yet, make doctor’s and dentist’s appointments for you and your family if you're due. Refill prescriptions. Try to squeeze in as much essential health care as you can before the expiration date, because it will almost certainly be more expensive once you lose your employer-provided insurance. If your doc is booked, explain your situation and ask to be notified about cancellations. (Don’t overdo it, however. If you get too many unnecessary tests and checkups in a short period of time, your premiums will likely be higher if you decide to buy health insurance on the open market. And if a checkup turns up a serious health problem, you may even be denied coverage altogether.)

Plan to spend down your flexible spending account (FSA), if you have one, on new glasses, cold medicine, acupuncture—on whatever you can, so your former employer doesn't get to keep your hard-earned savings. Unlike health savings accounts (HSAs), which are portable from job to job and roll over, FSAs are always administered by your employer and must be spent by the end of the company’s “plan year” (plus a 2 ½-month grace period).