BY IRENE CARD and BETSY CHANDLER
YOUR HEALTH INSURANCE
What happens to your health insurance when your employer goes out of business? This is a question we are hearing too frequently of late.
When the employer ceases to do business, the "group" no longer exists and therefore neither does the health insurance.
Can you pay the premium and continue benefits under the COBRA law or the NJ Continuation law (also known as mini-COBRA)? No. Like we stated above, there can be no group health insurance when there is no business. NJ Continuation is for businesses with less than 20 employees and it mimics COBRA, which is a federal law for businesses with 20 or more employees. Both of these laws allow you to continue your health insurance for a specified period of time when you lose your job.
When your employer goes out of business it is really bad news. Aside from losing your job and hoping that you can collect unemployment to tide you over, all too often the employer is in the stages of declaring bankruptcy and the employee doesn't find out about the bankruptcy until it is too late. Health insurance is a major expense for any business and when money is tight, sadly, many employers just don't pay the premium.