Losing a Job: Ten Things You Can Do to Make It Less Painful, Part 3 — NMBankruptcyBlog.com

health-care costsUnemployment rates continue to frighten most anyone who is watching. People are losing jobs, and it can be horribly difficult to find a new one, especially one that approaches the salary and benefits of an earlier one.  Times are different and they are difficult.

One of my favorite legal self-help publishers has an article I’m running in a series, on Tuesday  1/19, 1/26, 2/2, and 2/9.

Ways to keep a job loss from becoming a financial disaster, Part 3.

4. Continue your health insurance. If you had health insurance through your employer, complete any necessary paperwork to keep those benefits in place. Under the Consolidated Omnibus Budget Reconciliation Act (commonly known as COBRA), you can keep employer-based group insurance coverage for yourself and dependents for up to 18 months (sometimes longer). You will have to pay the full premium for coverage unless you are eligible for a partial subsidy: Those whose employment is terminated involuntarily from September 1, 2008, through the end of 2009 may qualify for a subsidy that pays 65% of the cost of COBRA for up to nine months. (For more information, see New COBRA Rules: Stimulus Package Subsidizes Continued Health Insurance.) Paying the full premium can be a real financial strain, but it should cost significantly less than buying your own individual policy. Your health plan should send you an “election notice” within 45 days of your job loss, and you have 60 days to decide whether to elect COBRA continuation coverage. If you do elect to continue your coverage, you’ll have 45 days after your election to pay the initial premium. If you don’t choose the continuation coverage and your coverage lapses, you may have difficulty getting new insurance. (For more information, see Your Rights When You Leave a Job.)

5. Cut your expenses. List your monthly expenses and determine which you can cut, or at least reduce, immediately. Good candidates for cutbacks include restaurant meals, premium cable subscriptions, clothing purchases, house cleaners, gardeners, and any other nonessential purchases. Remember that you can resume your normal spending habits once you’re working again.

6. Prioritize your debts. If your cash reserves are short and you are unable to pay certain bills, make sure to pay the essential ones first. Don’t risk losing your house, being cut off from medical care, or getting in trouble with the IRS when you could have let less crucial bills — such as your cable TV bill or your magazine subscriptions — slide. Also consider contacting your creditors to ask for a short-term hold or reduction on your payments. When discussing alternative payment arrangements with creditors, be sure to ask if the new arrangement will negatively affect your credit rating. (For more information, see Which Debts Must You Repay?)

Reprinted with permission from the publisher, Nolo, Copyright 2009, Nolo

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