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Health Insurance

If your company’s health insurance plan offers hospice benefits, you will be able to use those benefits for the rest of your life—or until you reach the plan’s hospice benefit limit. If your plan does not offer hospice benefits, you still may want to keep coverage in that plan as long as possible, both for you and family members. First, check to see if your plan has a "disability extension of benefits." This means that, even though you are no longer covered by the plan generally, your illness may continue to be covered.

If there is no disability extension, take advantage of the Family and Medical Leave Act (FMLA) if you can. All companies with 50 or more employees are required to offer FMLA. This law gives you the right to take up to 12 weeks of unpaid leave and stay on your employer's healthcare plan during your leave. You will have to continue to pay your portion of the premium. After your leave is used up, you may be able to extend insurance coverage further through the Consolidated Omnibus Budget Reconciliation Act (COBRA).

COBRA lets you and covered family members keep health insurance for a period ranging from 18 to 36 months. Companies with 20 or more employees are required to offer COBRA. Your employer must tell you how to take advantage of COBRA if it’s available. Your cost will go up because you probably will have to pay the full premium, including the amount once paid by your employer, but your coverage will be the same as current workers. Family members covered by your plan can decide separately to take COBRA.

There is a program similar to COBRA for federal government workers called Temporary Continuation of Coverage (TCC). Ask your personnel office about this program and request a copy of Temporary Continuation of Coverage Under the Federal Employees Health Benefits Program, Pamphlet RI 79-27. What if your COBRA coverage runs out or you can’t get it because your company doesn’t have to offer COBRA benefits? Check out Health insurance through your state and If you don’t have health insurance.

Health Insurance Through Your State

Your state may have health insurance laws that give people better ways to continue health insurance coverage than private insurance. To find out about your state's programs, go to the Kaiser Family Foundation web site and click your state on the map. You also can check with your state insurance department. For a state-by-state listing, visit the National Association of Insurance Commissioners (NAIC) web site or call the NAIC Help Desk at 816/783-8500.

If You Don’t Have Health Insurance

Here are some programs to check out if you don't have health insurance:

Health Savings Accounts

If you have been contributing to a health savings account, you can withdraw money tax free to pay your "qualified medical expenses" or those of a spouse or dependent children. These expenses include medical care and services, dental and vision care and over-the-counter drugs. You may be able to pay medical insurance costs as well, such as COBRA premiums and Medicare premiums, deductibles, co-pays and coinsurance. The U.S. Treasury Department web site has information about health savings accounts, including answers to frequently asked questions.

Life Insurance

Life insurance through an employer. If you have life insurance through an employer, ask if your policy has a "waiver of premium" benefit. The waiver generally means you won't have to pay the policy's premiums if you become permanently disabled due to illness or accident. If there is no waiver benefit, you may be able to change the policy to a personal policy when you leave your job, but you will have to pay the entire premium yourself.

Life insurance you bought yourself. If you have a personal life insurance policy, find out if it has "accelerated death benefits." If it does, you may be able to get a portion of your policy's death benefits paid before death if you are expected to live for only six to 12 months. However, these benefits may affect your ability to qualify for some government programs, including Medicaid.

If you have a cash-value policy (whole life, universal life and others), you might simply terminate the policy and take the cash value. If you want to keep the policy, you might be able to borrow up to 90 percent of the cash value. But you will have to pay interest on what you borrow and possibly a fee. Call your insurance agent or company and ask how much cash value is in your policy, how much you can borrow, what the interest rate will be and if there are any fees. You don’t have to repay the amount you borrow, but you’ll have to continue to pay interest and the amount your family receives at your death will be lower. Borrowing from a life insurance policy could result in owing income taxes, so you might want to talk with a tax professional when considering this option.

Another possible option is to sell all or a portion of your life insurance policy to a company for a percentage of its face value, generally between 50 and 80 percent. This is called a “viatical settlement” or a "life settlement." The company receives the proceeds from your policy upon your death instead of your heirs. A life expectancy of two years or less usually is required. Check out potential buyers of your policy very carefully before taking action. Talk with several and compare costs. For information about these settlements and tips for selling a life insurance policy, read the National Association of Insurance Commissioners brochure, Understanding Viatical Settlements. Another information resource is the Life Insurance Settlement Association (LISA). You can contact the association by phone at 407/894-3797.

Long-Term Care Insurance

If you have a long-term care policy, contact the insurance company about your benefits and when they start. If your policy has a "Premium Refund at Death" benefit, be sure your family members and beneficiaries know. They will receive premiums you have paid on your policy up to the time of your death, minus any benefits the policy paid for your care.

Disability Insurance

Disability insurance provides income to people who become sick or hurt and are unable to work.

Disability insurance through an employer.

There are two kinds of employer disability plans:

1. Short-term disability—Some states require employers to pay short-term disability benefits to employees who are unable to work for a year or less.
2. Long-term disability—These plans typically replace between 60 and 70 percent of your monthly income for at least a year if you cannot work. Coverage might even continue until age 65 or for life if you meet the plan's definition of disability. You will have to pay taxes on income you receive from an employer's disability plan.

If your employer provides your plan, it is subject to what's called "coordination of benefits." This means that the amount of your disability check may be reduced if you also receive benefits from Social Security or another state or employer-sponsored program.

Disability insurance you bought yourself. If you have a disability policy from a private insurance company, any money you receive will be free of income taxes and the coordination of benefits does not apply.

A few states, including California, Hawaii, New Jersey, New York and Rhode Island, offer programs that provide income to workers who cannot work due to disability, but whose disability was not caused by work. These programs serve as a safety net, providing some income until a worker can qualify for Social Security Disability Insurance (SSDI). Payment amounts are generally small (a percentage of your salary) and payments are made only for a short time—a year or less. If you live in one of the states with this program, ask a social worker or your HR manager for help contacting the appropriate state agency.