Closing the doors and health insurance

[kyleclark]

What is the name of your state (only U.S. law)? New Jersey

I'm not very well versed in these matters, I want to know what happens to my health insurance if my company just "closes the doors", "goes out of business" or files for bankruptcy. We are a national company and have 45,000 employees. I have money deducted each week to pay towards the insurance. This is a big concern as one knows a major illness without insurance could wipe you out. Would my insurance cease the day operations close or is there another scenario?

Thanks in advance,
KyleWhat is the name of your state (only U.S. law)?What is the name of your state (only U.S. law)?

[ecmst12]

That would depend on far too many factors for speculation. However if the company does go completely out of business, it is likely that Cobra will not be an option.

[cbg]

I cannot think of any circumstances whatsoever under which your employer-sponsored insurance would continue if your employer went out of business.

[ecmst12]

Oh yes but it's a question of WHEN the coverage would end (not IF) and how much notice the employees might get....and there is just no way we could know that.

[cbg]

Okay, from that perspective I'll agree, to a point.

But having been through more than one business closing and having been responsible for the shut down of the benefits programs in general, I have to say that there's only about one chance in a hundred thousand that coverage would continue one minute beyond the last day the business is open - and even in that unlikely event there is NO chance that it would last beyond the last day of the month in which the business closed. It might end earlier. But while an insurance carrier MIGHT be persuaded to continue coverage till the last day of the last month of the business, there is NO chance that they will continue it later - and there CANNOT be COBRA unless there is a policy for active employees. No active employees - no COBRA - that is a given.

[ecmst12]

What about notice? Would this fall under WARN?

[TinkerBelleLuvr]

Originally Posted by cbg

Okay, from that perspective I'll agree, to a point.

But having been through more than one business closing and having been responsible for the shut down of the benefits programs in general, I have to say that there's only about one chance in a hundred thousand that coverage would continue one minute beyond the last day the business is open - and even in that unlikely event there is NO chance that it would last beyond the last day of the month in which the business closed. It might end earlier. But while an insurance carrier MIGHT be persuaded to continue coverage till the last day of the last month of the business, there is NO chance that they will continue it later - and there CANNOT be COBRA unless there is a policy for active employees. No active employees - no COBRA - that is a given.

What happens if the business is bought out by a new buyer and they clean house?

[cbg]

WARN is a whole separate issue which affects wage and hour only, not benefits. WARN does not require notice in all situations but IF WARN applied and IF proper notice was not given, the employees affected would be due pay, but not benefits.

IF the business is bought up, remained open, and employees were laid off, that would be a whole different ball of wax. But the poster specifically asked about the employer closing its doors, and that's what I responded to.

[floradelaluna]

This won't be helpful to you; it's just an emotional vent. Thank you for posting your question, because it has helped me put things in perspective. We are self-employed and I am hopping mad (and have been for years) about individual insurance. I won't go into all the ugly, ugly things I know they can do, and I just made application...AGAIN...trying to get something better and they put me through the blender and turned it up high. Anyway, I keep seething because we are not "employed," but you have reminded me that nothing is certain and we're not the only ones with an imperfect situation!