Protecting Retirement and Health Benefits after Job Loss
If you have recently been terminated from your job or had a reduction in your hours or your pay rate, it could result in a loss of retirement funds and the loss of your health benefits. However, most employees and their families have rights under Federal Law that can help protect those benefits when employment changes.
Most insurance companies will allow you to be added on to your spouse’s insurance plan at any given time. You must have gotten married, had a child, switched jobs, or lost your job/hours. After special enrollment is requested, the coverage must be effective no later than the first day of the month following your request for enrollment. Most employers also offer The Consolidated Omnibus Budget Reconciliation Act of 1985, also known as COBRA. This can help former employees and their families continue their healthcare coverages by paying out of pocket and keeping the same insurance plan.
The Employee Retirement Income Security Act of 1974 (ERISA) provides guidance for employers who have retirement plans. It will give you specific rights to plan information. For instance, If you lose your job, you should first request a copy of your Summary Plan Description (SPD) and ask for an individual benefit statement that will provide specific descriptions of your retirement funds. The Summary Plan Description (SPD) tells you if and when you can collect benefits or how to roll over your 401(k) account to a new employers plan or to an IRA. Sometimes, this is not possible but it is good to ask your former employer. Also, make sure to keep your statements on file and in a safe place!
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