For some people, the promise of employer-provided health insurance is reason enough to take a job or stay put in one.
But unexpected events — a bankruptcy or sale, for example — can undermine the security of on-the-job coverage and leave both employees and retirees with few affordable options.
Starting in 2014, the Affordable Care Act will make it easier for people who lose their job-based coverage to get comprehensive health insurance at a price they can afford through the state-based health insurance exchanges.
For example, if a company is reorganizing under Chapter 11 of the bankruptcy code and plans to continue operating, the health care plan may change but often continues to operate, said Tom Billet, a senior consultant at human resources consultant Towers Watson.
But if a company is liquidating under Chapter 7, laid-off workers may be in a tougher spot. COBRA is not helpful because there’s no longer a company health plan to buy. COBRA allows employees at small firms to pay the full price of employer-sponsored coverage for 18 months after they are laid off or leave their job.
If that happens, they may be eligible for guaranteed coverage on the individual market. In situations where one company buys another, ‘‘there’s a whole spectrum of possibilities,’’ said Bruce Richards, chief health care actuary for the consultant Mercer.
The acquiring company may continue the same health coverage that employees at the acquired company had, at least for a time, or it may merge the new employees into the acquiring company’s health plans. ‘‘It could be better or worse than their current employer’s plan,’’ Richards said.
Although active employees face uncertainty when a company changes hands or goes bankrupt, retiree health coverage may be particularly vulnerable, specialists said.
Retirees 65 or older can rely on Medicare and a Medicare supplemental plan to fill in coverage previously provided by their retiree medical plans. Workers and early retirees will have more options in 2014 when the state-based health insurance exchanges begin selling comprehensive coverage to people who don’t have access to health insurance elsewhere.
Those with incomes up to 400 percent of the federal poverty level may be eligible for premium tax credits to help defray the cost.