The Layoff Survival Guide
John Rossheim | Monster Senior Contributing Writer
Don’t fool yourself: You risk disaster if you allow health insurance to lapse between jobs –– even if it’s only for a few weeks. The federal COBRA law, which gives you access to your ex-employer’s group insurance plan after you leave the company, may be the best insurance bridge. Alas, there are major catches. You must pay the premiums, and the insurance will evaporate if your ex-employer goes out of business or drops its group health coverage.
So you may be forced to buy private insurance, which could offer inferior coverage. When you receive an offer for your next job, “bargain with the new employer to start your insurance” and waive the standard waiting period, advises Meena Patel, former human resources director and associate general council for Goinvest.com Inc. of Santa Monica, California; the company filed for Chapter 11 bankruptcy in late 2000.
As an employee, you’ve earned the benefit of having your employer pay unemployment insurance premiums. This is no time for misplaced pride: When you file for unemployment payments, you’re making an insurance claim, not asking for a handout.
“People should apply quickly,” says Gregory. There may or may not be a waiting period in your state; call the unemployment office immediately to find out how and when to file a claim in your state. Also find out whether any severance payment you receive will disqualify you from collecting unemployment. If you do collect, the payments may only replace a small portion of your salary, but they’re still worth the trouble of the paperwork.
If you’re leaving a business that’s in trouble, chances are your company stock and options aren’t worth nearly what they were six months or a year ago. But that’s no excuse for avoiding the task of managing of these complex financial instruments; there’s just too much money at stake.
“Speaking to colleagues isn’t always the best source of information,” says Scott Price, principal of Scott B. Price & Co. of San Francisco, a tax advisor. For one thing, different people in the organization may find themselves in different situations with respect to option strike prices, tax liabilities and so on. Also, after you’ve left the company, additional rules come into play. For example, in most cases, former employees have just 90 days from their termination day to exercise their options, according to Price.
Although many people who have accumulated options at dotcoms “have the opportunity to make a lot of money,” they can stumble, Price says. Take our advice and spend a few bucks on a financial advisor well-versed in the intricacies of employee stock options. Options may not make you worth your weight in gold, but they could turn out to be the silver lining in the cloud that’s hanging over your career.
If your concerns haven’t been addressed here, perusing the Web is a great resource.