Staying insured in an uncertain job market.

The Health Insurance Portability and Accountability Act (HIPAA), passed in 1996, left many people with the impression that if they lose or leave their job, their right to get another policy is guaranteed. But keeping coverage is a two-step process, and only one in five people who leaves their job takes the crucial first step. The reason? The first step is very expensive, and it's difficult for many people to pay a high premium for health insurance right after becoming unemployed. Because COBRA is so expensive, many people don't take it. That could be a mistake, because only after you have exhausted all of your COBRA benefits do you become eligible to take advantage of HIPAA.

STEP 1: COBRA

Benefits: The Consolidated Omnibus Budget Reconciliation Act (COBRA), passed in the mid-1980s, allows many workers who leave their job to stay on their employer's health-insurance policy for 18 months as long as they pay the premiums themselves. They are entitled to exactly the same benefits they would have if they were working, including the right to select new coverage during open-enrollment periods. Their family can continue with the same coverage as well. The law also mandates the following:

* If you die or divorce, your spouse is eligible for COBRA benefits for 36 months. Children who become too old for the family policy can also receive benefits for 36 months.

* If you are eligible for Medicare after leaving your job but your spouse is too young to qualify for the program, which is the case with many couples, he or she can also continue on your employer's policy for 36 months.

* If you are disabled and going on Social Security disability, you have coverage for 29 months.

Are you eligible? Employees who quit, become part-time employees not covered under their employer's policy, or are laid off or fired for reasons other than gross misconduct are eligible, provided they worked for a large employer. COBRA benefits are not available under the federal law to those who work in firms with fewer than 20 employees; 38 states, however, have mini-COBRA laws that give those employees similar rights.