How your employer's bankruptcy affects your insurance coverage
Chapter 7 bankruptcy
If your employer files for Chapter 7 bankruptcy, you no longer have any insurance coverage through them. If you have unpaid claims, insist that the insurance company provide you with a proof of coverage statement before the company closes. If you have money in a healthcare flexible spending account, contact human resources to ensure that you will be compensated for those funds.
Chapter 11 and still employed
Chapter 11 bankruptcies allow companies to reorganize, and you may be able to keep your insurance coverage. It is up to how the employee files their reorganization plan with the courts. If they choose to drop insurance coverage, they must give you 60 days' notice, giving you time to find new insurance, get added to your spouse's plan or make another choice.
Chapter 11 and laid off
If your employer files for Chapter 11 bankruptcy protection and lays you off, if they had more than 20 employees, you are eligible to continue your healthcare insurance coverage under COBRA. In most scenarios, that coverage will last 18 months or until you find a new job. In other cases, the coverage lasts for 36 months. If you had life or disability insurance and lost your job, that coverage ends on your last day of work. Sometimes, the insurance company may let you roll it into an individual plan.
It is scary hearing that your company has filed for bankruptcy. The type of bankruptcy they declare and future job status will determine your coverage.