A problem that might make the newly unemployed a little sick

If your company is closing and you've got medical bills not yet paid by your health insurance, you have reason to worry. The Wall Street Journal is reporting on what happened to the employees of Archway & Mother's Cookie Co., which announced in October that it was closing immediately. The employees quickly went to the doctor, thinking their health insurance would pick up the tab. It did not.

What they did seems logical, and I'd probably want to get my medical needs taken care of quickly too. But in this case the company was self-insured and didn't have enough money to cover all the unpaid medical bills and the company's other debts when it filed for bankruptcy. Workers weren't even eligible to purchase health insurance under Cobra provisions, because when a company terminates the insurance, there is no such option.

There's really nothing the employees can do about their medical costs, as this is just one unforeseen problem lurking amid the economic crisis. I can only offer this advice: If your company announces it is closing or entering bankruptcy, check with human resources about your health insurance coverage before you go to the doctor. Of course, there may be conditions for which you need immediate treatment, insurance or not. But if you've got a medical problem that can wait, it makes sense to find out if you'll still have insurance coverage or if you'll have to look for other options.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.