M.S. from Omaha, Neb., writes:
Q After 12 years with the same company, I am losing my job due to a merger. I have no other job lined up. Should I elect COBRA health and dental coverage? Are there any tax benefits?
A Electing COBRA coverage is usually worthwhile for em-ployees in your situation, especially if you have no other means of health coverage through your spouse or elsewhere.
Typically, you pay the COBRA coverage yourself. Companies can charge you the full premium under their group plans, plus a 2 percent administrative fee. You can hold onto this coverage for up to 18 months. In many cases, terminated employees forgo dental coverage, which is often viewed as nonessential.
The good news: Insurance premiums you pay under COBRA qualify as deductible medical expenses. The bad news: You can deduct medical expenses only once they reach 7.5 percent of your adjusted gross income. So while you probably haven't claimed a medical deduction in recent years, you'll face a greater chance of qualifying in a year your compensation is lower and you're paying for COBRA coverage.