HOUSTON (AP) - Bill Peterson was on short-term disability undergoing experimental chemotherapy for a particularly deadly form of melanoma when he learned he had been laid off from Enron Corp.

Eight months later the 55-year-old former Enron Net Works employee uses morphine patches to stave off the pain. His wife, Cathy, a licensed vocational nurse, tends to his needs and is scrambling to gather enough money to pay for his funeral when the time comes.

The abrupt layoff and loss of company-provided disability benefits and health and life insurance in December forced the Petersons to sell their suburban Houston house, pickup truck and car to keep up his treatments.

They managed to pay thousands of dollars in medical costs before winning appeals through Enron to get their insurance reinstated, but lost everything along the way.

Peterson said he harbors no bitterness toward the company he once proudly called his employer. That bitterness is reserved for whoever is deemed responsible for questionable accounting that fueled Enron's stunningly quick downfall.

But the Petersons hope that possible reforms that have emerged from the energy firm's collapse include measures to protect workers on short-term disability from mass layoffs like those at Enron and, more recently, WorldCom Inc.

"That would be very beneficial to people who are already down and have no opportunity to go out and find employment," Bob said. "I tried to get a job, but my physical condition and my mental state were not so I could interview properly."

It would take an act of Congress to rewrite regulations in the Employee Retirement Income and Security Act, or ERISA, to prohibit companies from laying off workers on disability, said Jerry Reisman, an employee rights expert with Reisman Peirez & Ressman in Garden City, N.Y.

"It's incumbent upon Congress to protect employees who have short-term disability benefits that have been discontinued by reason of bankruptcy or some other event" if the employer provided the benefit, he said.

Various ERISA reforms proposed in Enron's fallout have largely focused on giving workers more control over 401(k) accounts. Enron matched 401(k) contributions with company stock, so workers whose accounts were heavily loaded with Enron stock watched their holdings evaporate when shares became worthless in the company's collapse.

Financial partnerships and accounting practices now under investigation by the Justice Department ( news - web sites) and federal regulators fueled Enron's descent into the largest corporate bankruptcy in U.S. history on Dec. 2.

Diana Peters, a former Enron worker who serves on the Employee Related Issues Committee related to the bankruptcy, said she is pushing for a change in the U.S. bankruptcy code that would ensure workers continue receiving short-term disability benefits in the event of a mass layoff prompted by Chapter 11 or Chapter 7.

She said her work on the committee, appointed in March by the U.S. trustee in the bankruptcy case to give employees a stronger voice in the case, is separate from her work related to short-term disability benefits.

"This is something I just felt compelled to do because my heart deeply goes out to them," she said. "I could have been in the same situation with my husband, who has a brain tumor and is off work."

But an ERISA amendment would have further reach, said Lowell Peterson, an employee rights attorney with Meyer Suozzi English & Klein in New York who represented laid-off Enron workers in their battle for severance pay. He is not related to Bill and Cathy Peterson.

"You could amend the bankruptcy code to say you can't cut off disability as a result of bankruptcy," he said. "But an amendment to ERISA would help if layoffs happened outside the context of bankruptcy."

Bill Peterson went on disability in August 2001 and the benefit was supposed to last a year. He and his wife — who have moved in with her sister in Hendersen, about 120 miles east of Dallas — said they hope to see some effort to promote legislation to protect workers in his situation when companies fall.

"The terrible part was trying to get our insurance reinstated," Cathy said. "How to you repay groveling for your medical insurance when you have cancer? I don't know."