Your Complete Guide to How Health Insurance Works When Switching Jobs
The Gist
When you leave one job and start another, you’ll likely lose that employer-sponsored coverage. It is important to know your options for staying insured during this transition.
Your job change could be a qualifying life event, which allows you to sign up for a new health insurance plan outside of the open enrollment period.
Your employer may sponsor COBRA, a plan that allows you to retain your employer-sponsored coverage even after you’ve left your job.
In This Article
How Does Health Insurance Work When Switching Jobs?
Changing Jobs and Health Insurance: What to Consider First
Tips to Transition Your Coverage
In Short
Transitioning from one job to another can be an exciting but stressful time. One of the biggest causes of concern is whether or not there will be continued health insurance coverage during this period of unemployment.
Fortunately, you have a number of options when it comes to coverage in the midst of a job change. Below, learn your options when it comes to transitioning health insurance after you leave a job, including how to choose the best health insurance and stay covered during the transition period.
How Does Health Insurance Work When Switching Jobs?
When you leave your position, you’ll likewise leave behind your employer-based coverage. So when you change jobs, what happens to your health insurance? Well, that answer can vary based on your individual situation. For instance, when exactly you lose your current health insurance — and what coverage you’ll transition to — depends on your current plan and future job prospects.
In general, though, here are the different routes you can take when it comes to health insurance when switching jobs:
Changing Jobs and Health Insurance: What to Consider First
Depending on the type of plan you are currently enrolled in, you might be receiving excellent copay and deductible costs that you do not want to lose in the future. Regular doctor’s visits, checkups, hospitalizations, and other consistent medical needs can become quite costly when they aren’t covered by the same plan that you are used to having.
To prevent a spike in personal costs and fees associated with being uninsured, take the following tips into consideration:
Transition to your new job-based coverage: Some job transitions happen fast, and if you are lucky enough to land a new position quickly (or already have one lined up), you might not have too big of a coverage gap to be concerned about. Those who transition to a new workplace within a month of leaving their old job will likely not run into any serious issues.
Temporarily stay covered by your old plan: Your employer may sponsor a policy that allows you to continue getting coverage for a short amount of time after you have left your job (more on this topic later).
See if you’re covered through COBRA: On a similar note, you may be eligible for continued coverage with your old plan thanks to the Continuation of Health Coverage Act, or COBRA. COBRA is a policy that allows employees to continue getting coverage under their employer-sponsored insurance plan for a set period of time. This period of time is temporary and determined by the employer, depending on eligibility.
If you’re currently enrolled in a health insurance plan at work that is covered by COBRA, you have 60 days from your last day of work to apply for and receive continued benefits. Some COBRA benefits last for up to 18 months, but can be expensive. On average, these health plans are four times more expensive through COBRA than when an employer helps pay for them.
Inquire about prolonged coverage under your current plan: If you have anticipated care needs, you may also qualify for special or prolonged coverage by your employer. It is important to set up a conversation with your employer to discuss health options before you officially leave.
See if you qualify for Medicaid: You can also check to see if you’re eligible for Medicaid, a federal- and state-run program that provides no-cost health insurance to those who qualify (the requirements for Medicaid vary from state to state, but in general, you may qualify if you have a low income).
Get a Health Savings Account (HSA): Depending on your health concerns and the expenses associated with those medical needs, you might qualify for a Health Savings Account, which is a special bank account created specifically for medical expenses.
Enroll in health insurance on your own: In a lot of cases, job transitions and the loss of employer-sponsored insurance count as a qualifying life event, which makes you eligible to enroll in a new plan right away. So if you’re stuck without employer-covered care and you want to stay protected with the best health insurance when switching jobs, you likely have the option to find and enroll in health insurance independently.
This may seem like a lot of work — after all, insurance is confusing. But Stride is here to help you find and enroll the right plan for your needs quickly and easily, ensuring that you’re applying for and receiving the benefits that work best for you.
Here’s what to expect when you look for a new plan with Stride:
You’ll answer a few quick questions about yourself (like your age, location, health concerns, and
preferred doctors and prescriptions).
Stride will show you the top plans that match your needs.
Browse the plans and enroll in your favorite.
Tips to Transition Your Coverage
If you’re like many other Americans who have gone through a major employment transition, then you’re probably asking, “If I change jobs, what happens to my health insurance?” Even in the world of virtual workplaces and online opportunities, navigating employer-sponsored health insurance can be a headache to deal with on your own.
Now that you know how health insurance works when switching jobs, it’s time to pick the option that works best for you. What’s most important during this period of change is that you’re not left without coverage for any amount of time — even just a few weeks. Your health is what allows you to continue pursuing job opportunities and achieving your goals, so protecting it should always be first priority.
With that in mind, here are a few tips to help make any changes to your health insurance when switching jobs as smooth as possible:
Speak with your employer directly if you’re interested in temporarily keeping your current coverage. This will ensure that you have all the right information about your workplace’s specific policies and can have all your questions answered.
If you’re transitioning to job-based health coverage with your new employer and want to continue visiting your same doctors, hospitals, and health networks, make sure they’re still covered under your new plan. Otherwise, you may need to inquire about out-of-network care during your transitional period and beyond until you can find new providers that are covered by your new plan.
If you know exactly when you’re going to lose your health coverage, make sure you collect the documentation needed to prove this. Be sure to reach out to your insurance company to send a decertification letter that will state when your coverage officially ends.
