Tag: health insurance

If you’re planning to leave a job that provides healthcare insurance – or if you think you may get laid off soon – it is good to know what your options are.

If your company has an internal website with benefits information, check it out. Some companies even have internal sites with sections for “leaving the company” that can help you plan ahead. Find out what happens to your health insurance when you leave. Does it terminate on your last day of employment, or are you covered for the duration of the last premium paid?

In the United States, the Consolidated Omnibus Budget Reconciliation Act (most commonly referred to as COBRA) allows most employees to continue their employer-provided healthcare insurance by paying for all of the premiums themselves, plus a 2% administration fee.

If your employer currently pays for a percentage of your premiums, you might be shocked at how expensive COBRA can be. Despite the cost, before the Affordable Care Act (ACA) marketplaces opened in 2014, COBRA was the best option for many people to have continuous coverage between jobs.

Now there is another option when you lose your employer-provided coverage: purchasing healthcare insurance as an individual from state marketplaces. Marketplaces should offer multiple plans with different levels of coverage that correspond to the cost of the premiums. Don’t skip coverage because you think you can’t afford the premiums – you might qualify for a subsidy. You can find the basics at www.healthcare.gov and link to your state’s marketplace from there.

If you want to enroll in COBRA or a state marketplace plan, you have 60 days to enroll (sometimes 90 days for COBRA) from your last day of coverage.

If you have a Health Savings Account (HSA) or) through your employer-provided plan, it is yours to keep even after you leave. You may be able to use remaining funds to pay for COBRA or marketplace plan premiums.  

If you have a Flexible Spending Account (FSA), you will lose those funds after you leave, so use them up! This is a great time to get your eyes checked, buy new glasses, get prescription sunglasses, get contact lenses, see a specialist, or stock up on over-the-counter medicine. If you choose to continue your coverage with COBRA, you can keep your FSA funds, but you can’t apply them towards your premiums.

Even if you’re leaving a job on your own terms, it can be stressful to think about healthcare coverage, especially if you have dependents. Taking a little time upfront to research your options and know how much you will need to pay for premiums can alleviate some of those worries. If you wait until after you quit, just don’t wait too long, since you have a limited amount of time that you are eligible for COBRA or a marketplace plan.