Making a career shift and changing jobs or companies in pursuit of another opportunity can be a stressful situation. With so much to consider in this decision, don’t overlook the details around your current and prospective employee benefits package, so you’re not left without coverage for a time period. Knowing the specifics and timing before you make decisions can help you avoid situations that may compromise your physical, mental, or financial health.
Understand the rules of your health plan
There are many rules and regulations concerning health plans, some more important for you to remember than others. One key rule to know is when your current plan’s coverage ends. Your health plan’s coverage could end at 11:59 p.m. on your termination date, for example, or possibly the last day of the month after your termination date. These are just two examples of what could be defined in your plan documents. Also remember, rules could be different for each line of coverage in your benefits package, for example vision insurance could end at the date of termination but medical insurance could end at the end of the month.
Plan documents are often available for you to download in your plan’s member account, or you can ask your human resources representative or benefit administrator for this information. Don’t rely on a co-worker or even your supervisor to understand all of the details about your coverage. Consult your HR department as they’re the most reliable and trustworthy source for any insurance-related matters.
If you are leaving a company for a new job elsewhere, be sure to know when your new coverage begins, as well. Companies can have different waiting periods for insurance coverage to kick in for new hires, so be sure to understand if you will have a gap in coverage. If you know what your situation will be, you may be able to plan ahead and avoid paying for some things out-of-pocket, such as prescription refills. By filling active prescriptions before your current coverage ends, you could potentially avoid having to refill before your new coverage begins, saving you money and keeping you on track with your prescribed medications.
What is COBRA and how does it work?
According to the U.S. Department of Labor, COBRA (Consolidated Omnibus Budget Reconciliation Act) gives workers and their families who lose health benefits the right to choose to continue their group health coverage in certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Should you be interested in COBRA coverage, consider which types of coverages you really want to purchase COBRA for as you can pick and choose from the separate product line plans.
COBRA coverage is retroactive active, meaning it can be purchased back to the date you first lost coverage. If you wait 60 days to elect COBRA coverage, you would owe premium for those full 60 days, however, not just from the date you decide to purchase the coverage going forward. If you are 100% sure you will need to elect COBRA coverage, do so right away and pay the first month premium so your coverage gets reinstated faster and that first premium payment won’t be as overwhelming as 60-days worth of premium.
When you receive your COBRA paperwork, take time to read and understand the timeframe in which you must make an election and subsequent payment. You can compare the timeframe for COBRA election to when your new company’s coverage would start. While COBRA benefits are expensive, they are easy to discontinue so you don’t have to continue those benefits once you become covered under another plan.
Other sources of coverage
Whether or not you’re eligible to keep your group health coverage through COBRA, there are other options you may want to consider. Some individuals may be eligible to get health coverage through a spouse’s plan, an individual insurance plan through www.healthcare.gov, or through a government program such as Medicare. Each of these coverage plans have their own eligibility requirements, and pros and cons to consider, as well, so it’s important to weigh all of the options.
Spouse’s Plan
If you’re choosing to go on your spouse’s plan, understand that employers in the United States do have the choice to deny spousal coverage. The Affordable Care Act says that employers can choose to offer coverage for employees and their dependents, but not spouses. According to KFF, 11% of employers offering health plans do not allow spouses to enroll if they have coverage from another source. Inquire with your spouse’s human resources department for further details. Documentation such as a copy of a marriage certificate, Social Security card, or birth certificate may be required.
Individual Insurance Plan
Insurance for individuals is also available through the individual marketplace at HealthCare.gov. To be eligible to enroll in health coverage through the marketplace you:
- Must live in the United States
- Must be a U.S. citizen or national (or be lawfully) present
- Can’t be incarcerated
If you have Medicare coverage, you’re not eligible to use the Marketplace to buy a health or dental plan. Learn more about Medicare and the Marketplace here.
Medicare
Medicare is available for people age 65 or older, younger people with disabilities, and for those with end-stage renal disease. Medicare has two portions: Part A for hospital insurance and Part B for medical insurance. Visit the Centers for Medicare & Medicaid Services website to learn more about the eligibility and enrollment for Medicare.
Talk with your HR Benefit Administrator
Insurance can often be confusing. Contact your HR Benefit Administrator as they’re trained to handle confidential information and assist in answering any potential questions you may have. Remember, the HR department is typically a key player in selecting a health insurance plan and other insurance or benefits that are part of your employee benefits package, so they’re an extremely helpful and informed resource. They frequently address questions for employees on coverage topics and can walk you through the steps you may need to take to keep you covered and on a healthy track.
