Temporary Insurance During a Job Change
Leaving or losing a job likely also means you will lose your health insurance coverage at some point. Even when you find a new job, you may have to wait an extended period of time until you are eligible for the company's group coverage. However, there are some coverage options available to help you avoid the risk of being uninsured.
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COBRA Coverage
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When you leave a job, regardless of whether you quit or are terminated, you can continue your health insurance coverage under the federal Consolidated Omnibus Reconciliation Act. With COBRA, you can keep your current coverage for up to 18 months after leaving your job, in most circumstances. The major condition is that you must pay the entire premium yourself, so if your company had been footing most of the bill, you'll have to pay more for health insurance coverage.
Individual Plan
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While you may be used to having your employer provide group health insurance as a fringe benefit, coverage also is available on the individual market. Individual polices are usually more expensive than group plans, and eligibility requirements are more stringent, as the insurer does not have the benefit of spreading its risk among members of a group. However, if you are satisfied with your individual coverage and find it affordable, you can elect to keep it even after finding a new job. You won't have to worry about your health coverage being tied to an employer. Some insurers also offer short-term plans lasting from 30 days to several months.
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Spousal Coverage
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If you're married and your spouse has coverage at work, have her employer add you to her group coverage. According to the CNNMoney website, losing a job is a special situation in which you don't have to wait until the annual enrollment period to be added to a spouse's group health plan, but you only have 30 days from the date your previous coverage ends to take action. In many cases, this will be your most affordable coverage alternative.
Keeping Current Coverage
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Some employers may allow you to keep your current coverage intact while continuing to pay their share of the premium for a period of time as part of your severance package. Ask your employer if it is willing to continue or extend coverage. According to CNN Money, Bill Belknap of the Five O'Clock Club career counseling firm indicates you'll have a better chance of receiving or extending coverage if you were a long-time employee or have a sick family member who needs the benefits.
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