Health Insurance

How To Get Health Insurance Between Jobs

Health insurance is key to protecting yourself. If you happen to lose employer health coverage, there are several options to choose from for coverage between jobs.

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Health insurance is an important way to protect yourself, both physically and financially. If you experience a medical issue during a temporary lapse of coverage, you may find yourself paying out of pocket for numerous bills. Some people may even avoid going to the doctor because of this, putting their health at risk.

Many people with full-time jobs have employer-sponsored health insurance policies. In 2020, employment-based health insurance accounted for 54.4% of Americans with insurance, or about 177 million people. However, this coverage is usually lost when someone leaves a job. Even if a person has a new job lined up, it can take a few weeks or longer for a new employer’s health benefits to kick in, leaving them without coverage in the interim.

If you’re in this situation, you could be in a vulnerable position. Looking into temporary health insurance between jobs may be a way to reduce your risk.

Your Options for Health Insurance Between Jobs

Depending on your situation, you may have some different options for maintaining health insurance coverage while unemployed. These choices can act as gap health insurance between jobs until your new coverage kicks in.

Continue Your Employer-Sponsored Health Plan Without Change

In some cases, companies continue to maintain an employee’s health benefits for a specific amount of time after they quit, get laid off, or are terminated. For example, an employee’s last day with a company could fall on March 1st, but the company may still maintain their health benefits until the end of the month.

Every employer’s policy is different, so always check your employee handbook or explanation of benefits to see if there are details on how long healthcare coverage lasts after leaving the company. Ask the company’s benefits manager or HR department to get a specific date for the end of your policy. Knowing the exact end date of your benefits is crucial because it dictates if you need any gap coverage in the interim between your old policy expiring and your new policy with your new employer kicking in.

For instance, if you quit a job and start at a new one and your benefits from your previous employer will last until the 30th of the current month and the benefits for your new employer start on the 1st of the next month, you may not need any additional insurance. However, if your new employer’s benefits don’t kick in immediately, then you would want some insurance to cover you during the gap.

Immediate Next Steps

If you want to continue your current employer-sponsored plan, consult with your human resources department to determine if the coverage will extend. If so, confirm when it will end.

Continue Your Employer-Sponsored Health Plan Through COBRA

COBRA — the Consolidated Omnibus Budget Reconciliation Act — is a federal regulation that lets you continue with your employer-sponsored health plan even after you leave the company. Not every employer has to offer COBRA, as it is only required if they have 20 or more employees. To be eligible, you must have been employed with the company for 50% of the workdays in the previous year and lose your employment due to a qualifying event. Qualifying events include:

  • Voluntarily leaving a position
  • Termination for anything other than gross misconduct
  • A reduction in hours
  • Divorcing or separating from the covered employee, meaning you receive health coverage from your spouse’s employer-sponsored plan and now are separating from your spouse

After you are terminated, your employer typically has 30 days to notify the health insurance plan of your termination. Then, the plan has 14 days to provide you with an election notice describing your rights to the continuation of coverage. After you receive this notice, you have 60 days to decide whether or not to choose continuation coverage. Finally, once you decide on coverage, you have 45 days to pay your first premium.

Your coverage would be identical to the coverage you had from your employer, but it will likely cost significantly more since your employer is no longer contributing to the costs. However, the law notes that the insurer can’t charge you more than 102% of the normal cost of the plan.

COBRA coverage lasts for either 18 to 36 months after your qualifying event. If your benefits from your new employer kicks in before that, you can cancel the COBRA coverage at that time. The amount of time COBRA can stay in effect is determined by the qualifying event that made you eligible for COBRA. Overall, it’s different from buying a new individual health insurance policy on your own because you don’t have a choice in plan coverages. Your only option is the plan you previously had with your former employer.

Immediate Next Steps

If you want to continue your current employer-sponsored plan through COBRA, do the following:

  • Look for an election notice to restart your workplace insurance within 45 days of your end of employment
  • Make a decision within 60 days of receiving the notice
  • Make your first premium payment to start coverage

Get Coverage Through Your Spouse’s Health Insurance Plan

Getting coverage through your spouse’s health insurance is easiest if you happen to lose your employer-sponsored coverage during open enrollment, which is a period that generally begins in November and ends in January. In that situation, your spouse could add you to their active health insurance plan at a time when they are able to make changes to their healthcare elections anyway.

However, even if timing does not work out and you lose your employer-sponsored health insurance outside of the open enrollment period, you can still join your spouse’s plan during the special enrollment period. This is a minimum of a 30-day period after you leave your company, during which time you are eligible to join another insurance plan.

To join their plan, you usually must fill out forms with basic information about yourself as well as submit proof that you lost or left your job and no longer have health insurance as a result. After you enroll, you may get your own insurance card that’s linked to your spouse’s plan.

Having coverage through your spouse’s employer-sponsored plan can be convenient because it’s likely less expensive than seeking your own health insurance plan from the Health Insurance Marketplace because their employer contributes to the costs. However, you are limited to the benefits and coverages they’ve selected.

If you eventually decide to go back to your own plan, call the insurer to let them know. They can likely remove you as a dependent the following month.

Immediate Next Steps

If you want to get coverage through your spouse’s plan, do the following:

  • Notify your spouse’s health provider and fill out the proper paperwork
  • Submit proof of job loss/loss of insurance coverage within 30 days to the spouse’s insurance provider

Purchase a Short-Term Health Insurance Plan

Short-term health insurance is a type of plan that’s typically offered for a period of 12 months or less. These plans do not have to comply with the regulations set forth by the Affordable Care Act (ACA). They can be and often are medically underwritten, meaning the provider takes a look at your medical history and can charge you higher premiums if you have pre-existing health conditions.

Another downside of these plans is that they don’t have to cover health benefits like maternity care, mental health care, or prescription drugs. They may also have lifetime limits on coverage. Therefore, if you have a major accident, your coverage may top out at a certain point.

However, since they usually cover emergency hospital visits, they can be good for helping you prepare for the unexpected. Additionally, coverage typically begins as soon as your application is accepted, which can be good if you unexpectedly lose your employer’s health insurance.

When you enroll, you may receive a health insurance card like you would with standard health insurance. Insurers vary with cancellation policies, but many allow you to end the policy without a penalty if you are eligible for another health insurance policy.

Immediate Next Steps

If you want to purchase short-term health insurance, do the following:

  • Browse short-term health plans directly on provider websites
  • Fill out an application
  • Pay your premium and receive your insurance card

Purchase an Individual Health Insurance Plan

You can buy individual health insurance from the Health Insurance Marketplace. While these plans are offered by various insurance providers, they’re regulated by the Affordable Care Act. That means insurers can’t alter your premiums based on your medical history. Instead, your premiums are determined based on five factors:

  • Location
  • Age
  • Tobacco use
  • Plan category
  • Whether or not you have dependents

Marketplace insurance is different from employer-sponsored insurance because you don’t have an employer to pay part of your costs. However, you have more plan options to choose from, and is the typical option for those who are self-employed. Plans vary from Bronze (low premiums, but higher costs for care) to Platinum (high premiums, but lower costs for care). Whatever plan you decide on, after signing up, the insurer sends a health insurance card you can use for your healthcare needs.

If you ever want to cancel your policy, you can do so again through HealthCare.gov or by calling 1-800-318-2596 (TTY: 1-855-889-4325). The cancellation could go into effect immediately or on a future day of your choosing, such as the day your new job’s health benefits take effect.

Immediate Next Steps

If you want to purchase your own individual health insurance plan, do the following:

  • Browse plans on the Marketplace or with a trusted insurance agent
  • Narrow down your options to one that meets your needs and serves your area
  • Pay your first premium for coverage to begin

Low-Income Option: Medicaid

Medicaid is a federal- and state-based program that provides free or low-cost health insurance to people with low incomes. It’s different from employer-sponsored health insurance because you usually don’t pay any premiums and don’t have a specific insurance company providing coverage. Instead, your coverage is managed by the state you live in.

Since states regulate Medicaid differently, there’s no overall guidance for what the program covers. Still, many states provide you with a health insurance card you can show at hospitals, doctor’s offices, and other healthcare providers.

Eligibility requirements also vary between states. Some states have expanded Medicaid programs to cover people that have a household income below a certain level. In the states that have expanded coverage, your income needs to be below 138% of the federal poverty level. In 2022, that means you need to earn less than $18,754 to be eligible for Medicaid. If you’re eligible, you can enroll by filling out an application on HealthCare.gov or by contacting your local Medicaid agency.

Immediate Next Steps

If you want to enroll in Medicaid, do the following:

  • Check your state’s Medicaid criteria to see if you are eligible
  • Fill out an application on the Health Insurance Marketplace or through your state Medicaid agency

Low-Income Option: Subsidized ACA Plans

A subsidized ACA plan is like buying an individual health insurance plan from the Health Insurance Marketplace except that you may see some premium reductions. This may make up for the fact that you no longer have an employer footing part of the bill for your plan. Like an individual health insurance plan, you will receive an insurance card either in the mail or electronically from the insurer you choose.

There are two main kinds of ACA subsidies. The first is a premium tax credit that lowers your monthly premium. To be eligible for this credit, your income must be within 100 to 400% of the federal poverty level. In 2022, that means you have to make between $13,590 and $54,360. As long as your income is in this range, you can sign up for the tax credit when you submit your application for insurance.

The second subsidy is a cost-sharing reduction. This helps to lower your out-of-pocket costs whenever you pay for medical services. For example, you may have lower deductibles, copayments, and out-of-pocket maximums than a standard plan. You may be eligible if you make 100 to 250% of the federal poverty level — or between $13,590 and $27,180 in 2022. These benefits are applied automatically when you apply as long as you select a Silver-level plan. No other levels are eligible for this specific reduction.

Immediate Next Steps

If you want to enroll in a subsidized ACA plan, do the following:

  • Browse plans on the Marketplace or with a trusted insurance agent
  • Narrow down your options to one that meets your needs and serves your area
  • Fill out an application to see which subsidies you may receive
  • Pay your first premium for coverage to begin

How to Maintain Dental and Vision Coverage

Many standard health insurance policies don’t include dental or vision coverage. However, it’s possible to add these coverages separately. Check with your local dentist or vision provider to see if they offer in-house payment plans. You can also look for standalone vision and dental coverage plans

Be Aware of Enrollment Periods

When shopping for insurance, make sure to double-check the enrollment period timelines. These are specific spans of time where you may be eligible to sign up for insurance. If you miss them, you may not be able to sign up until the next period.

For example, open enrollment for the Health Insurance Marketplace is generally from November 1st to January 15th each year. The special enrollment period, which you may be eligible for after losing your job, lasts for 60 days after you leave the company. You may also be able to enroll outside of the open enrollment period if you have a qualifying event, such as getting married, having a baby, or moving to a new state.

Those enrolling in Medicaid, however, do not have to abide by enrollment periods. You may join the Medicaid program year-round.