)
)
Written byMichelle Lambright Black
)
Michelle Lambright Black is a credit expert, freelance writer, and founder of CreditWriter.com. She has over 20 years of experience writing and speaking about credit and money, and focuses on helping families and small business owners make smart, informed decisions about their credit, money, and financial products (including insurance). Michelle's work has appeared in publications such as Yahoo! Finance, Reader's Digest, Parents, FICO, Forbes, Bankrate, The Seattle Times, MarketWatch, BuySide from Wall Street Journal, USA Today, and more. She's also a three-time finalist for the best personal finance freelancer award from the Plutus Foundation. When she isn't writing or speaking about credit and money, Michelle loves to travel with her family or read a good book. You can connect with Michelle on Instagram or Twitter.
)
Edited byEvelyn Pimplaskar
)
10+ years in insurance and personal finance content
30+ years in media, PR, and content creation
Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.
Featured in
){kind=logo}
){kind=small}
){kind=small}
Updated June 3, 2024
Insurify partners with top insurance companies to provide a comprehensive comparison experience. However, the insurance experts writing our content operate independently of our partners. Check out reviews from over 3,000 satisfied customers, how we make money, our data methodology, and our editorial standards.
Advertiser Disclosure
At Insurify, our goal is to help customers compare insurance products and find the best policy for them. We strive to provide open, honest, and unbiased information about the insurance products and services we review. Our hard-working team of data analysts, insurance experts, insurance agents, editors and writers, has put in thousands of hours of research to create the content found on our site.
We do receive compensation when a sale or referral occurs from many of the insurance providers and marketing partners on our site. That may impact which products we display and where they appear on our site. But it does not influence our meticulously researched editorial content, what we write about, or any reviews or recommendations we may make. We do not guarantee favorable reviews or any coverage at all in exchange for compensation.
Table of contents
When you leave a job, your employer gets to choose when to end your healthcare coverage. Most employers will either end your coverage on the last day you work for them or extend it to the last day of the last month in which you worked. In some situations, an employer may agree to give you coverage for a longer period.
It’s critical to avoid a lapse in coverage. Being without health insurance can expose you to serious financial risks. Here’s what you need to know about health insurance when you’re changing jobs.
What happens to your health insurance after you leave a job?
If you have a health insurance plan through your employer, when you leave your job there’s a chance your healthcare benefits may end on your last day of employment. In other cases, after leaving a job, you might have healthcare coverage through the end of the last day of the month in which your job ends.
In the U.S., close to 153 million working-age people have employer-sponsored health insurance, according to the 2023 Employer Health Benefits Survey by the Kaiser Family Foundation.[1] If you also rely on this type of coverage for your healthcare needs, it’s important to understand your employer’s health insurance policy and how any changes to your employment status might affect you.
Good to Know
Typically, whether you quit your job, were laid off, or got fired doesn’t have much effect on when your health coverage will end.
Options once your healthcare coverage ends
The end of your employer-sponsored health insurance doesn’t mean you must — or should — go uninsured. You have numerous health insurance options you can consider as a replacement. It’s in your best interest to make a decision regarding your new healthcare insurance solution as soon as possible.
Below are five potential healthcare coverage options that might work when your employer-sponsored health insurance plan ends.
The Consolidated Omnibus Budget Reconciliation Act (COBRA)
The Consolidated Omnibus Budget Reconciliation Act, better known as COBRA, is a federal law that gives employees the option to keep their employer-provided health insurance for a temporary period of time for themselves and eligible family members. If an employer fires you (other than for gross misconduct), lays you off, or cuts your hours (below the minimum required for benefits), you may be eligible for COBRA.
In general, COBRA may last 18–36 months, depending on why you qualify for it.[2] If you’re a spouse or dependent who’s eligible for COBRA due to special circumstances (such as the death of an eligible employee), benefits might be available for up to 36 months. And employers can opt to provide COBRA for longer than the legally required length of time.
COBRA is expensive. You’ll typically need to pay the full premium yourself with this type of coverage, plus a 2% administration fee — meaning 102% of the total cost. Some employers may choose to subsidize COBRA costs, but the law doesn’t require them to. Average annual health insurance premiums are $8,435 per year for single coverage and $23,968 for family coverage, according to Kaiser.
Pros
Maintain same healthcare coverage for at least 18 months
Spouses and dependents also eligible for coverage
Coverage retroactive to the day you leave your job
Cons
Very high premiums — 102% of the total cost of coverage
Must enroll within 60 days
Must pay premiums back to date of qualifying event
Individual health insurance plans
If you lose access to a group health plan through your employer, enrolling in an individual plan through the Health Insurance Marketplace might be worth considering.
You should be eligible to enroll in a Health Insurance Marketplace plan if your employer-sponsored health insurance ends for any reason — including getting fired or quitting.[3] When you sign up for this type of Special Enrollment Period within 60 days of losing your job-based health insurance, it can provide you coverage for the remainder of the current calendar year.
The cost for individual health insurance plans on the Affordable Care Act (ACA) marketplace can vary. Factors like the plan you choose, your desired deductible, and whether you’re eligible for premium tax credits can all play a role in the amount you pay for this type of coverage.
Keep in mind that with a new Marketplace plan, your deductible and co-insurance responsibilities start over. But if you opt for a COBRA plan, any eligible medical bills you’ve already incurred should apply toward those obligations. So, if you’ve already met your deductible for the year, an ACA plan might not be best for your situation.
Pros
Often less expensive than COBRA
ACA subsidies could lower your monthly health insurance costs (if eligible)
May qualify for savings or tax credits
Cons
Some providers might be out of network
Special enrollment period only lasts 60 days
It might not make sense to start over with a new deductible if you’ve already met yours for the year
Health insurance through your spouse or parent’s employer
Asking your spouse to add you to their health insurance plan could also be worth considering if you lose your employer-based healthcare coverage. And if you’re 25 or younger, you might be eligible for coverage under your parent’s health insurance plan as well.[4]
Each insurance company is different. Before you can enroll in a spouse’s employer-sponsored health insurance plan, you might need to demonstrate that you had coverage from a different plan in the past. Otherwise, you might have to wait until the next open enrollment period on your spouse’s employer-sponsored plan before you’re eligible to join.
And when you join a spouse or a parent’s healthcare plan, their share of the premium will increase. Although this option could be an easy way to obtain health insurance, it’s not always the most affordable. So, it’s important to shop around and compare multiple health insurance options before you make a final selection.
Pros
May be an easier way to obtain health insurance
Lower cost than COBRA
Your spouse or parent should already be familiar with the plan
Cons
Your spouse or parent’s premium will increase
Some people may be ineligible
You may have a limited time in which to enroll
Short-term health insurance
A short-term health insurance plan with limited benefits is another option to consider when you leave a job. In general, enrollment is available throughout the entire year. But you might not be eligible for this type of health insurance (or you could face higher premiums) if you have certain pre-existing conditions.
Short-term plans are usually a temporary solution at best. Short-term health insurance plans may not be ACA-compliant, and some states even restrict their availability. But if you have no other affordable options available, short-term health insurance might help provide you with coverage for catastrophic healthcare events until you can put more comprehensive healthcare coverage in place.
Pros
May be more affordable for some
Enroll at any time
Can be a financial safeguard
Cons
Can deny coverage for pre-existing conditions
Lacks ACA’s consumer protections
Not eligible for marketplace subsidies
When health insurance expires after leaving a job FAQs
Going without health insurance between jobs isn’t necessary — or a good idea. To help you better weigh your options when your employer-sponsored health insurance ends, here’s some additional information.
When can I expect my health insurance to expire after leaving my job?
Each employer sets its own policy regarding the termination of employer-based health insurance benefits. In general, employer-sponsored health coverage ends on the day your job ends or at the end of the month in which you leave your job.
Is there a grace period for health insurance coverage after termination of employment?
If you have job-based healthcare benefits, that health insurance usually ends on the day your employment ends or by the end of that same month. Your employer decides how long you can stay on the company health insurance plan when you leave your job.
Although uncommon, some employers may opt to extend benefits for eligible former employees beyond these time frames.
Can I still use my health insurance after leaving my current job?
You can stay on your company health insurance plan after leaving a job as long as your employer allows you to do so. In many cases, this period is very limited, often only until the end of the month in which your job ends.
What options do I have to extend my health insurance coverage after leaving my job?
If you want to extend your employer-sponsored health plan after you leave a job, you could consider taking advantage of the Consolidated Omnibus Budget Reconciliation Act (COBRA).
COBRA coverage can be expensive since you’ll have to pay the full premium plus a 2% administrative fee. But it allows you to keep the same health insurance plan you had while you were employed for at least 18 months.
What are the steps to transition to a new health insurance provider after job termination?
When you leave a job, you have several health insurance options to consider as a replacement. But some of those replacement solutions are only available for a limited time. So, it’s important to start researching new health insurance providers as soon as possible.
The exact steps you need to take as you transition to a new insurance company may vary depending on the health coverage solution you select.
Sources
- Kaiser Family Foundation. "2023 Employer Health Benefits Survey."
- U.S. Department of Labor Employee Benefits Security Administration. "FAQs on COBRA Continuation Health Coverage for Workers."
- HealthCare.gov. "People with coverage through a job."
- HealthCare.gov. "People under 30."
)
Michelle Lambright Black
Michelle Lambright Black is a credit expert, freelance writer, and founder of CreditWriter.com. She has over 20 years of experience writing and speaking about credit and money, and focuses on helping families and small business owners make smart, informed decisions about their credit, money, and financial products (including insurance). Michelle's work has appeared in publications such as Yahoo! Finance, Reader's Digest, Parents, FICO, Forbes, Bankrate, The Seattle Times, MarketWatch, BuySide from Wall Street Journal, USA Today, and more. She's also a three-time finalist for the best personal finance freelancer award from the Plutus Foundation. When she isn't writing or speaking about credit and money, Michelle loves to travel with her family or read a good book. You can connect with Michelle on Instagram or Twitter.
10+ years in insurance and personal finance content
30+ years in media, PR, and content creation
Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.
Featured in