When Does Health Insurance Expire After Leaving a Job?

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.

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.

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.

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.

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.

When health insurance expires after leaving a job FAQs