Let’s say you have health insurance provided by your employer as part of your benefits. And suppose you accept another job with a different company, beginning October 3rd.
Also assume that the new company will have health insurance when you start.
If you give your two weeks notice, something like “my last day of work will be Friday, October 1st”, would you have any coverage over the weekend?
Suppose you wanted to take off a week or two betwen the two jobs.
To get coverage between jobs, would you need to purchase something like COBRA?
It’s going to depend on the job. At one job I left, my coverage continued until the end of the month. With my current job, coverage will continue at least until I go off payroll, which can be weeks after I actually stop working.
Perhaps consulting your insurance documents would be in order.
You’ll have to check your company’s plan provisions. Some companies will keep you on until the end of the calendar month, just because it’s easier. Others will cancel you effective one day after your last day of employment. If your company does the latter, then no, you would not have any coverage from 12:01 AM on October 2 until the time you start your new job on October 3 (or whenever you start the new one, assuming they provide coverage immediately upon starting).
If you do need to buy COBRA, you should normally be able to buy it for the whole month of October and then cancel it when your other insurance takes effect and get a refund for the remainder of the month. Obviously you should verify this with your old company and the carrier before doing it. However, if the old company tells you they “can’t” allow you to get a refund, call the carrier to check.
As long as your old employer had more than 20 employees on a typical day during the previous year, then you would be eligible to continue coverage under COBRA, a federal law providing for continuation coverage for up to 36 months when a covered employee or beneficiary loses health coverage as a result of a qualifying event. Depending on the qualifying event, the maximum amount of time for coverage can vary. Typically, if the loss of coverage is the result of a termination of employment (either voluntary or involuntary), the maximum length of such coverage is 18 months. The cost of COBRA is generally 102% of the unsubsidized cost of the elected coverage.
To elect COBRA, you must fill out paperwork provided by your employer. However, in the situation where you will take only two weeks (or even a month) off and then immediately have coverage again, it is USUALLY not advised that you elect COBRA in advance. The reason COBRA does not usually need to be elected in advance is as follows. From the date you lose coverage as a result of your termination of employment (again, either voluntarily or involuntarily), your employer has 2 weeks to send you a COBRA notice and enrollment form. From the date you receive such notice, you have 60 days to complete and return such notice. Upon completing and returning such notice, you have an additional 45 days to make your first COBRA payment. So long as all steps are correctly followed, your COBRA coverage will be in effect as of the day you last had coverage as if there had never been any interruption. This allows someone who would like to elect COBRA to have up to 105 days from the date they receive their election form to decide whether or not they would actually want such coverage. Therefore, in the situation where only a short time will occur between coverage under the old and new job, advanced election of COBRA is generally not necessary.
Please note, for portability purposes under HIPAA, you will want to be sure that you never have a break in coverage of over 63 days. If you do, you will be likely to face a pre-existing condition exclusion at your new job for up to a year. Please also note that if your old employer did not employ 20 people on a typical day during the previous year that your employer is not required to offer COBRA. Some states have COBRA type requirements for their small employers, but they typically have different timeframes and can also have different eligibility requirement (for example, some states only require an employer to offer state continuation coverage if the employee was terminated involuntarily). Finally, please note that even under COBRA your coverage can end earlier than the timeframe provided under COBRA. For example, coverage can end if your old employer cancels its health plan or if premiums are not paid on a timely basis.
Remember that COBRA can be hideously expensive. State Farm has short term health insurance that is designed to cover those between jobs or newly outta college into a first job that is much more affordable (although it won’t be the same coverage you had at your previous job and will be contingent on your existing health and such). It’s good for up to six months, after which you’ll have to find a new option.
I’m sure other insurance companies (American Family, for example), have a similar option. Check out these other options, in addition to COBRA, to see what’s right for you.