How Changing Jobs Affects Health Insurance

Switching jobs can wreak havoc on your health insurance coverage. There are three possible changes that can occur with your health insurance when you get a new job:

1) You will be moving from one group health insurance plan to another.
2) You will be moving from a group insurance plan to an individual insurance plan.
3) You will be moving from an individual plan to a group health insurance plan.

In this article, we will cover these different scenarios so you have some idea of what to expect.

Moving From One Group Health Insurance Plan to Another

Typically this is the most challenging scenario because there is typically some lag time between the time you end one job and start another. There are a couple of things you can do to help avoid a gap in health insurance coverage.

Filling the Health Insurance Gap with COBRA

The acronym COBRA stands for Federal Consolidated Omnibus Budget Reconciliation Act. If you were receiving health benefits at your previous job, this act requires that the employer continue to extend health insurance coverage at group rates for a specific period of time, typically up to 18 months. This usually provides enough of a buffer between jobs to keep continuous health insurance coverage. However, since the health insurance premiums are usually subsidized by the employer, the cost for COBRA insurance can be fairly high.

Moving From a Group Plan to an Individual Health Insurance Plan

Another option available to you is to get an individual health insurance plan between jobs, or if no insurance is available through your new employer, then permanently. If the cost of your previous insurance through COBRA is too much, you may be able to get a lower premium by getting an individual plan with less coverage until your group insurance plan becomes available.

Signing up for an individual plan can be a real inconvenience, since you have to fill out a good bit of paperwork and do some waiting. If you don't apply for the plan before group coverage from your previous job ended, then you may end up with a gap in coverage, which will put you at square one for pre-existing conditions. The key is to make sure that you have continuous health insurance coverage.

Moving From an Individual Plan to a Group Health Insurance Plan

The final possibility, moving from an individual health insurance plan to a group plan rarely results in a loss of coverage, unless you accidentally cancel your individual plan before the group plan kicks in. The major issue with this transition is that the health care providers you may be used to working with might not be available in the new group insurance plan. Also, the coverage might be different, so it is important to fully investigate your new possible health insurance plan before making the commitment to switch