How Long Do You Have Health Insurance After Leaving a Job?

When Coverage Expires and How to Replace It

health insurance options after leaving a job

The Balance / Dennis Madamba

You gave your boss a resignation letter. You completed an exit interview with human resources. Your co-workers threw you a going-away party. You’re all set to leave your job and move on to your next adventure.

That’s when it hits you: You have no idea when your employer-sponsored health insurance ends, let alone how to get coverage on your own.

Figuring out health insurance after leaving a job can be frustrating and confusing. But you can make the transition from your old coverage as smooth as possible by being prepared. Read on to learn when your health coverage ends and what options you have once it expires.

Key Takeaways

  • Most employees lose their employer-sponsored health coverage either on their last day of work or at the end of the month during which they stop working.
  • After leaving a job, you will likely have access to COBRA—temporary coverage lets you continue your health plan, although you’ll pay the full cost of premiums.
  • You can use the health insurance marketplace to search for an individual or family plan after losing your job-related coverage.

When Does Health Insurance Expire After Leaving a Job?

Although there are no set requirements, most employer-sponsored health insurance ends on the day you stop working or at the end of the month in which you work your last day. Employers set the guidelines for when employer-sponsored health coverage ends once you resign or are terminated.

To figure out your employer’s policies, talk with your human resources department. You might also be able to find details on health insurance expiration in your benefits documentation.

You might find answers to your health insurance expiration questions in an employee handbook or web-based employee portal.

For example, suppose you plan to leave your job on August 1. You talk with your human resources representative, and they explain that your company terminates health insurance at the end of the month of the employee’s last day. This means your last day of coverage could be August 31 (if you don't take action), which means you would no longer be covered on September 1.

Health Insurance Options After Leaving a Job

Losing employer-sponsored health coverage after leaving a job might have you worried. The good news is most people have access to several options to get health insurance, even if they don’t have access to another employer-sponsored plan.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

The Consolidated Omnibus Budget Reconciliation Act, most commonly known as COBRA, is a law that allows you and certain family members to stay on your current group health insurance plan in certain circumstances. COBRA coverage is temporary coverage that can be used to provide continued health insurance for you, your spouse, former spouses, and your dependent children.

Most employers with 20 or more employees are required to provide a COBRA option, except for certain religious organizations and the federal government. Additionally, some states have COBRA requirements for employers with fewer than 20 employees.

A COBRA plan usually provides coverage for up to 18 months. However, you’ll have to cover the full cost of the premiums—plus an administrative fee—yourself. This can make COBRA plans expensive, especially if you don't have an income.

Although COBRA can be expensive, reasons you might consider it after leaving your job include:

  • You already have a new job and only need coverage for a month or two until your new benefits kick in.
  • You’ve met your deductible on your current health plan for the year.

Health Insurance Marketplace

A popular alternative to COBRA coverage is to purchase an individual or family health insurance plan through the health insurance marketplace. Leaving your job and losing your employer's health coverage qualifies you for a special enrollment period through the marketplace. Coverage can start as soon as the first day of the month after you lose your coverage.

You can search and apply for health plans online. Your application will show you if you qualify for savings on premiums or medical costs based on your income, including whether you’re eligible for Medicaid.

A marketplace plan could be an affordable way to get health coverage between jobs. You can cancel a marketplace plan without penalties, including if you start getting benefits from a new job.

Join Your Spouse’s Plan

If you’re married, you may be able to enroll in your spouse’s employer-sponsored health insurance. To be eligible, you typically must have been covered by a different plan when you initially declined coverage from your spouse’s plan. Or, you'll need to wait until your spouse's open enrollment period at work.

For instance, say you already had your current job when you and your spouse got married. You both had health insurance through work and declined to join each other’s plans. Now that you’re leaving your job and losing your health insurance, you should be able to enroll in your spouse’s plan under a special enrollment period.

Short-Term Health Insurance

Short-term health insurance plans are temporary coverage designed to help you pay for catastrophic events when you don’t have other coverage. These plans are different from group coverage or individual plans, and they can only cover you for up to three months.

Short-term health plans are not ACA-approved and don’t have to cover the same benefits as regular health insurance. That means your application could be denied for medical reasons such as having a preexisting condition.

The lack of comprehensive coverage from short-term plans means they’re generally less expensive than other types of health insurance. A short-term plan could be a good option if you need temporary protection from catastrophic events, such as broken bones or sudden illness. Be sure to carefully read the policy before joining, and note any restrictions or exclusions.

How to Prepare To Leave a Job

Before quitting your job, review all of your options for health insurance. Remember that everyone’s medical and financial situations are different. You might benefit from continuing coverage via COBRA, or it may make more sense to join an individual plan through the marketplace.

Use these tips to make sure you’re covered when your employer-sponsored insurance expires:

  • Talk with your HR representative before you resign to learn how your employer’s insurance plan works and when you’ll lose coverage.
  • Consider quitting earlier in the month if your company lets you keep coverage until the last day of the month. This could give you the time you need to get new coverage—such as from a new employer—without having to pay for COBRA.
  • Gather any documents you’ll need to enroll in your new health insurance plan. For example, the marketplace offers a convenient checklist to help you apply for a plan.

Frequently Asked Questions (FAQs)

How do I sign up for COBRA health insurance?

If you're qualified for COBRA insurance, your former employer must notify you within 14 days of you leaving your job. This notification will tell you how to sign up for insurance. You will have 60 days to sign up or waive your coverage. You should also be able to find information about your COBRA options in the health insurance information you were given when you were first hired.

Where can I get health insurance when I'm unemployed?

If you are unemployed, you can get health insurance through a COBRA plan, by purchasing it on the Health Insurance Marketplace, by enrolling in a spouse's insurance plan, or by purchasing a short-term plan that offers emergency coverage.

Article Sources

  1. U.S. Department of Labor. "FAQs on COBRA Continuation Health Coverage for Workers," Page 1. Accessed Jan. 10, 2022.

  2. "If You Lose Job-Based Health Insurance," see "Option 2: Sign Up for COBRA Coverage." Accessed Jan. 10, 2022.

  3. U.S. Department of Labor. "FAQs on COBRA Continuation Health Coverage for Workers," Page 1. Accessed Jan. 10, 2022.

  4. Office of the Insurance Commissioner of Washington State. "What You Need To Know About Short-Term Medical Plans." Accessed Jan. 10, 2022.