Does Health Insurance End The Day You Quit?

What is Health Insurance?

Health insurance is a type of insurance coverage that pays for medical and surgical expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly. It is often included in employer benefit packages as a means of enticing quality employees. The cost of health insurance premiums is deductible to the payer, and the benefits received are tax-free.

What Happens to Health Insurance When You Quit?

When you quit your job, your health insurance coverage usually ends the day you leave. However, in some cases, you may be eligible for a temporary extension of coverage, known as COBRA. COBRA is an acronym for the Consolidated Omnibus Budget Reconciliation Act, which is a federal law that allows employees and their families to continue health insurance coverage after leaving employment.

COBRA Coverage

COBRA allows eligible employees and their dependents to continue their health insurance coverage for up to 18 months after leaving their job. To be eligible for COBRA coverage, you must have been part of a group health plan at the time of your termination, and the plan must have 20 or more employees. The coverage will be the same as what you had before, and you will be responsible for the full premium cost, plus an additional 2% for administrative costs. In addition, COBRA coverage does not include new benefits that may be added to the plan after you leave.

Other Options

If you are not eligible for COBRA, there are other options. You can purchase an individual health insurance policy, or you may be eligible for coverage through a spouse's employer. If you are under 26, you may be eligible to stay on your parents' policy. You can also look into short-term health insurance plans, which are designed to provide coverage for periods of up to three months. These plans often have lower premiums than traditional health insurance plans and may be a good option for people who are in between jobs.

Conclusion

When you quit your job, your health insurance coverage usually ends the day you leave. However, if you qualify, you may be eligible for a temporary extension of coverage through COBRA. If you do not qualify for COBRA, there are other options, such as purchasing an individual health insurance policy, getting coverage through a spouse's employer, or looking into short-term health insurance plans. Whatever option you choose, make sure you understand the details and cost of the plan before signing up.