One of the chief complaints of many health policy experts over the last few years has revolved around the relationship between economic mobility and health insurance. Namely, with the rising costs of health insurance and just how important it is to living a safe life, some Americans stay in jobs they hate just because they have to do it. If you’re thinking about changing jobs, going back to school or making some other big life change, then you need to think hard about the health insurance implications. Chief among your questions should be a consideration of just how long after leaving a job your health insurance will be voided. The answer is that it depends.
Negotiating for extended insurance during your corporate exit
The truth about the workplace is that you can bargain for almost anything. Depending on your position in the company and the reasons for your exit, you may be able to negotiate a severance package that includes health insurance payments. Some companies provide these benefits as a way of showing the market that they care about their employees. Others do it as a means of gaining the compliance of outgoing employees with non-solicitation or non-disclosure agreements. The longer you have worked for the company, the more likely it is that you can negotiate one of these deals.
Standard agreements for those without leverage
If you lack the leverage needed to negotiate a great severance deal, you’ll be stuck. Most workers leaving their companies won’t be able to score a nice going away present. For those people, the default status is that you will remain covered until the last day of the month in which you leave your job. This is a great argument for timing your exit strategically if you are the one making the decision to leave.
Options to get you through a difficult period
The good news is that you aren’t exactly alone in these situations. You will have a number of good options at your disposal if you leave a job and lose coverage. COBRA is probably the most popular of these options. COBRA is a 1986 law that forces employers to ensure that laid-off or terminated employees have group insurance coverage for 18 months after they are terminated. This applies to employers with 20 or more employees, so you’ll be out of luck if you work for a small business. In addition, you’ll need to apply for coverage within 60 days after your termination.
Insurance coverage for temporary leave
Not every person who leaves a job does so with the intention of never returning. More and more parents are leaving for maternity or paternity leave. Some have to take disability leave because of some major issue. Your employer in these cases will have to continue paying your insurance under federal law. You’ll still get these benefits until a doctor has said that you are good to return to work. However, if you happen to be cleared to work and chose not to do so, you will lose these benefits right away. You should check your employer’s policies, as well, because you may be required to pay back premium benefits if you decide not to come back to work after your employer has paid those benefits during your leave.