Life hardly ever goes according to plan. While it’d be nice if we were all able to take the easy path and get the best results, that usually isn’t the case.
One particularly frustrating area of life is health insurance. Health insurance is important because an unexpected health emergency could easily bankrupt someone without health insurance. At the same time, sometimes it’s hard to stay covered.
For example, let’s say you’re changing jobs. You had health insurance at your old job. You’ll also have health insurance at your new job. But maybe you’re taking a three-month break between jobs or the new job has a waiting period before you can start using benefits, including health insurance.
What can do you do cover a gap in your health insurance? Thankfully, you have a few options.
Step 1: Find out when your coverage actually ends
The first thing you need to do is figure out when your current health insurance coverage ends. Depending on how you get your insurance, your coverage may not end when you think it does.
If you currently have a plan outside of your job, your plan will likely end at the end of the month which you last paid for. This makes sense and is fairly easy to control. Simply pay for the plan until you don’t need it anymore.
However, if you’re losing coverage from a job, your health insurance end date may vary.
I personally thought I’d lose my health insurance the day I left my job. Instead, my insurance extended through the end of the month that I left regardless on which day of the month I quit.
Check with your human resources or benefits department to see how your employer’s health insurance works. If that doesn’t work, try calling your health insurance company directly.
Step 2: Know how long you’ll need coverage
After you figure out when your current health insurance ends, you can figure out how long you’ll need coverage to fill your health insurance gap.
If you know when you’ll start getting health insurance again, this is easy. Simply calculate the time between when your current insurance ends and your new insurance begins to figure out how long your gap coverage needs to be.
Unfortunately, if you have no clue when you’ll get health insurance again, you’ll either have to guess or find a way to get permanent health insurance coverage. Some people may only need insurance for a few days between jobs. Others may need insurance for a few months until their benefit waiting period ends at their new employer.
Step 3: Consider all of your options
Like with most major decisions, it makes sense to compare all of your potential options before you make a decision.
Each type of insurance listed below can vary greatly in price in each person’s individual situation. The levels of coverage can vary greatly depending on which plan you pick, too. Make sure you completely understand the health insurance plans you’re considering before you make a decision.
COBRA health insurance
COBRA stands for Consolidated Omnibus Budget Reconciliation Act. While that doesn’t sound very useful at all, COBRA health insurance can be a great tool if you’ll have a health insurance gap.
Essentially, COBRA health insurance allows you to continue using health insurance from your employer for a certain period of time after you no longer qualify.
Situations that allow you to qualify for COBRA health insurance
- Leaving your job
- Getting fired
- Having your hours reduced and losing benefits
- Getting divorced
- The covered employee dies
- A child loses dependent status
If you become eligible for COBRA health insurance, you should get a letter from your health insurance provider or your employer explaining the benefits, how they work and how to sign up. Sadly, not every employer must offer COBRA coverage.
In general, companies must offer COBRA if they have 20 or more employees and are in the private sector or are state or local governments. Some states may have passed laws that make these requirements even stricter, but there are still plenty of exceptions.
The cost can be very high
What may shock you about COBRA coverage is the price. When you’re employed, your employer likely pays a major part of your health insurance premiums.
Once you no longer qualify for health insurance through your employer, you’ll have to pay both your normal premium plus what the company was paying for your health insurance.
Since most companies heavily subsidize health insurance premiums, the price of COBRA health insurance will likely be much higher than you think.
If your coverage gap is pretty short, you may be able to take advantage of COBRA coverage without paying anything at all, but only if you don’t use it. This way, you can be covered in case an expensive medical emergency pops up but you don’t have to pay anything if you don’t use any medical services during the coverage gap.
Short-term health insurance plans
Short-term health insurance plans are another option to fill a health insurance gap. These plans are typically cheaper, but they don’t cover everything a traditional health insurance plan would.
What is not covered?
- Preexisting conditions
- Maternity care
- Preventative care
If you’re considering one of these plans, it’s really important to understand exactly what is and isn’t covered so you aren’t surprised with medical bills you weren’t expecting.
Sign up and cancel whenever you want
You can, however, sign up for these plans at any time and cancel them at any time without a penalty.
You can get coverage as soon as the next day after your application is received in some cases. Keep in mind, these plans don’t count as minimum essential coverage under the Affordable Care Act.
Major medical health insurance through open enrollment or qualifying events
One option that many people don’t think about for short term gaps is major medical health insurance through either open enrollment or a qualifying event. If your gap will match up with the first of the year, you could get traditional health insurance through open enrollment.
It’s unlikely your timing will line up perfectly though. For these cases, you can still qualify for major medical health insurance if you’re subject to a qualifying event which, according to Healthcare.gov, include:
Losing health coverage
- Job-based, individual and student loans
- Losing eligibility for Medicare, Medicaid or CHIP
- Turning 26 and losing coverage through a parent’s plan
Changes in your household
- Getting married or divorced
- Having a baby or adopting a child
- A death in the family
Changes in residence
- Moving to a different zip code or county and other situations
Other qualifying events
- Changes in income that affect coverage you qualify for
- Gaining membership in a federally recognized tribe
- Becoming a U.S. citizen
- Leaving jail or prison
- Americorps member starting or ending their service
You have a limited time to make changes after a qualifying event, which is usually 30 days.
Consider joining your spouse’s (or parents’) health insurance plan
If you have a qualifying event listed above, it’s possible you could sign up for health insurance with your spouse’s or parents’ health insurance plans.
To sign up under your parents’ health insurance plans, you’d have to be under 26. There is no age limit to sign up under your spouse’s plan.
Another option for those with low incomes is Medicaid. Medicaid eligibility is based on your state’s requirements, your income and your family size.
Medicaid allows you to apply for free or low-cost coverage at any time in the year. If you end up qualifying for Medicaid, you can enroll immediately. You can visit this site to see more about how Medicaid works in your state.
Step 4: Shop around for the best plan
If you want to go the easy route, you can check out your health insurance options online at websites like Policygenius.
Policygenius offers many types of health insurance, but the options are limited depending on where you live and the time of year you sign up.
And since you’re already shopping for health insurance, you should take a look at your life insurance options through Policygenius (seriously, you should really have one). Policygenius, with their partner Brighthouse SimplySelect℠, now offers term life insurance with no medical exam required AND this will not raise your premiums. All you’ll need to do is take an over-the-phone questionnaire with a Policygenius agent.
Your state’s healthcare website
Other options to shop for the best plan include visiting your state’s healthcare exchange website if it is open enrollment or you have a qualifying event, visiting a health insurance agent or a health insurance broker.
Get a free health insurance quote in your State:
Keeping health insurance coverage is super important even though it may be expensive. One unexpected trip to the emergency room for a major emergency or a multi-day hospital stay could easily bankrupt the average family.
Hopefully, one of the above options can affordably meet your health insurance coverage needs during your gap in coverage.