How Long Does Health Insurance Last After You Quit a Job?

Your employer will choose when to end your health insurance coverage after you quit your job. Even if you find another job right away, you may face a gap between employer-sponsored plans. Therefore, it’s important to explore your health coverage options before you quit. If you don’t plan properly, you might experience a coverage gap that leads to expensive out-of-pocket costs for doctor visits, prescriptions, and emergency care.

How long your health benefits might last

Nearly 159 million non-elderly people receive employer-sponsored health insurance, according to the 2022 Employer Health Benefits Survey by Kaiser Family Foundation.^[1] When you quit your job, your employer decides how long you’ll stay on the company health insurance plan.

Employers typically end your health insurance coverage on the effective day of your resignation or on the last day of the month in which you resigned. You should be able to find this information in your employee handbook.

While it may be tempting to go without health insurance after you quit your job, doing so can steer you toward financial hardship. If you become ill or sustain an injury while you’re uninsured, you may face hundreds or even thousands of dollars in medical bills. Depending on your situation, your medical bills may even wipe out your life savings.

How to continue your health insurance coverage

If you decide to quit your job, you don’t need to go without health insurance. A number of options allow you to continue or replace your coverage. The right insurance option for you depends on a variety of factors, like your budget, health situation, and number of dependents.

Join a spouse’s or parent’s plan

Best for: People who have a spouse or parent with health insurance

If you have a spouse or partner with job-based health insurance, you may be able to join their plan when your coverage ends. They’ll need to check with their insurance provider or human resources department for information on how to do so.

Your parents may also add you to their insurance plan as a dependent if you’re under the age of 26. Since your job loss would be considered a “qualifying event,” you may join their plan at any time, not just during open enrollment.

While this option will cost your spouse or parent additional money, it’ll likely cost less than investing in your own health insurance plan. You can always pay them for your share of their premium.

Enroll in COBRA

Best for: People who want to keep the health insurance plan they had when they were employed until they find a different, more affordable option

The Consolidated Omnibus Budget Reconciliation Act of 1986, more commonly known as COBRA, gives employees who lose health insurance coverage the right to continue receiving it for a limited time after they quit or get laid off.^[2]

Though this choice feels ideal, COBRA tends to be quite expensive because it requires you to pay the full premium plus a 2% administration fee. If your employer helped cover your health insurance while you were employed, it’s now up to you to fund the entire tab. Also, COBRA typically expires after 18 months from the date you quit.

Shop on the ACA Marketplace

Best for: People who don’t mind shopping around to find affordable coverage for themselves and their families

Thanks to the Affordable Care Act (ACA), you can use the Health Insurance Marketplace on Healthcare.gov to shop for your own coverage. The tool will allow you to compare the prices of various individual and family plans so you can home in on the right one for your specific insurance situation. It will also help inform you if you’re eligible for any premium tax credits or special programs, like Medicaid or the Children’s Health Insurance Program (CHIP).^[2]

The ACA Marketplace offers a special enrollment period for people or families with a qualifying life event, like the loss of employer-sponsored health insurance. Depending on your special enrollment period, it will either start 60 days before or 60 days after the event.^[3] Compared to COBRA, Marketplace plans tend to be more affordable.

Explore Medicaid or Medicare

Best for: People with low income or those who are at least 65, have a disability, or have end-stage renal disease

Medicaid is a federal program designed to help low-income Americans with health insurance coverage. If your income reaches up to 138% of the federal poverty level, you may be eligible to sign up through your state.^[4] Medicaid offers affordable health insurance coverage with no or low premiums. But your income can’t exceed a certain threshold, and finding providers that accept Medicaid coverage can be difficult.

Medicare provides coverage for those who are 65 or older, living with a disability, or have end-stage renal disease. Part A, also known as hospital insurance, is free if you’re at least 65 and have worked and paid Medicare taxes for at least 10 years. You’ll have to pay a premium for Part B, or medical insurance, and Part D, which covers prescriptions.

Learn More: The Difference Between Medicare and Medicaid, Explained

Consider temporary health insurance

Best for: Healthy people who want health insurance coverage for unexpected medical bills until they find a long-term solution

Also known as short-term health insurance, temporary health insurance can help bridge the gap while you search for long-term coverage. Since the ACA doesn’t regulate this type of insurance, the coverage doesn’t need to provide the minimum essential health benefits, like inpatient and outpatient hospital care, mental health services, and prescription drug coverage. Coverage for pre-existing conditions also isn’t mandatory.

This temporary coverage typically lasts for 12 months at a time and may only be renewed twice. Fortunately, you can sign up for it at any time and don’t have to wait for an open enrollment period like you would with other types of plans.^[5]

Read More: Do I Need Health Insurance Coverage?

Tips for choosing a health insurance plan

Not all health insurance plans work universally. As you shop around for a policy after you quit your job, consider these factors:

• Plan types: Many types of health insurance plans exist. An HMO plan, for example, comes with lower premiums but requires you to stick to a certain network of doctors and hospitals. A PPO plan, on the other hand, is more flexible and has fewer restrictions on seeing out-of-network providers but typically comes with higher premiums.

• Deductibles: A deductible refers to how much you have to pay out of pocket before your health insurance plan kicks in. If your plan has a $1,000 deductible, it will cover any expenses you incur above $1,000.

• Premiums: A premium describes what you pay your health insurance company for your coverage — typically paid on a monthly basis. A plan with higher deductibles will come with lower premiums, while a plan with lower deductibles will have higher premiums.

• Medication coverage: Since prescription medications can be expensive, be sure to consider what’s included in a plan and how much you might have to pay out of pocket for the medications you take on a regular basis.

• Copays and co-insurance: Copays are flat fees you must pay for covered services or medications. Co-insurance refers to the percentage of medical bills you must pay for certain services or medications.

See More: How to Get Health Insurance Without a Job

Health insurance after quitting a job FAQs

Here are answers to some frequently asked questions to give you more information about securing health insurance after you quit a job.