When you leave your job, your employer health insurance usually ends on your last day or at the end of that month, depending on the plan. You can typically keep it through COBRA if your employer has 20 or more employees, or switch to a Marketplace plan during a 60-day Special Enrollment Period. Group life and disability coverage usually end too.
Quitting, getting laid off or switching jobs comes with a long to-do list, and insurance is easy to overlook until you need a prescription filled and your card gets declined. A little planning in the weeks before your last day can save you from an expensive gap.
Here’s what happens to each type of workplace coverage and the options you have for replacing it.
What happens to your health insurance when you leave your job
Employer health coverage is tied to your employment, so it ends when the job does. The exact date depends on your plan. Some plans end coverage on your last day of work, while others keep you covered through the end of the month. Ask HR for the exact termination date in writing.
If your spouse or children are on your plan, their coverage ends at the same time. That’s important if anyone in the family is in the middle of treatment.
Once coverage ends, you have three main paths: COBRA, a Marketplace plan, or joining another plan such as a new employer’s or a spouse’s.
Option 1: COBRA continuation coverage
COBRA lets you keep the exact same employer health plan after you leave. It generally applies to employers with 20 or more employees. Here’s how it usually works:
- You typically have 60 days to elect COBRA after receiving your election notice or losing coverage, whichever is later.
- Coverage usually lasts up to 18 months, with longer periods possible in certain situations such as disability or for dependents after specific events.
- If you elect within the window, coverage is retroactive to the day your plan ended.
The catch: cost
With COBRA, you generally pay the full premium yourself, including the share your employer used to cover, plus an administrative fee of up to 2%. Many people are surprised by how much that adds up to.
Working for a small employer?
Federal COBRA doesn’t apply to employers with fewer than 20 employees, but many states have mini-COBRA laws that offer similar continuation rights. Check with your state insurance department.
Option 2: A Marketplace plan
Losing job-based coverage is a qualifying life event, so you typically get a 60-day Special Enrollment Period to buy a plan on HealthCare.gov or your state exchange. You can often apply up to 60 days before your coverage ends, which helps avoid a gap.
Depending on your expected household income for the year, you may qualify for premium tax credits. If your income drops after leaving the job, a Marketplace plan may end up much cheaper than COBRA.
Be careful with voluntary COBRA cancellation
If you choose COBRA and later decide to drop it outside Open Enrollment, voluntarily ending COBRA generally doesn’t qualify you for a Special Enrollment Period. Running out of COBRA at the end of your eligibility does. Compare options carefully before committing.
COBRA vs Marketplace at a glance
| COBRA | Marketplace plan | |
|---|---|---|
| Same doctors and plan | Yes | Depends on the plan you pick |
| Deductible progress | Usually carries over | Usually starts over |
| Subsidies | Generally none | Possible, based on income |
| How long | Usually up to 18 months | As long as you stay eligible |
Say you’ve already met most of your deductible and you’re mid-treatment with a specialist. Keeping COBRA for a few months might make sense even at full price. If you’re healthy and expect lower income, a Marketplace plan may be the smarter move.
Option 3: Another plan
- New employer plan: some plans start right away, others have a waiting period. Under the ACA, an employer plan’s waiting period can’t exceed 90 days.
- Spouse’s plan: losing your coverage usually lets you join a spouse’s employer plan mid-year, but the request window may be as short as 30 days.
- Parent’s plan: if you’re under 26, you can usually join a parent’s plan.
- Medicaid: if your income drops enough, you may qualify, and you can apply any time.
- Medicare: if you’re 65 or older, review your Medicare enrollment timing carefully to avoid late enrollment penalties.
What happens to other workplace insurance
Group life insurance
Employer-provided life insurance usually ends when you leave. Many policies let you convert to an individual policy or port the coverage, often without a medical exam, but you typically have a short deadline to apply. If you have health issues that could make new coverage hard to get, conversion can be valuable.
Disability insurance
Short- and long-term disability coverage through work generally ends with your job. Some policies offer conversion options. If you rely on your income, look into an individual disability policy.
Dental and vision
These usually end at the same time as your health plan and may be eligible for COBRA too.
HSA and FSA
Your HSA is yours to keep. The money stays in the account and can still be used for qualified medical expenses. An FSA is different: unspent funds are often forfeited when you leave, so consider using them before your last day. Some plans allow COBRA for an FSA in limited cases.
Before your last day: a checklist
- Ask HR exactly when health, dental, vision, life and disability coverage end.
- Request information on COBRA and any conversion options for life or disability policies.
- Refill prescriptions and schedule appointments while you’re still covered.
- Spend down FSA funds if possible.
- Compare COBRA costs with Marketplace prices for your expected income.
- Check your new employer’s start date for benefits.
- Mark the 60-day deadlines on your calendar.
Bottom line
When you leave your job, your insurance usually ends quickly, but you have options. COBRA keeps your current plan at full price, the Marketplace may be cheaper with subsidies, and a new employer or family plan may cover you. Deadlines matter, so act within 60 days. Rules vary by state, employer and plan, so confirm details with HR, HealthCare.gov or a licensed agent.
Frequently asked questions
How long do I have to sign up for COBRA?
You generally have 60 days from the date you receive your COBRA election notice or lose coverage, whichever is later. If you elect within that window, coverage is retroactive to when your plan ended.
Is COBRA or a Marketplace plan cheaper?
It depends on your income and situation. COBRA means paying the full premium, while Marketplace plans may come with tax credits if your household income qualifies, so compare both before deciding.
Does my health insurance end on my last day of work?
Sometimes. Some plans end coverage on your last day, while others continue through the end of the month. Ask HR for your exact coverage end date.
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This article is for general information only and is not insurance, legal, tax or medical advice. Rules, coverage and prices vary by state, plan and insurer. Check your policy documents and speak with a licensed agent, your HR department or HealthCare.gov before making decisions.
