Health Insurance Gap

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Health Insurance Gap

Between jobs and health insurance.

You left one job to accept another one which doesn’t begin for a month. Or you are not covered under your new employer until a waiting period expires.

The Affordable Care Act requires you to have health insurance.  What do you do?

Under the Affordable Care Act, you can go up to three months in a row. For three months you do not have to pay a penalty on your federal income taxes for being uninsured.

If you’re lucky, you’ll be able to time your exit from your old job and the start of your new job. This way you are not without health insurance for more than 90 days.

Find out how long you will be covered under your current group health plan. Some plans end the day you leave. Some end at the end of the month in which you leave.

Find out from your new employer when your new health benefits will start.

Some employers used to require you wait a year for benefits. They can’t do that anymore.   Under Obamacare. Employees must be eligible to enroll in their employer’s health insurance within 90 days of their start date. It could be less.

These differences often depend on your industry. Some white collar jobs that are in demand wants to attract employees.  These jobs will typically have a waiting period of 30 days or less.

Other fields may not need to make their jobs as attractive and can force you to wait the full 90 days.

Once you know the end date for your current health insurance, the start date of your new insurance and how long you intend to take off in between jobs, you can decide how to fill your gap.

COBRA, allows you to continue to buy coverage under your employer-provided group health plan. Employers with at least 20 employees must give you this option when you leave your job or are laid off or fired. Buying a health plan through COBRA will allow you to meet the requirements for being insured.

Leaving your job is considered a “qualifying event,” which makes you eligible to sign up for a health plan outside of open enrollment.

Because it’s a qualifying event, you have 60 days to buy an individual health plan from your state health insurance marketplace or directly from a health insurance company, from your loss-of-coverage date.

You could buy a short-term health plan.

These plans are available year-round, even outside open enrollment. However, they will likely not count as sufficient coverage under the Affordable Care Act, and you can be rejected. Consider this option if you have no other access to affordable coverage and you want a safety net in case of a medical crisis.

The COBRA election and payment period gives many people a good way around the coverage gap, particularly those who leave one job for another, since the maximum waiting period for new hires is no more than 90 days.

And you have 60 days to make up your mind whether you’re going to elect COBRA or not. Then you have another 45 days to pay.

When you get your COBRA notice from your former employer, it will tell you that you must elect coverage by a certain date.

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