When will my company provided health insurance stop covering me?
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Asked October 14, 2013
The misconception with company provided health coverage is that your insurance ends when your employment does. Until the mid-1990's this was the way employer-sponsored health insurance worked, but COBRA was passed in 1996 and changed the way health insurance works for individuals.
Your company provided health coverage will generally end 30 days after your employment ends, because insurance is purchased in advance, more like the way a mortgage works than a utility bill that you use the service before you can pay for it. During that 30 days period, you should receive paperwork from the employer's HR department on how to make use of COBRA. You can also contact the insurance company directly for the same information.
COBRA will allow you to continue your employer provided health coverage for up to 18 months, and can be extended to 36 months under certain circumstances. The drawback of using COBRA for health coverage is that you have to pay a processing fee to initiate coverage, and then you must pay the full premiums, including any portion that was previously paid by the employer.
Financially, it is in your best interest to replace the employer provided health care as soon as possible. COBRA is a much more expensive method of paying for health insurance, and is only intended to prevent you from immediately losing coverage when your employment ends. While using COBRA, shop around for a new health policy, either through a website like this one, or through a group plan offered through an organization you belong to, such as Sam's Club or AARP.
Answered October 14, 2013 by Anonymous