When You Quit a Job, When Does Insurance Expire?

Leaving your job doesn't have to mean giving up your health insurance. The federal Consolidated Omnibus Budget Reconciliation Act of 1986 -- COBRA -- enables many former employees to continue their health insurance for up to 18 months after they leave their job. Depending on your specific circumstances, your time may be different. Without COBRA, health insurance usually expires at the end of the month in which you quit.

COBRA

• COBRA applies to companies that provide group health insurance to employees, and had 20 or more people employed for more than 50 percent of typical business days in the previous year. If you were covered by the plan the day before you quit, then you can keep it. You will, however, pay both your share and the employer's share of the premium, so the cost per month will go up considerably. The plan administrator should contact you about continuing coverage; you have up to 60 days to accept.

Disability

• If the Social Security Administration rules that you're disabled while you're on COBRA, you can present that letter to your plan within 60 days of receiving it to gain an extension on your health insurance. The disability rating entitles you to a further 11 months of COBRA coverage, though the premium during this period can rise as high as 150 percent of the regular cost. If your policy covers other members of your family, they'll also be covered for the extra months.

Losing

• Like regular health insurance, you can lose COBRA coverage if you don't pay your premiums. You only keep COBRA as long as your employer's health insurance plan is still in place. If the company decides to cut benefits by cutting the plan, you lose yours too. You also lose your coverage if the company goes out of business. If the plan continues, some insurers will allow you to switch from the group plan to individual coverage at the end of your 18 months.

Considerations

• If you're young and in good health, you might do better with a cheaper, less generous policy than paying for the full COBRA package, especially if you're in a state where the health care market is competitive. If you're older, take expensive drugs or have recurring health problems, COBRA may be the best deal. One way to save money at the start is to leave early in the month; if your policy covers you until you quit, than can postpone having to pay for COBRA for two or three weeks.