There are many different reasons why you may have a gap in your health insurance, but it's important to stay covered. Even the smallest gap in insurance can leave you vulnerable to the high bills that an accident or sudden illness can cause. Fortunately, you can cover any gaps in your health insurance coverage with short term coverage.
Why You Might Need Short Term Coverage
The most common reason why individuals need short term coverage is that they are switching jobs. If you leave one job with coverage, you often have to wait a few months before coverage at your new position kicks in. Other instances where individuals might find a gap in their coverage include if the insured spouse dies, if a couple gets divorced, and when a child graduates college and is no longer covered by their parents' insurance.
If you are leaving a job with group health coverage, you may be eligible to continue your coverage if you meet the requirements set up by COBRA, or the Consolidated Omnibus Budget Reconciliation Act of 1985. COBRA requires companies with 20 or more workers to offer continued access to group insurance plans in the event that an employee or their dependents would lose coverage, such as at the end of employment (for reasons other than gross misconduct), divorce, or death. COBRA provides the option of 18 to 36 months of coverage, depending on circumstances. However, the premiums may be high for COBRA coverage. Departing workers can be required to pay up to 102% of their premium.
State Continuation of Coverage
Depending on your state's laws, you may be able to temporarily continue your coverage even if you're not eligible for continuing coverage through COBRA. This mainly applies to employees from companies with fewer than 20 employees, who are not covered by COBRA statutes. Individual states have statutes to extend coverage for 3 to 6 months, but the states that offer this are limited. To know if yours is one of them, you need to check with your state's health department or insurance commissioner.
Individual short term insurance is also a great stopgap if your health insurance coverage ends. Plans typically span from 30 days to six months. Beyond that period, an individual would need to seek a longer-term plan. Short term plans are not generally intended for preventative care measures, so deductibles and premiums can be high. To make the most of needing individual short term insurance, you should seek out an experienced broker to help you find the right plan to fill your needs and nothing more.