Job changer worried about insurance gap

March 14, 2012

Job changer worried about insurance gap

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By Rex Huppke / Chicago Tribune
Q: I work at a small company and am looking for a new job. My company is too small to have COBRA, so I'm worried that when I switch to my next employer, I'll have a monthlong gap in medical coverage. Is there something I can do? Or do I just have to pray I don't get sick? Will my next insurance ding me for pre-existing conditions because of the gap?

A: This is a big concern for anyone switching jobs. Although some companies have insurance plans that start covering new employees right away, that's far from universal; some have one-month waiting periods before benefits kick in, while others can be longer.

I spoke with Etti Baranoff, an associate professor of finance and insurance at Virginia Commonwealth University and an internationally recognized expert on the subject. (She's kind of the LeBron James of insurance, only more reliable in the clutch.)

There's nothing to worry about in terms of pre-existing conditions unless you're taking an unusually long time off between jobs, she says.

"You cannot have any break in coverage of more than 63 days," Baranoff says. "After that, any new employer's insurance plan can start you with new pre-existing conditions."

As for the gap, the only real option is to seek short-term coverage, which is readily available and, if you're healthy, not terribly expensive. It's not comprehensive, but it'll protect you against anything catastrophic.

"They can stop paying when the new employer's coverage begins, and it probably won't wind up costing them that much," Baranoff says. "Healthy people can buy -- for very, very cheap -- very good health insurance individually."

To find short-term policies, Baranoff suggested the website eHealthInsurance.com.

She also noted that gambling on a month or so without coverage is unwise: "If the person decides to go uncovered and slips on ice and has to go to the ER, he won't get any of the discounts that insurance companies negotiate. It can cost a lot of money to have a broken leg cared for."

Rex Huppke writes for the Chicago Tribune. Send him questions by email.