What Happens When Health Insurance Ends?

Extended health coverage goes away when you leave your job. Here’s how to adapt.

test

Salary may be the biggest factor in where we choose to work, but it’s not the only. Benefits, such as dental, medical and physiotherapy, also play a role in our job choices. The better the benefits, the more attractive that job may be.

Unfortunately, when a job ends, whether from a layoff, a retirement or maybe you’ve left to start your own business, so too do the benefits. That can leave you paying for all your pharmaceutical and dental needs. So how can you prepare for a life without benefits? We explain.

Typically, you have 30 to 90 days to convert your workplace coverage to individual coverage with the exiting insurance provider. If you don’t then those benefits will lapse.

Move fast

The first step is to be prepared, says Bonnie Siemens, Manager of Insurance Product Delivery for Investors Group. Typically, you have 30 days to convert your workplace coverage to individual coverage with the exiting insurance provider. If you don’t, then those benefits will lapse. “Miss that window and you’ll lose your opportunity to continue coverage,” says Siemens.

If you do let it lapse, you’ll have to re-sign with that provider or find another carrier. If that happens, you may have to take a medical exam, which could lead to higher premiums or exclusions for pre-existing conditions. Having certain medical conditions — even if it’s one that you successfully manage — might mean a total refusal. “In a worst-case scenario you might not be able to get any coverage at all,” says Siemens.

Plan ahead

If you’re retiring, quitting a job or suspect there will be imminent layoffs, start doing some research. Find out how long your employee benefits will last after you leave, how long you have to convert your plan, and what coverage plans your insurer offers.

Siemens says that people moving from group plans to individual ones often experience sticker shock. “They are amazed at how much more an individual plan costs. Their group plan was partially or wholly paid for by their employer, and suddenly they must bear the total cost of their individual plan,” she says.

Determine what you need

“Make time to look at various carriers and plans,” says Siemens. “Get quotes, compare rates and know what you really need.” It could be cheaper to switch plans if you have no pre-existing conditions. You might also find another provider has better offerings. Some professional organizations also provide access to less expensive insurance.

No matter who you sign with, though, you can save money by going with less coverage for dental or not using perks like massage therapy. But keep in mind, this is insurance: it’s not just for covering your health needs now, but protecting you for what might happen in the future. If your coverage has limits and a family member has an accident or gets a serious diagnosis, you may end up paying for those extra costs out of pocket.

Consider also the complexities of health coverage in retirement. Most provinces cover drugs for people over 65 — and you may feel that’s enough. Many insurers offer extended health coverage targeted at seniors to deal with dental, hospital rooms and even travel. “Look for the best replacement options and earmark enough money to pay for your coverage,” says Siemens.

Above all, seek the advice of a professional advisor when you leave a job and its insurance perks behind. Make sure you have the health coverage you need — and assess your other coverage types such as disability and life, too, says Siemens. Good health coverage comes at a cost so make sure you’re getting good value.

Written and published by Investors Group as a general source of information only. Not intended as a solicitation to buy or sell specific investments, or to provide tax, legal or investment advice. Seek advice on your specific circumstances from an Investors Group Consultant. Insurance products and services distributed through I.G. Insurance Services Inc. (in Québec, a Financial Services Firm). Insurance license sponsored by The Great-West Life Assurance Company (outside of Québec).

Have Questions

Our advisors will consider your financial goals and help find the path to get you there.

Find an Advisor