What Happens To Your Benefits When You Leave Your Job

Tom Gilmour is a senior director of Planning Experience Integration for Northwestern Mutual.

Whether you’ve been let go or furloughed from your company or found your next dream gig, leaving a company typically means making decisions about benefits like health insurance and retirement accounts.

First things first: If you were let go from your job, you will likely want to look into whether you qualify for unemployment benefits. These can be an important financial bridge to help you get to your next gig. So, make sure you’re tapping into them if you can.

Next, let’s go through some common benefits that employers typically provide as well as some you might not have been thinking about. You’ll get ideas about options.

Benefits to consider when leaving a job

1. When does health insurance expire after leaving a job?

One of the biggest worries people have when leaving their jobs is what will happen to their health coverage, which usually ends on either the last day of work or the end of the month.

If you’ve got a new job lined up, you may not have a big gap to worry about. Some companies start health insurance coverage for new employees on their first day. If your new company has a waiting period (typically between 30 and 90 days), an earlier start to the coverage may be something you’re able to negotiate as part of your job offer.

If you’re facing a gap in health coverage, there are options. Thanks to a federal law referred to as COBRA, you can continue your current health coverage at your own expense for 18 months. So, you don’t need to switch your coverage right after you leave your job. The downside is that you will have to pay the full cost of the plan—which is typically expensive. You’ll cover your typical portion plus what your employer was paying on your behalf.

Another option you may consider if you’re married is switching to your spouse’s coverage. While health plans typically allow you to sign up only during open enrollment, you’re typically able to make changes if someone in your family experiences a qualifying life event like losing coverage.

If you’re in the market for an individual plan, the best place to start your research is at HeealthCare.gov. You can buy coverage there and easily switch to your new employer’s plan at a later date, so long as you give your insurer 14 days’ notice.