If I quit my job next year and travel, what about Health insurance?
August 2, 2017 8:23 AM   Subscribe

Where can I find other options/resources to look into as alternatives to COBRA that will be cheaper and still not be counted as a "lapse in coverage" (Both for while traveling and after traveling but before any new job)? A few more specific questions inside.

Open enrollment is approaching so I can change my health plan through my employer. There is a low-deductible PPO and HMO and a high-deducible PPO and HMO. The latter (high deduct) both include an HSA. COBRA is an option for all of these but with monthly payments from ~$600-800.

My biggest worry here is having a lapse in coverage that will prevent purchasing future health insurance. I'm not as worried about the ACA "tax" for non-compliance, more so just making sure we don't get back and insurance companies won't insure us because of a lapse in coverage.

We've got plans and savings to quit our jobs and travel for an undetermined amount of time starting sometime next summer (maybe for 2-6 months).

COBRA is so expensive that we'll be paying more for that than the amount we'll be saving in no longer renting. And traveling internationally means we won't get to use most of the benefits of these plans.

Question 1.

I currently have the low-deductible HMO and am happy with it, but should I switch to the high deductible HMO (with HSA) during open enrollment, and then starting Jan 1 when it takes effect, make some big deposits into the HSA between then and my last date of employment? I assume the tax savings wouldn't be that great since my income will only be about half a year, but at least I'd get to take some of the employers money with me (that they deposit)? Thoughts on this?

Question 2

I've been recommended IMG Patriot travel medical insurance and Nomad, but would either of those prevent a "lapse in coverage"?

Question 3

Furthermore, when we're done traveling, but before we find new jobs, what do we do then?

posted by czytm to Work & Money (9 answers total) 10 users marked this as a favorite
Best answer: Another option is to decline your employer-provided insurance and opt to buy something similar to what you have on the private market. Then, you'd have something in-effect all year. The only penalty I'm aware for doing so is that you would lose eligibility for any financial assistance.
posted by Thorzdad at 8:42 AM on August 2, 2017

The Cobra plan from my (former, yippie) work was a bit cheaper and a bit better than the plans available through healthcare.gov. Depending on where you'll be traveling, you'll want to check on coverage for non-participating providers.
posted by theora55 at 8:55 AM on August 2, 2017

You can also switch to buying something on the exchange when you leave your job -- even though it's not open enrollment, a loss of health insurance through your job (even if you could buy COBRA) is considered a "life event" that allows you to enroll off-cycle. If you're not really planning to use the plan because you'll be away, you can always buy the cheapest bronze plan available (or even go with catastrophic if you're young enough that you're allowed to do that, the limit is under 30). The prices are different everywhere but when I did something similar for a gap of a couple of months between jobs, I think my plan was around $300/month with no subsidies, so definitely a lot cheaper than COBRA. You might qualify for subsidies if you're not going to have income for half the year -- I'm not sure how that works if you're more voluntarily unemployed and not looking for work, but you could talk to a tax person and find out.

I would also make sure to check the details on your HSA. Mine did not carry over after I was not longer on the health plan. So just make sure you plan ahead and don't lose money on that if your plan is structured that way.
posted by rainbowbrite at 8:57 AM on August 2, 2017 [4 favorites]

Best answer: There are three places to get U.S. insurance: COBRA, the exchanges, and the private market. The latter two are not the same. It's definitely worth it to look at all three options.

You know what your COBRA options are.

You can check what's available on the exchanges online. The value of the exchanges is that the government offers subsidies for people with certain income profiles, which might apply to you if you quit your jobs; the downside of them is that the insurance plans offered are generally worse than those offered the other two routes.

To find out what's available in the private market, contact an insurance broker. They're free and know an unbelievable amount on this arcane subject.

There's a fourth option too: international travel insurance. This is surprisingly inexpensive. Google "international insurance" and you'll find a whole range of options. These plans cover you based on which world regions you'll be in, and do have some U.S. coverage too, but you can't buy them and just live in the U.S. They're one of the most amazing discoveries I've made.

Once you get information on plans from all four sources, you can compare. You're right to keep your coverage, but seem to undervalue the importance of actually having insurance. You'll want to see which offer repatriation coverage and overseas treatments, and be sure to get both. Ask me why I know how essential this is, and I'll tell you about an unknown pregnancy, a snowmobile accident in the Arctic, a stingray sting in Thailand, food poisoning in Paris, and a car accident in Italy (those Italian drivers have a reputation that's well deserved).

HSAs do not disappear, FYI. They're yours forever. I think rainbowbrite must be talking about FSAs, which are plan-dependent.
posted by Capri at 11:49 AM on August 2, 2017 [1 favorite]

Best answer: I am pretty sure that losing losing your employer-provided health insurance is a qualifying event that lets you choose a plan off healthcare.gov, even outside of the open enrollment period. I don't believe it matters if you voluntarily quit or you were laid off -- all that matters is there was a change in your health insurance. There are other qualifying events, such as moving to a new home. So whenever you quit your job to travel, you will trigger a qualifying event and you can pick a new private plan off healthcare.gov. COBRA sucks -- everytime I've been offered it, it's been insanely expensive -- so paying out of pocket for a plan is your best bet. There are some pretty cheap plans you can get there, especially if your goal is merely to prevent a lapse in coverage.
posted by AppleTurnover at 11:57 AM on August 2, 2017

Will all your travel be in the US? Because US health insurance does not apply out of the country. For that, you'd need to buy travel health insurance.

Along that same vein, it's worth noting that health insurance policies can have punishing costs if you are not treated by a provider in your network. When traveling that might be quite difficult to manage. Just something for you to keep in mind when you shop around. If I were in your position (and I have, alas, just dreamed about it), I would first look at national insurers like Blue Cross/Blue Shield or Aetna first, and ask about what happens if you are out of your home area. A lower cost policy will probably have a very tight group of local providers and significantly less attractive coverage if you're out of network.

If your COBRA coverage is through a large, national insurer, it might actually be reasonable to accept that option.

One last thought - the last time I left a job, I timed my last day very early in the next month so that I would be covered until the end of that month. It just gave me low cost and continuous coverage, as my new job would not cover me until the beginning of the month following my start date. You could perhaps apply this concept and cover your first month traveling for less $$ than COBRA.
posted by citygirl at 12:25 PM on August 2, 2017

Best answer: You can absolutely go on the exchange and get insurance, and you should be able to get financial assistance if you have no/little income. You'll need a letter or some other proof from your past employer that you have resigned. After getting laid off, I got an exchange plan for a month, then went back to COBRA when I needed actual medical care (I'd already paid my max out of pocket, so the care was "free.").

I'm not sure if you can read the full policies in an exchange plan (rather than just the summaries) before choosing one, but either do that or call them to figure out if there is travel insurance.

You can also wait for a certain period of time to sign up for COBRA (can't remember if it's 90 days?). It will say very clearly in your plan. Let's say you resigned yesterday and don't elect any insurance. You get hit and injured by a bus in mid-October. You can sign up for COBRA then and it will be retroactive to when you resigned. (You'll owe all 3 months of premiums, but that's probably less than your hospital bill.) You'd still need travel insurance if your COBRA doesn't cover that.
posted by AFABulous at 12:29 PM on August 2, 2017

Best answer: Travel health insurance plans like Nomad do not count as health insurance for Obamacare or for "lapses in coverage". Also, arriving back in the US is (probably-some caveats apply) not a life event that makes you eligible to start a new policy, so your basic plan should be to buy a cheap insurance policy when our quit your job before you leave the country, and just pay the premiums while you're away so you have it when you get back.

Depending what state you live in, being unemployed my make you eligible for Medicaid or for generous subsidies on the exchange (with subsidies, if you are not unemployed for the full year, you will likely owe taxes on it later).
posted by the agents of KAOS at 3:02 PM on August 2, 2017

Best answer: Just to be clear at the start: almost no (I'm hedging here out of habit, I've literally never seen a counter-example) US-based health insurance plans will cover care while traveling internationally. The only exception is emergencies: if you experience an emergency (often defined as "a threat to life or limb") while traveling, you'll go to the ER, pay out of pocket, and submit a claim to your insurance carrier to be paid back what they would have covered. This will usually be covered at the out-of-network rate.

As others have said, if you leave your job you're not just eligible for COBRA, you're eligible to enroll in a Marketplace plan. This is usually the much cheaper option, especially since being unemployed or low-income may mean you're eligible for subsidies that will lower the cost.

Also as others have said, you can waive (decline) coverage through your employer and enroll in a Marketplace or private-market plan now, so you don't have to deal with COBRA at all later. But: because you have the option of health insurance through your employer, you won't be eligible for any subsidies or cost breaks. Until you leave your job, in which case you may be eligible.

Another note: Depending on the particular COBRA rules your company is subject to (based on its size and/or state), when your employment ends, you'll likely only be eligible to enroll in your current plan--that is, you likely won't be able to enroll in one plan now, then choose another via COBRA. If you think COBRA is the route you want to go, pick the plan now that you'll want to keep long-term. Or, if you're comfortable, ask your company's benefits manager or your insurance carrier (they won't tell your employer that you're asking).
posted by rhiannonstone at 5:44 PM on August 2, 2017

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