Managing Your Finances When Changing Jobs

Starting a new job can be an exciting experience. But as you look forward to a new career challenge, you should consider carefully how you will manage your finances while making the transition from one employer to another.

When you leave a job, your employer-provided benefits generally come to an end, unless you take action to have them continued. While you will likely receive benefits from your new employer, they may not be identical to the benefits your previous employer provided. Before leaving your job, think about whether there are certain benefits you want to take with you. If you have accumulated money in a 401(k) or similar retirement account, you will also have to decide how to handle those funds.

Keep Insurance Up-to-Date

If the employer you are preparing to leave provides you with health insurance, consider your options carefully. Your new employer may not offer medical insurance, or there could be a waiting period before health coverage begins. To avoid becoming uninsured, even for a short period of transition, explore your rights under your former employer’s health insurance for continuation or conversion.

 

Under a Federal law known as COBRA, you are permitted to continue as a member of your previous company’s health plan for up to 18 months after termination of employment. Under COBRA, you are responsible for paying the entire premium, including the employer’s contribution to the insurance, so COBRA premiums are usually expensive. However, they may be less than you would pay for an individual policy without COBRA. To continue coverage under COBRA, you must let your employer know within 60 days of leaving the job.  

 

COBRA continuation rights may not apply if you work for an employer with fewer than 20 employees. But, you may be able to convert your group health insurance policy to an individual policy without having to pass a medical exam. There also may be “interim” or “short term” policy options that would provide coverage for a couple months for people between jobs or moving from college to a job. As another alternative, you may need to secure an individual health insurance policy with a new provider that is not tied to your place of employment.

 

When leaving your job, you may also have the option of converting other types of employer-sponsored insurance into individual policies. Depending on the group plan, you may be permitted to convert life insurance, disability income insurance, or long-term care insurance.

Managing Retirement Plan Rollovers

If the employer you are preparing to leave provides you with health insurance, consider your options carefully. Your new employer may not offer medical insurance, or there could be a waiting period before health coverage begins. To avoid becoming uninsured, even for a short period of transition, explore your rights under your former employer’s health insurance for continuation or conversion.

Under a Federal law known as COBRA, you are permitted to continue as a member of your previous company’s health plan for up to 18 months after termination of employment. Under COBRA, you are responsible for paying the entire premium, including the employer’s contribution to the insurance, so COBRA premiums are usually expensive. However, they may be less than you would pay for an individual policy without COBRA. To continue coverage under COBRA, you must let your employer know within 60 days of leaving the job.  

 

COBRA continuation rights may not apply if you work for an employer with fewer than 20 employees. But, you may be able to convert your group health insurance policy to an individual policy without having to pass a medical exam. There also may be “interim” or “short term” policy options that would provide coverage for a couple months for people between jobs or moving from college to a job. As another alternative, you may need to secure an individual health insurance policy with a new provider that is not tied to your place of employment.

 

When leaving your job, you may also have the option of converting other types of employer-sponsored insurance into individual policies. Depending on the group plan, you may be permitted to convert life insurance, disability income insurance, or long-term care insurance.

 

 

Copyright © 2017 Liberty Publishing, Inc. All Rights Reserved.
PFJCHANG-AS