Recently, I had some significant unexpected medical expenses (no need to worry, everything is ok). These expenses caused me to start thinking more about medical costs during my planned sabbatical and how I will cover them.
Right now, my entire family is covered by medical insurance through my employer. While I used to have a vague understanding that the Affordable Car Act would be available to us when I take my sabbatical, the recent health care expenses caused me to look into that more seriously.
Health Insurance Options When Taking a Sabbatical
Here are the options available to you for health insurance during a sabbatical:
1. Stay On Your Current Employer’s Plan
If you are lucky enough to be able to take a sabbatical where you still keep your job, then you may be able to negotiate staying on your current employer’s health care plan. Depending on your exact situation, this will be different for every individual, so be sure to discuss it with your HR team.
That said, if you are returning to your job at the end of your time off, hopefully your employer will allow you to pay them for your portion of the health insurance premiums. This way, not much will actually change for you.
2. Sign Up for COBRA
You can also pay for COBRA if you leave your job to take your sabbatical. However, this cost is the same amount your employer pays for you (which is likely extremely expensive).
You should get a tax form every year that states how much your employer contributed towards your health care. If you have a family and decent coverage, this is likely to be $20,000 or higher!
Plus, you need to add your own out-of-pocket contributions. These typically come out of each paycheck. So, if you are paying for COBRA, these charges could be around $2500 or more a month.
3. Enroll in Your Spouse’s Health Care Plan
If your spouse is eligible for coverage, you and your dependent should be able to join his/her plan. Even if you leave mid-year, when a person loses coverage mid-year from one plan, the spouse’s employer will typically allow a mid-year change since this is a qualifying event.
If you are worried about this and plan far enough in advance, you can also all switch plans during the normal open enrollment period in the late fall.
4. Sign Up for the Affordable Care Act
You are likely aware of the Affordable Care Act (aka ACA or Obamacare), but perhaps you thought you had to enroll during the open enrollment period in the fall. Timing the timing just right so that I would have coverage after leaving my job was the piece of sabbatical planning that had been causing me the most stress.
Upon further research, I found some good news:
You have 60 days from the loss of health care coverage to sign up for ACA!
What this means is that you have 60 days from the day you lose your health insurance coverage to get signed up for the ACA. You qualify for a special enrollment period because you lose your health insurance when you leave your job (typically the coverage from your employer will stop at the end of the month).
This is unlike unemployment insurance, which you aren’t eligible for if you voluntarily leave your job. With the ACA, you can still sign up.
The Bottom Line
You will probably want to do some initial cost estimates to help you budget for your sabbatical. Then, plan to devote a few days to finalizing all costs and enrollment forms after you’ve started your sabbatical.
While it may be a bit challenging to navigate and will cost more than you currently pay through your employer, the good news is that you will have coverage.
Update: Since writing this post I have quit my job and gotten health care coverage under the ACA. Read more about it at How to Get Health Insurance if You Quit Your Job.
This post is part of our Sabbatical Sundays series. To read more, click here.