You've just landed a new job and you're excited about proving your worth to your new employer. Despite your excitement in accepting the job, you're concerned about your insurance benefits not starting right away. Should you play it safe and find some other coverage or take the risk of waiting until you're eligible for company insurance?
Many new employees find themselves in this precarious situation of waiting as long as 90 days for their insurance to take effect. Some learn the hard way that sickness or injury can occur at any time.
Let's suppose you're starting a new position as a magazine writer. You're happy with your salary but your benefits don't take effect for a month. However, accidents can and do happen; you could be on the hook for some large medical bills.
So let's look at a couple of viable health insurance coverage options that would keep you from paying these emergency expenses out of pocket.
Coverage in the Health Insurance Marketplace
One of your insurance options is to purchase health insurance coverage through the Marketplace created under the Affordable Care Act. This federal health care law mandates that Americans get health insurance coverage unless they meet specified exemptions or pay a fine. The penalty for not having health insurance in 2016 is up to $695 per person or 2.5% of your annual household income.
Each month you're classified as "uninsured" will require you to pay one-twelfth of the full 12-month penalty. But if you're uninsured for no more than two consecutive months, you don't have to pay the fine, according to Healthcare.gov.
Since your insurance at your new job starts in a month, you might not have to pay a fine for going without health insurance (depending on how long you might have been without insurance in your job search).
Short-Term Medical Insurance
Short-term medical (STM) is designed for temporary transitions such as your waiting period for the new job. This temporary insurance would protect you from emergency medical costs until your company insurance takes effect.
If eligible, you can enroll quickly to start your coverage right away. Another benefit is that you can choose the doctor or hospital that you like without having to pay out-of-network penalties.
STM is not a permanent health insurance solution. You will be subject to the tax penalty if you use an STM policy as your only health coverage and you are not covered by an ACA-compliant plan at any point during the year. Short-term medical insurance does not meet the benefits required by the ACA. It is not subject to guaranteed issuance, renewal, policy maximums, and also contains exclusions.
