HSA with an HDHP coverage gap on first of the month, or, worse, coverage gap on December 1

Amazon / Eng
wawY45

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wawY45
Apr 18 6 Comments

It's very common people ask about health insurance coverage between jobs.

The answer:

(1) you get a free rider for 60d after separation to purchase #COBRA with retroactive coverage, meaning you only have to pay for it if you actually need it;

(2) quit with last day on the first of the month, get discounted healthcare until the end of the month. PROFIT!

What about being unemployed for 35d, or midmonth to the following midmonth, or on December 1 (presumably very common for people rage-quitting Amazon after the Nov vest).

Does it royally mess up the HSA limits, or is it okay? If you start a new job on Dec 2, or Dec 31, after last day of Nov 29, do you lose HSA limit for the whole month? Or potentially whole prior year if you were counting on Last Month rule?

Is this one of those cases where you pay for COBRA without actually needing it? Does it have to be by the whole month?

Or are there any exceptions for a gap on employer plans?
Or do they start on first of month even if you start midmonth?

#insurance #medical #health

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