Changing employers? Here’s your benefits checklist.
Changing employers can be both exciting and stressful. You likely evaluated your new employer’s benefits before you made the choice to switch, however, you may not have considered how some of your existing benefits are affected. You may be able to keep some of your insurance benefits, while others may disappear completely. As you close out your chapter with your previous employer, make sure you follow these important steps.
Check Policies for Portability or Conversion Options
Did you know that you may be able to keep some of your benefits when changing employers? Some insurance policies have what’s called “portability” or “conversion” that allows you to keep the policy, regardless of where you work. So, why would you want to keep your coverage instead of utilizing your new employer’s benefits?
In some cases, the price of insurance may be dependent on your age at the time of purchase. If you cancel your current policy that you’ve had for five years, your new policy premium may be more expensive. When you keep your coverage, most of the time you can maintain your existing premium amount.
You may also want to keep your existing policies so that you aren’t subject to a pre-existing condition limitation on a new policy. For example, let’s say you have received a cancer diagnosis and have filed a cancer insurance claim for treatment in the last 12 months. If you cancel your cancer insurance coverage and purchase a new cancer policy, that diagnosis may be considered a pre-existing condition, and your new policy may not pay for future related treatment.
Be proactive about researching portability or conversion options so that you don’t miss out. The timely payment of your premium is vital to keeping these policies, so you want to set this up as soon as possible. Call your insurance carrier to learn the process.
Research Your Reimbursement Account Options
Reimbursement accounts like Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) have different rules when it comes to changing employers. HSAs are individually owned, so these are usually simpler to maintain. Typically, you only need to investigate whether you will be subject to any account management fees, as sometimes your employer is paying these for you.
For Healthcare FSAs specifically, when your employment ends, access to your funds for expenses after you leave your employer also ends, unless you’re eligible to continue coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA). Learn more about what to do with your Healthcare FSA when your job changes here
Roll Over Your Retirement Funds
If you have an employer-sponsored retirement plan, you should consider whether or not to roll it over to your new employer’s plan or a third-party provider. Two reasons to roll over include:
- If your employer ever goes out of business or closes, your funds could potentially be held up in legal processes while their assets are sorted out.
- You may be missing out on interest in a higher balance account. Think about it – if you have $10,000 in one account, and $30,000 in another, combining them into one $40,000 account may result in a higher return.
If you have questions about how to efficiently transition your benefits from one employer to the next, contact your Human Resources department, account manager, or you can learn more about maintaining your coverage at americanfidelity.com/keep-my-coverage.
This blog is up to date as of October 2020 and has not been updated for changes in the law, administration or current events.