Health Insurance
There is usually a waiting period at a new job before you are eligible for health insurance. You still need health insurance coverage during that period. You can choose between using COBRA insurance or a short-term health insurance policy.
A short-term insurance policy will cost less but is considered catastrophic insurance, meaning you will have to pay a large amount of medical expenses before the insurance starts covering your medical bills. The short-term insurance policy is also exempt from providing some of the coverage required under the Affordable Care Act.
When enrolling in a new health insurance plan through your new job, you may have different policies to choose from. Choose the most cost-effective plan that will provide you with the coverage you need.
If you do not need extensive coverage, you may choose a cheaper plan. You may want to consider a high-deductible insurance plan, especially if your employer will contribute to a Health Savings Account (HSA) on your behalf. Try to avoid mixed plans that have high deductibles but do not start providing full coverage once reached.
Retirement Benefits
A new job means a new retirement plan. Many people leave behind 401(k) retirement accounts as they progress in their careers. They forget to roll over their 401(k) accounts or find it complicated. However, rolling over your 401(k) makes it easier to keep track of your accounts.
You can roll over your 401(k) into a new 401(k) account at your new job. Be sure to ask for help from a retirement plan administrator, as you will need to follow certain rules to ensure there are no tax consequences.
Another option is to roll over your 401(k) into an IRA at an investment firm or your bank. This may give you more options for the funds to include.
Note: If you have a 401(k) loan, you may need to pay it back when you leave your job, depending on your employer’s rules. If you fail to repay the balance or keep up with payments, it may be reported to the IRS as a withdrawal and subject to income tax.
There may be a waiting period before you can start contributing to a 401(k) account at your new job. If this is the case, do not stop contributing to retirement. Set up a monthly contribution to an IRA until you are eligible for an employer-sponsored 401(k). Enroll in the benefits and any matching contributions you are entitled to as soon as you are eligible.
Other Health Benefits
When you start working, you should have the opportunity to enroll in a Flexible Spending Account (FSA) as well as other types of insurance. A good starting point would be to look at what you had before leaving your old job and see if the coverage is similar to what your new job offers.
You may find that the dental plan is better at your new job and worth enrolling in. On the other hand, a vision plan may not be worth the money you pay. It is important to recognize that as your family changes and you age, some benefits will become more important to you than they were when you were young, single, and healthy.
Moving Expenses
If you are relocating for the new job, be sure to explore your new area before signing a lease. You should also use a financial moving checklist to make sure you change all the addresses you need, close accounts, and keep yourself from late payments and other hassles that come with moving.
If the company is paying for your moving expenses, ask to know the procedures and rules. You may need to work with a specific moving company or gather bids from a limited number of providers. The company may pay the provider directly, or you may need to pay upfront and request reimbursement. Be sure to keep your receipts.
Note:
You cannot deduct moving expenses from taxes for the tax years 2018-2025.
Frequently Asked Questions (FAQs)
What happens to health benefits when changing jobs?
Your former employer may continue to pay your health insurance until the end of the month you leave the job. Your new employer may have a waiting period before you are eligible for coverage. You can try to negotiate for prior coverage to be included as part of your job offer. Otherwise, you should plan for separate insurance during the gap in coverage, either through COBRA or a short-term health insurance policy.
Does my maximum start over if I change jobs?
Your maximum is the amount you pay out of pocket for healthcare before insurance begins to cover. Unfortunately, you cannot transfer this amount to a new health plan, so your maximum will reset when you change jobs and obtain new health insurance.
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Sources:
– Texas Department of Insurance. “Thinking About a New Job? Don’t Forget the Insurance.”
– Washington State Insurance Commissioner. “What You Need To Know About Short-Term Medical Plans.”
– Ameriprise Financial. “What Should You Do With Your 401(k) When You Change Jobs?”
– Vanguard. “Stay Put or Roll Over?”
– Internal Revenue Service. “What If I Am Searching for a Job?”
– Internal Revenue Service. “What If I’m Searching for a Job?”
– Blue Cross Blue Shield Blue Care Network of Michigan. “What Happens to My Health Insurance When I Lose My Job?”
Source: https://www.thebalancemoney.com/career-change-a-guide-to-switching-your-benefits-2386336
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