From personal milestones to economic shifts, we all go through moments that force us to adapt – sometimes without warning. Post-pandemic, many Canadians are still navigating life transitions, like changing jobs or coping with inflation. Some of these changes mean losing access to employer-sponsored private health insurance, which puts individuals and families at risk of uncovered medical costs.
While Canadians rely on public health care, it’s limited. Essential services like mental health care, vision services, and prescription drugs often receive little to no coverage under provincial or territorial health care plans.
The important point here is that life transitions – whether planned (like starting a business or taking a sabbatical) or unexpected (like job loss or divorce – can lead to a lapse in health insurance.
The key point here is that life transitions – whether by choice (i.e. sabbatical or starting a business) or not by choice (i.e. job loss, divorce) often lead to losing health insurance.
"When it comes to maintaining health insurance coverage, the key is to plan ahead and to avoid any gaps in coverage. Health insurance is an important way to financially protect yourself against unexpected health losses. Even a short period of time without health insurance can result in unexpected costs and significant financial losses." says Nathan Chidwick, Underwriting Specialist, GMS.
Let’s explore why it’s crucial to keep your health insurance intact during life transitions and the steps you can take to protect yourself.
Life Changes That Can Impact Your Health Insurance Coverage
Losing a job or switching employers is one of the most obvious ways your health insurance could be affected. But it’s far from the only situation where your coverage might be at risk. Here are a few other scenarios to consider:
- Parental leave: While on maternity or parental leave, your employer may not continue your benefits. This is especially important if you don’t have access to your partner’s plan.
- Sabbatical or extended leave: Depending on your employer’s policy, extended time off could mean losing your health benefits.
- Divorce: If you’re covered under your partner’s health plan, a separation could result in losing your dependent status, leaving you uninsured.
- Retirement or self-employment: These changes often coincide with increased health care needs. Losing access to an employer-sponsored plan can mean facing higher medical costs out-of-pocket.
In any of these cases, not having health insurance can add financial strain, especially if unexpected health issues arise.
Why Gaps in Health Insurance Are Risky
It’s understandable to feel uncertain during a life transition, especially when it comes to finances. You might even think about delaying signing up for a new health insurance plan until things settle down. However, going without coverage—even temporarily—could leave you vulnerable to unexpected medical expenses.
“Even if you're healthy today, unexpected medical emergencies or new conditions can arise. Without coverage, your out-of-pocket costs can be significant. Health insurance provides financial protection and stability. It can be overwhelming to manage financial uncertainty at the same time as dealing with significant health challenges.”
Another risk: most private insurance plans won’t cover pre-existing conditions, so it’s better to secure coverage before any new health issues develop. Additionally, you’re more likely to enjoy lower premiums if you’re insured while still healthy, since premiums are often based on your medical history.
How to Plan Ahead and Avoid Gaps in Health Insurance
The best way to avoid losing your health insurance during a life transition is to plan ahead. Here are a few proactive steps you can take:
- Check your employer’s policy
If a job change is on the horizon, find out how long your current coverage will last. Some employers extend benefits until the end of the month, while others stop coverage as soon as your last day of work.
- Research new employer benefits
When looking for a new job, ask about health benefits and how long the waiting period is before you’re eligible. Some employers have a waiting period for new employees.
- Consider dependent coverage
If you’re going on leave, check whether your partner’s plan can cover you as a dependent during your time off.
- Create a financial safety net
If possible, save three to six months' worth of living expenses to help cover the transition between jobs and any health-related costs.
- Explore private health insurance options
If you anticipate a gap in your coverage, research private health plans early. Signing up for a plan before your employer benefits end can prevent any lapses.
GMS Health Plans: Bridging the Gap
GMS has flexible options to meet your needs.