If your health-care needs entail more than an annual physical, keep this in mind: Signing on to a new health plan mid-year means starting from scratch on spending toward the deductible and out-of-pocket maximum.
“For some people, that’s several thousand dollars,” said Karen Frost, senior vice president of health strategy and solutions for Alight Solutions.
(Depending on your health-care needs and the timing of the job switch, it may make more sense to elect for continuing coverage under COBRA for the rest of the year than to reset the clock with a new plan, Frost said.)
In the new job, there could be a gap before you’re eligible for coverage, WageWorks’ Dietel said, potentially affecting both costs and care. In 2016, nearly three-quarters of new employees faced a waiting period before health coverage kicked in, with the average lag nearly two months, according to the Kaiser Family Foundation.
“The biggest summation is, don’t just look at the money,” she said. “It’s not just about money. It’s about quality of life and continuity of care.”
How to limit exit costs
Research company policies. Before you give notice — and ideally, even before you start your job hunt — collect details on policies for your current employer related to bonuses, retirement vesting schedules and other pertinent benefits. Note any anniversaries or other key dates that would allow you to leave less money on the table.
Create an exit strategy. Based on what you find, come up with a plan to minimize what you’re leaving on the table. You might take advantage of final weeks to spend down an FSA, for example, or take a few weeks’ vacation that would otherwise be lost.
Beef up your emergency fund. Rainy-day money could help ease transition costs like lost income due to a missed bonus, or help cover expenses such as the claw-back of an educational reimbursement, said Stanzak at Financial Empowerment. (Relocating workers may have other expenses worth anticipating, too, like covering moving costs.)
Examine new benefits. A better understanding of benefits could help you decide if a job offer is worth taking. It can also provide additional negotiation points, such as paid vacation time or access to parental leave, said Fitzgerald at Glassdoor. Advance knowledge can also help you plan financially for gaps, such as a delay in 401(k) eligibility or a wait on health insurance.
Time the transition. If you’re close to a key date for a bonus or retirement vesting, it may be worth trying to negotiate a later start date at your new job to stay in the current one a little longer, said Austin at Alight Solutions.
Monitor exit to-dos. Take note of any financial moves you’ll need to make after you leave your current job, Financial Empowerment’s Stanzak said. That might include electing COBRA coverage for your health plan, exercising stock options or rolling over a small 401(k) balance.