Company Health Insurance Ends When You Leave: How to Stay Covered

Your company health insurance almost always ends when your employment ends, often on your last working day. If you or your family have any health condition, or you're between jobs for a few weeks, that gap is a real risk. The good news is that IRDAI rules give you a way out: you can ask the insurer of your group policy to move you to an individual or family floater policy with them, and the waiting-period credit you've built up can carry over. But it's not automatic, and it has to be done before you leave.

Why the gap matters more than people think

Group health cover through an employer is usually generous. Pre-existing conditions are often covered from day one, parents may be included, and there's rarely a waiting period. A fresh retail policy you buy on your own is different. Most retail policies have waiting periods for pre-existing diseases and for certain specific illnesses or procedures. So if you have diabetes, a thyroid condition, or a planned surgery, buying a new policy after you leave can mean years before those are covered.

That's why "I'll sort out insurance after I join the new company" is risky. Your new employer's group policy may start only after joining formalities, and there may be days or weeks in between. A hospitalisation in that window is fully out of pocket.

Migration: the option most people don't know about

IRDAI's guidelines on migration and portability say that individual members covered under an indemnity-based group health policy, including family members, should be given the option of migrating to an individual or family floater policy with the same insurer when they exit the group. IRDAI's 2024 master circular on health insurance says that on migration, the credits you've earned, such as waiting periods served and the pre-existing disease waiting period, transfer to the extent of the sum insured.

Two catches:

• Migration from a group policy to an individual policy is subject to underwriting. The insurer can ask for medical details and may load the premium or decline.
• You pay the full premium yourself. Retail policies cost noticeably more than what you were paying (often nothing) under the group cover. Get the quote before deciding.

Also note that the waiting-period credit generally applies up to the sum insured you had. If your group cover was ₹5 lakh and you buy ₹10 lakh, the extra ₹5 lakh can come with fresh waiting periods.

What to do, step by step

Start this at least three to four weeks before your last day. Insurers and TPAs are not fast.

1. Find out who your insurer and TPA are. Your health card or the HR portal will show both. The insurer is the company that actually issues the policy.
2. Ask HR for the policy details: policy number, your membership period, sum insured, and the members covered. Ask whether the policy allows continuation or migration on exit.
3. Contact the insurer directly (not just the TPA) and say you want to migrate to an individual or family floater policy on exiting the group. Ask what documents they need and which products you can migrate to.
4. Compare. Get one or two quotes for a fresh policy elsewhere. If you're young and healthy, a fresh policy may work out fine. If anyone in the family has an existing condition, migration usually wins.
5. Make sure there's no break. The new policy should start the day after your group cover ends.

Porting later to a different insurer

Once you have an individual policy, portability lets you move to another insurer at renewal while keeping your accumulated credits. IRDAI's 2024 master circular asks policyholders to apply to the new insurer at least 30 days before, but not earlier than 60 days before, the renewal date. It also sets timelines through the Insurance Information Bureau: the existing insurer has to share data within 72 hours of the request, and the new insurer has to decide within five days of receiving it. The circular also says no charges should be levied for porting in or porting out.

If you've been laid off

Some employers extend group cover for a period after a layoff as part of the severance. Ask explicitly and get it in writing, including the exact end date. Our guide on what you're owed after a layoff covers the rest of the package, and this one is about getting the job search going again.

If you're covered under ESIC (generally lower-wage employees), the benefit rules are different. Check with your nearest ESIC branch office about continued eligibility after you stop working.

Questions to ask your new employer

Before joining, ask HR: when does group cover start (from day one, or after a waiting period)? Who is covered: spouse, children, parents or parents-in-law? Are pre-existing diseases covered from day one? Is there a top-up option? These details rarely appear in the offer letter but they can be worth tens of thousands of rupees a year. It's a fair question to ask while comparing offers; see comparing offers beyond CTC.

This is general information on IRDAI rules, not insurance advice. Policy terms vary, so read your insurer's documents and ask for anything important in writing.