3. INQUIRE ABOUT HEALTH INSURANCE, UNUSED VACATION DAYS, & 401K

Only after you've discussed your resignation with your boss and your final workday has been identified should you deal with fun issues like health insurance, unused vacation days and your 401K. First, consult the company handbook (assuming there is one) for guidance on how they deal with these issues. Second, pay your Human Resources department (or whoever in the company handles these matters) a little visit. Keep it between you and HR - that's what they're there for. Make sure all your concerns are settled before you leave, and then follow up if any promises aren't being kept.

Health Insurance

Thanks to Congress, there is a Federal law that companies must continue their health insurance coverage for up to eighteen months after an employee leaves the company. To take advantage of this, just ask to sign up for COBRA. COBRA stands for Consolidated Omnibus Budget Reconciliation Act. We think Congress had a special subcommittee to come up with that name and another to come up with its accompanying scary acronym. You will need COBRA because most companies do not start insurance coverage until after your first 90 days of employment. The only problem is that you have to pay the full cost of the COBRA coverage, and it's not cheap. But it's better to pay it than take a chance on not being covered. You just don't want to tempt the gods of chaos. In any event, you must check with your new company to see when health insurance begins to make sure that you don't get left in the lurch.

Unused Vacation Days

Most companies will cut a separate check for unused vacation days. Some have the policy of "use 'em or lose 'em." Luckily, this is rare. However, you should avoid using your leftover vacation days as part of your two weeks notice. We've already discussed how you need to use your final two weeks to wrap everything up. Copping out of your final responsibilities just to get back a few vacation days will do irreparable damage to your reputation. What if you need your current employer as a reference? It's just not worth it.

It's also policy at some companies that if you exceeded your vacation days for that calendar year, then they will deduct the cost from your final paycheck. Ouch.

401 K

You have three options of what to do with the 401K you have with the company you are leaving.

  1. Leave it where it is. It can stay there until you retire. But the company will no longer be contributing to it and neither will you. The company doesn't mind keeping it because it helps their overall portfolio. However, as time passes and you become more removed from them, it will be harder to arrange your 401K's departure from their coffers.

  2. Cash it out. Sure, you can turn it into cash. But first, you pay a 20 percent penalty for cashing it out early and then the government taxes you on the part that's left. Some deal, eh?

  3. Roll it over. This is your best option. You can roll it over into a personal 401K or one with your new employer. Either way is fine, it's up to you. Just make sure you get the proper paperwork filled out as early as you can.