Taking Time Off Between Contracts - What Do You Need To Know?

ScrubHood is built by travel nurses, not a staffing agency. Our advice about taking time off isn't shaped by anyone's need to keep you placed.

One of the real advantages of travel nursing is that you can take a month off between assignments and nobody has to approve it. Go home, see people, take that European trip that you normally wouldn't have enough vacation days for. That flexibility is exactly why we started travel nursing in the first place.

But you need to understand what changes the moment your contract ends, and health insurance is the big one. Spending a bit of time to understand this while you're still in contract will help if you do decide to have a gap in between contracts.

A note: this is general information, not insurance, tax or legal advice, and the details depend on your agency, your state and your situation. Rules and prices change. Check specifics with your agency's benefits administrator and a tax professional who works with travel healthcare.

Health insurance: find out your exact end date, not the general rule

This is the single most important thing to get in writing before you finish a contract.

Agency health plans usually end either on your last day worked or at the end of that calendar month. Which one it is makes a big difference to how long your gap actually is, and agencies vary. Some also have a bridge or grace period that keeps you covered for a set number of days between assignments, and some will keep you on the plan if you sign your next contract within a certain window. Ask your recruiter or the benefits team directly: what is the exact last date I am covered, and what do I need to do to extend it?

Once you know the date, you're choosing between a few options.

Stay on the agency plan through COBRA

COBRA lets you continue the same plan you already had, typically for up to 18 months. Same network, same doctors, no new deductible mid-year.

But it's not cheap. You pay the entire premium, including the part your agency was covering, plus an administrative fee (2% under standard COBRA rules), so what felt like a reasonable deduction from your paycheck can become several hundred dollars a month or more.

Make sure you understand the timings properly. You generally have 60 days from losing coverage to elect COBRA, and then 45 days from electing to make your first payment. If you elect, coverage is retroactive to the day your old plan ended.

Some travelers use this as a deliberate strategy: wait, stay uninsured on paper, and only elect if something happens that you need covered. It works, but make sure you understand what it actually costs. Retroactive coverage means retroactive premiums. Elect on day 55 and your first bill covers every week since your plan ended, so you're paying two months of full premiums in one hit to get coverage you've already used up most of. Waiting doesn't save you money, it just delays the decision and concentrates the bill. And if you miss the 60-day window entirely, the option is gone.

Buy a plan on the ACA marketplace

Losing job-based coverage is a qualifying life event, which opens a Special Enrollment Period so you can buy a marketplace plan outside the usual fall open enrollment window. That window is time-limited (typically 60 days), so don't sit on it.

Two things changed for 2026 that you need to price in.

The enhanced premium tax credits that made marketplace plans much cheaper from 2021 through 2025 expired at the end of 2025 and were not extended. KFF estimated average premium payments more than doubling as a result. The standard ACA premium tax credits still exist and are still worth a lot depending on your income, so don't skip the marketplace assuming there's nothing there for you. Just price it based on current premiums rather than going off what a colleague paid in 2024.

The bigger change is that the subsidy cliff came back. From 2021 through 2025 there was no upper income limit on subsidies. For 2026 the hard cutoff at 400% of the federal poverty level has returned, roughly $62,600 for a single person in most states (higher in Alaska and Hawaii). One dollar over that line and your subsidy goes to zero, not to a smaller number.

Here's where it gets interesting for travelers specifically. Subsidy eligibility runs off your modified adjusted gross income, or MAGI, which is essentially your taxable income after certain deductions like traditional 401(k) and HSA contributions. Properly structured tax-free stipends aren't taxable income, so they never enter that calculation at all. That means your MAGI can be far below what your bank balance suggests, and a traveler with a low taxable base rate plus a long break can land under the cliff when a staff nurse on the same take-home wouldn't. It's worth running the actual numbers with your tax professional before you assume you earn too much to qualify.

One warning before you count on it. Subsidies are advanced based on the income you estimate, then reconciled when you file, and from 2026 the caps on repaying excess credits are gone. Underestimate and you repay the difference. End the year over the cliff and you repay the entire year's subsidy. Overtime, completion bonuses and per-diem shifts are all fully taxable, so estimate conservatively and update your marketplace application if your income changes mid-year.

Marketplace plans are also state-based and network-based, which matters if you move around. A plan bought in your home state may give you very limited coverage while you're on assignment elsewhere, outside of emergencies.

Short-term or gap plans

Short-term health plans are cheaper and can often start within a day or two, which makes them tempting for a clean four-week gap.

They're also not ACA-compliant, which means they can exclude pre-existing conditions, cap what they pay out, and leave out prescriptions, mental health care or maternity. Availability and maximum duration vary a lot by state. If you're young and healthy looking to cover a short gap they can work fine, but if you have any ongoing condition or take regular medication, this might not be the best option for you.

Your own individual plan, all year round

Some experienced travelers skip agency insurance entirely and carry their own individual policy continuously, absorbing the cost into what they negotiate for pay. It costs more month to month, but nothing lapses when a contract ends, you keep the same doctors, and you're never scrambling. If you take breaks regularly, run the numbers on this.

If you have a spouse or partner

A partner's employer plan is usually the cheapest option available to you, and your loss of coverage is a qualifying event for enrolling in their plan too. Same 60-day-ish window applies. Check their plan's specific rules.

Your tax home doesn't take a break

The tax-free housing and meals stipends that make travel pay work depend on you maintaining a legitimate tax home, a permanent residence you keep paying for and regularly return to.

Time between contracts is actually helpful here. Going home during your break is exactly the kind of thing that supports a tax home claim. What causes problems is the opposite: staying in your assignment city, or traveling between places without returning home, which can make the IRS treat you as an itinerant worker and make your stipends retroactively taxable.

There's also the rule travelers know as the 12-month rule: work in one metro area for more than 12 months in a rolling 24-month period and that area can become your new tax home, which ends the tax-free treatment for assignments there. A break helps but doesn't reset the clock the way people sometimes assume. Talk to a tax professional who specializes in travel healthcare about your specific pattern.

Keep your credentials from going stale

Nothing delays a next contract like paperwork that expired while you weren't looking. Before or during a break, check:

• State licenses and renewal dates, including any single-state licenses you hold alongside a compact license
• BLS, ACLS, PALS, NRP and any specialty certifications
• Annual TB test or questionnaire, flu shot, and other immunization requirements
• Your compact license residency status if you're moving or changing your permanent address, which can change which state issues your license

Continuing education requirements are also easier to knock out during a break than during a contract.

Money: plan for a longer gap than you're planning

The break costs more than the lost wages. Your rent or mortgage at home continues, your insurance premium may jump from a payroll deduction to a full monthly bill, and your first paycheck on the next contract usually lands two to three weeks after you start.

So a "four-week break" is often closer to seven or eight weeks without income landing. Then add the front-loaded costs of starting the next assignment: travel, a housing deposit, and living expenses before that first check.

A few practical points:

• Build the cushion during your contract
• Know whether your agency offers a completion bonus and when it actually pays out, since that timing can cover part of the gap
• If you're on assignment when you decide to take a break, start lining up the next contract before you finish, because recruiters generally need lead time for submission, interview, offer and compliance paperwork

Retirement contributions stop too

This one is easy to miss because nothing arrives in the mail to tell you about it. No paycheck means no 401(k) contributions and no employer match for the length of the break. One month is noise. Three or four breaks a year, every year, is a real dent in decades of compounding, and the match is the part that stings because it's money you were entitled to and didn't take.

Two agency-specific things to check: whether their plan has an hours-worked or months-of-service requirement that a break can reset, and what their vesting schedule looks like, since employer contributions you haven't vested in can be forfeited if you leave the agency. Travelers who switch agencies often end up with several small orphaned balances, so it's worth consolidating them into an IRA rather than losing track. If you take breaks regularly, funding an IRA yourself during the gap is the simplest way to keep the habit going when there's no payroll deduction doing it for you.

Where ScrubHood fits in

Time off between contracts is one of the better parts of this job, and most of the stories you hear about it going wrong involve an insurance gap nobody planned for. Get your exact coverage end date in writing, pick your bridge option before that date passes, and go take the break.

When you're ready to line up the next one, use ScrubHood to check what a facility is actually like before you sign, from nurses who worked there and aren't earning a commission on your decision.

Related: how to pick a recruiter you can trust and what to look at in your first contract.