Getting Ready To Quit the W-2 and Go Full Time REI - What Are You Doing For Health Insurance???

Question

Hello All -

We are about a month away from getting completely out of all W-2 employment and going full time (hubby & I) in REI.  We have been thinking about this for a while and feel like we are in good shape to do so BUT, we have always gotten our Health Care through hubby's employment and need to find the best alternative.  We have 5 young(ish) children that will be on our policy so not looking for "catastrophic only" but good, comprehensive health coverage.  Don't believe in Obamacare so don't send me there.  We have AAA, AARP, both members of the American Bar Association, and my husband is a veteran (former marine).  I figured BP would be a great place to find people who have already cracked this issue as so many of you have already jumped off the W-2 train.

Would love to know what type of coverage, who it covers (just yourself, or a family with children) and about what it costs you monthly, if you are willing to share.

Thanks for any and all ideas!

Linda Weygant · Answer

I'm not sure what you mean by being "sent to Obamacare".  Obamacare, or the Affordable Care Act, is a body of laws governing health insurance.  It's not a destination.  The basics are simply:

1.  Children under 26 can be covered on their parents plan without being students.

2.  A bunch of regulations about employer sponsored plans.

3.  A requirement that every person have health insurance or pay penalties for non compliance.

4.  Health insurance companies cannot deny you coverage for pre-existing conditions.

That's pretty much it.

If you're thinking of the federal or state exchanges, all those are is a website where health insurance providers give you quotes for coverage.  You aren't "buying Obamacare" or "going to Obamacare".  You're simply going to a website and buying health insurance.

Since you don't qualify for any subsidies, you'll probably get the same price quotes at your state exchange or healthcare.gov as you will by going to each company's website individually.

In essence, by buying health insurance, you are complying with the ACA.  So I hate to break it to you, but you're already "buying Obamacare" just by the sheer fact of being covered by health insurance, whether it's a policy through your husband's work or a policy that you buy on your own.

You say you don't believe in it, but you're already complying with it, so what's the big deal?

Account Closed · Answer

I strongly suggest the help of an insurance agent.  There's no cost to you, so call one asap and tell them your plans and your needs.  The Affordable Care Act has nothing to do with your beliefs.  It's the law so you need to find suitable coverage or pay a fine. You wouldn't qualify for a subsidy, even if you were interested, unless your family income is under $90K.

You could be looking at paying a huge premium out of pocket for a family of 7 unless you buy something with a very high deductible or very minimal services .  At least $1K per month.  Don't quit your insurance coverage employment until you know you have found a suitable replacement policy you can afford and make sure it's in effect by a date where there is no insurance gap. A good insurance will look at all the options and any group policies you may be able to purchase.

Account Closed · Answer

Anyone who could previously have been denied coverage based on pre-existing conditions should be dancing in the streets.  Check!  Anyone with an adult child under 26 who can stay on their parent's (privately paid for) plan should be equally thrilled.  Check ! (I'm both.) I've yet to hear of anyone from either side on this issue turning down continuing insurance coverage for their adult children because they didn't "believe" in the Affordable Care Act. I've yet to hear from anyone who has volunteered to pay higher rates for pre-existing condition (now prohibited by law).

If the OP's family income for 2015 will be under approx. $90K, they should look into buying off their state exchange.  If not, there is probably little or no benefit to buying off the exchange.  Either way, they should be getting the help of a qualified insurance agent to make sure the current plan and new plan have no gap.  The OP mentioned AARP and the military.  If one of the family members is a senior or approaching Medicare age, that's something to consider.  As well as previous military service which may have special rates and plans.

DL Martin · Answer

Like you, I had coverage for 25 years through my employer (municipal government).

We are now on obamacare (I purposely did not capitalize it) and I don't think that there are any alternatives outside of employer provided health insurance.

We qualify for no "subsidy" because uh...well,  I guess the government has decided that we are "rich"????

Can self employed people establish some sort of medical spending account from which to pay obamacare premiums on a pre tax basis? And if so, what is the cost associated with establishing/maintaining that account? And finally, is the cost worth the benefit?

When I was a city employee, my health insurance premiums were deducted right off of the top of my gross pay, thereby decreasing my taxable income a bit. It would be nice if there was a mechanism for self employed people which offers this same benefit.

DL

Kadian F. · Answer

I would also check with your bar associations to see if they offer health insurance as well.

Shawn Davis · Answer

@Rob Golob and @Bradley Behr  - Thanks for the Cobra info and the "neat little trick".  We will likely be taking COBRA initially but as you know, it doesn't last forever so just trying to get a sense of what we will be facing after COBRA ends before we jump ship.  Thanks again for taking the time to repond!

@Lisa Thoele - Thanks for that practical information.  Is an HSA the same thing as a medical savings account?  Do you have yours set up in a self directed vehicle?  Finally, do you have any prescription coverage through your HSA.  This is one of those subjects that I just have not had occasion to think about prior to now.   I'm sure I'm not using all the right terminology, so please excuse my clumsiness:-)

Lisa Thoele · Answer

@Shawn Davis

Hello Shawn I think this has already been mentioned here but we have an insurance policy in Oregon through Regence with an HSA.  We've had it for about 5 years and its awesome.  We have a high deductible, low monthly premium (allows us to fund our HSA pre-tax).  It covers one check up a year for each of us with no cost and any basic medical stuff vaccines, mammograms, etc.  Anything else we pay out of our self-funded HSA pre-tax and goes towards our deductible.  I would call the big insurance guys in Oregon and see if they have any HSA options.  Best Wishes, Lisa

Rob Golob · Answer

@Bradley Behr

Thanks for the correction.  I will assume you are correct.  My recollection was from when I was offered COBRA many years and i'd bet my recollection was off (By abouit 30 days.......)

Bradley Behr · Answer

Please be aware there is a 60 day limit to opt into COBRA, not 90. Some companies may provide longer, and I assume Rob may have run into a 90 day time frame personally or through another individual, but 100% of the people I ever talked to had only 60 days.

source: (I am a former insurance salesman), and

http://www.dol.gov/ebsa/faqs/faq-consumer-cobra.html, Question 8.

Rob Golob · Answer

No one has mentioned it so perhaps the laws have changed, but it used to be (Still?) that you could opt for COBRA.

Basicaly, that means you continue the coverage as it is now with your employer but you pay the full premium. The amount that the employer paid for your coverage.

A neat little trick is to NOT accept the coverage for the first 89 days after separation.  Then if you have no claims, move on to other coverage at day 90.  If you do have claims in excess of the 3 months COBRA premiums, you can back pay and have the coverage back to the date of separation.

No legal advice given and I have no idea if this is still the prevailing policy / law.

Getting Ready To Quit the W-2 and Go Full Time REI - What Are You Doing For Health Insurance???

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