This probably isn’t the sexiest topic for a blog post, but I think it’s important for people to consider when changing jobs. My biggest consideration on the topic of benefits was simply whether the employer provided health insurance. I had never considered how much I might have to pay for those benefits; I’ve been working for the government for the two years since law school and over a year before I went to law school. I’ve never worked for a small employer that provided insurance to me.
So, to begin with, I learned that my insurance benefits end at my current job on my last day of employment, not the last day of the month. Something I consider odd, and I may dig deeper to find out why my monthly premium isn’t providing me with a month of insurance when I get a chance. I also don’t have information on COBRA at this time.
Then I learned that there is a 90-day waiting period before insurance benefits will be provided at my new job. So I had to do some digging into the Affordable Care Act in order to determine whether I needed to pay for my own coverage in the meantime in order to avoid being penalized.
Some people have made comments that they didn’t think I would be penalized if I’m in a gap between employer-provided insurance. This is not correct. During this time period, I am not eligible for employer-provided insurance, so it is my responsibility to go to the Marketplace to purchase coverage. Otherwise, according to healthcare.gov, the fee is the higher of 2.5% of my household income (this equals $1,250 for a household income of $50,000) up to the total yearly premium for the national average price of a Bronze plan sold through the Marketplace, or $695 per adult up to a maximum of $2,085. If I am covered for part of the year, I just pay 1/12 of the fee for each month in which we don’t have coverage. So if I don’t have coverage for July, August, and September, if my household income is $50,000, it looks like I’ll have a penalty of $312.50. Not to mention the cost of paying out-of-pocket for all medical expenses we may incur during that time period. https://www.healthcare.gov/fees/fee-for-not-being-covered/
Unless I have a gap of two consecutive months or less. That’s a “short gap” exemption. The long and short of this exemption is that if I have coverage for even one day in the month of June, I can not have insurance during July and August and as long as I have coverage during September, I will not incur any penalty. Unfortunately, this exemption will not apply to me because my insurance will not begin at my new employer until October 1. https://www.healthcare.gov/exemptions-tool/#/results/2016/details/short-gap
So then I look for other exemptions. https://www.healthcare.gov/exemptions-tool/#/ In utilizing the exemptions tool, there are questions for whether I have declared bankruptcy or been evicted in the past three years. Nope. It asks if I have any tax dependents who have been denied Medicaid or whether I’m not enrolled in coverage because I’m appealing a Marketplace decision. Nope. Do I have medical expenses that I couldn’t pay that resulted in substantial debt in the past 3 years? No. Have I experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member; received a shut-off notice from a utility company; was I homeless; experienced domestic violence; death of a close family member; fire, flood, or other natural or human-caused disaster? Still no. Also not a tribal member, or a member of a recognized health care sharing ministry..I don’t even know what that is, or a member of a recognized religious sect with religious objections to insurance. I also was not incarcerated. So then I input some information regarding my income for the year. Unfortunately, this part is really hard for me because my husband owns his own business; his income is not a set amount each month or each year, and there is the possibility that his business will produce losses which will decrease our taxable income.
Fortunately, insurance coverage is considered unaffordable if it is more than 8.16% of my household annual income. The cheapest plan that I can find on the Marketplace for my husband and I is $475.98 without a subsidy. This plan has a $13,400 deductible for the two of us, an amount so high that it would be impossible for us to afford to receive medical care while also attempting to pay the premiums each month. Particularly because deductibles are not pro-rated to account for how many months you actually have in which to meet the deductible before it starts again in January 2018.
So luckily, it appears that we will not be penalized if we choose to not have coverage for the months before I am eligible for coverage through my employer.
The next issue that arises is that I consider the coverage provided by my new employer unaffordable when considering the premium for double coverage (myself and my husband). And it’s not the employer’s fault; they provide a benefit based on the person that works there. The premium for one person is much more affordable than that offered for two. Strangely enough, the premium for two people is more than twice the cost of two individual plans. So then I’m back to looking at the Marketplace. And because my husband actually has medical needs, we can’t take a plan that has a ridiculous deductible. We also can’t choose any plan offered by Priority Health because they do not cover one of his medications which would cost us something like $200 each time he needs to fill it. Not to mention the medical costs associated with him not having it.
So, it appears that we will be purchasing insurance from the Marketplace at a premium rate of around $500 per month. My employer will still provide the insurance benefit if I don’t use their plan, and we will have coverage that approaches affordable and functional.
Now I just have to figure out how to find another $500 in our budget… I did ask my future employer whether there would be any way that I could pay for the new coverage pre-tax, but they haven’t gotten back to me on that. Welcome to the unsexy world of being an adult.