So, I have a long-term freelance opportunity that it is just too attractive to turn down. But taking it means I have to leave my current 9-5 job, with its stable, cheap, 9-5 healthcare coverage.
I’m happy with my current coverage–it’s a PPO, lets me go to almost any doctor I need without much rigamarole, and is cheap cheap cheap: about $300 a month for myself and my wife.
If I go COBRA and have to start paying the entirety of the premiums myself, what am I likely to face, dollarwise? (I can’t call the HR dept. to find out just yet, since the deal isn’t 100% final and I don’t want to tip my hand yet … but I still want to know what costs I’ll be facing ASAP.)
It depends on your coverage now, how many dependants, etc. I can’t be more specific than that, but I can relate my own experience.
While employed, my insurance premiums were about $120.00/mo. for me and my wife, in a PPO plan. No kids living at home.
When I was laid off my COBRA went to just about $500.00/mo. (sorry I don’t remember exactly).
In Jan. of the following year, that increased to approx. $625.00/mo.
If it was just me, I would have just chucked it, I can pay for a lot of doctor visits and prescriptions for $650.00 a month, but the wife insisted we keep it for catastrophic illness and the like.
Also COBRA runs out after 18 months.
Gives you a new appreciation for employer paid health benefits, huh?
I’d work on the assumption that it will be about $1000 per month. If it is cheaper, consider that a bonus, and perhaps a very short-term bonus. Health insurance costs are going through the roof. My coverage is similar to yours. In 2000, my insurance was about $600/month, now it is $1100/month – same insurer, worse coverage.
Depending on your situation, you might want to consider a MSA (medical savings account). COBRA doesn’t last forever (18 months?), and depending on how you use health services, you may be paying more than you need. The idea with an MSA is that you put money away tax-free in an investment account to use for health expenses. If you don’t spend everything in one year, you can let it ride and use it later. You must combine this with high-deductable insurance, that will cover you in case of a large expense. This insurance will be cheaper than other health insurance due to the high deductable (about $5k for families, I think).
Catastrophic illness is one thing. It can get very expensive very fast. The other thing is price – people without insurance are positively screwed by the health care industry. The price that insurance companies pay to the doctor/hospital/lab is typically at a 30% to 70% discount. If you don’t have insurance, you get the pleasure of paying 100%.
If you get an MSA and high-deductable insurance, you will get the advantage of negotiated rates and tax-free money to pay for costs out of pocket.
5cents, I don’t know if we’re talking about the same thing, but money contributed to a Flexible Spending Account (pre-tax contributions to a fund able to be used for medical and childcare expenses) is not able to be rolled over into subsequent periods, or refunded. See here for the federal guidelines. There may be more information on the IRS website, but I haven’t found it yet.
If we’re talking about different things, then I apologize and please disregard.
FSA != MSA. This just in… the law that authorized MSA expired in December 2003. But fear not, there is a new TLA (Three Letter Acronym) that is a replacement for MSA, passed as part of the recently passed Medicare Drug law: HSA.
I’m on COBRA right now. Last year, when my husband changed jobs, the two of us were on the policy at $653/month. My son was added, when he was born, at no additional charge. In January, that cost went up to around $750/month. My husband went with the insurance at his new job (no charge), my son went on individual insurance ($88/month), and because I can’t go on individual insurance (lupus), I stayed on COBRA at $282/month.
That sort of gives you some idea of one person vs. two vs. family costs. This was for a Blue Cross/Blue Shield PPO, which I think is very good coverage.
When I was laid off a couple of years ago, my COBRA premiums were around $300/month for just me, and I’m in my early 30’s and very healthy. I shopped around and found decent coverage for about $90/month that didn’t include regular doctor visits, but covered catastrophic illness. A much better deal, IMHO, unless you have $210 worth of medical bills every month.
Basically, my advice is to shop around. If you’re relatively young and healthy, you should be able to get a comparable policy for cheaper than what your COBRA premiums would be.
You could ask your HR Dept what percentage of the full premium you’re paying now as an active employee…just say you’re curious. Most employers pay 70 or 80% of the premium for active employees. Cobra premiums can be 102% of the full premium. In your current situation you would only be eligible for 18 months of Cobra coverage.
There’s just no way you’re going to get any useful information from a survey of people because the critical question is what % of your premium your employer pays. COBRA will cost 102% of your current premium, including both the part you pay and the part paid by your employer. If you have an employer with excellent benefits, you’re probably going to be screwed when you go on COBRA because your employer covers a lot of the cost for you. If you have an employer with crappy benefits, your COBA costs probably aren’t going to go up very much at all. But nobody here on the SDMB can answer this because we don’t work in your HR department.
In larger companies, many HR departments have info sheets that contain this information so you don’t have to ask anyone dirctly. It may also be in your employee handbook.
