Jim, My Employer Is Discontinuing Health Insurance Coverage And Is Going To Pay Me The Cash To Buy Insurance On My Own. My Wife Thinks I Should Quit My Job, What Should I Do?
I just read an article on this last week in USA Today. The idea of dropping company paid health insurance and instead giving employees the money to buy their own coverage is a growing trend, but not new. For many years, I did this in my businesses. I became very frustrated with how little employees seemed to appreciate my payroll costs. I found out very quickly that we could pay an employee $200 to $250 per month in extra salary and simply discontinue our group health insurance plan and save thousands. This worked for me, since most of my employees were younger and many did not have families. Also, we had no one on the payroll that had any significant health issues. One of the big problems we had was finding good health insurance for a company with only 20 employees. It seemed like we were too small to really gain access to ‘big company benefits’ but large enough that employees expected it. We took a poll of the employees and it was unanimous that they wanted the extra cash.
Should you quit your job over your employer’s decision? It would certainly have to be a consideration based on your own individual circumstances. Taking a few hundred dollars extra and buying your own insurance may work for some and not for others. If you have a pre-existing medical condition, you may not be able to obtain coverage outside of a group. You may also find that the amount you would have to pay would be much higher than others, even if you can get someone to cover you despite a pre-existing medical issue. This really would come down to for me an analysis of my current situation and how great a priority employer paid coverage is. For a younger person in good health, without a family, this may be just fine. For others it is simply not going to work.
When my company was paying out cash instead of providing health insurance, people got creative. In my own case, when my daughter Faith was born, my wife and I worked out a prepayment plan for the cost of the child birth. We paid $400 per month for 9 months and we were able to pay for the medical costs without any additional charges at the time Faith was born. We did have a major medical policy in place that would have covered any complications that would have raised the medical bills. This was a way that we adjusted to the situation, but not everyone can do this especially with a pre-existing issue such as Cancer or Diabetes, or a host of other diseases that drive rates through the roof.
Before quitting your job, I would make some phone calls to health insurance agents and see what is available to you in your area. I would also check out www.ehealthinsurance.com for additional options.
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