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Another health insurance question...
March 31, 2012 11:53 AM   Subscribe

Another health-insurance question - how to deal with an unexpected loss of coverage for my GF. Which of our options is best?

(YANML, YANMHRP)

My longtime, cohabiting, girlfriend (we're a hetero couple) is likely to be losing her health insurance as of Monday due to a change in her employee classification. Since she'll still be working, she likely won't qualify for government aid. She does have a few pre-existing conditions — none of which are life-threatening — and requires more than one prescription. We are in Minnesota, FWIW.

After some research, our options seem to be the following:
  1. She can begin paying for COBRA. This seems like the safest option, but is also just a means to an uncertain end (i.e. finding a new job, lucking out and having her status changed back, etc.). Plus the cost of this sounds intimidating.
  2. She can look for an individual plan. We're worried about the cost-value ratio and the possibility of being turned down due the fact that she will need to make prescription claims almost immediately. I've read about health insurance brokers who can help with this kind of thing — does anyone have experience with this?
  3. We can become domestic partners. My job allows domestic partners to share coverage. Neither my job nor our local laws specify that a couple has to be same-sex to quality for the status or for sharing benefits. Has anyone had experience with this? Am I correct in thinking the DP-ship is less of a legal/financial entanglement than marriage, which we're not quite ready for (see below) Furthermore, does anyone have thoughts on how common it is for employers to offer DP coverage that doesn't exclude opposite-sex couples?
  4. We can elope. This would guarantee coverage but it seems to be an overkill option. We do plan to get married, but want to do so in our own time and this seems like a decision with numerous financial and legal implications that shouldn't be rushed.
Any thoughts, red-flags, obstacles we haven't thought about, recommendations, or other insights? Many thanks.
posted by FreelanceBureaucrat to Law & Government (17 answers total)
 
It looks like domestic partnerships laws are local, not statewide, in Minnesota. What city/locality do you live in? In some jurisdictions, domestic partnerships are substantially less of a legal commitment than marriage, but some laws make them virtually identical to marriage in terms of obligations, so you/we would have to look at your local ordinance to determine what kind of law you have.
posted by decathecting at 12:02 PM on March 31, 2012


An individual plan that you can afford is likely to come with almost insurmountable deductibles. If your wife has pre-existing issues that require medication, she'll likely be a class 3 insuree. IIRC from when I had private BC/BS last year, my wife was a little over $300 a month for a policy with a $10,000 individual deductible. (She too was class 3 - the most expensive class). So we essentially paid $300 a month in order to maintain continuous coverage for her pre-existings, and we got to take advantage of BC/BS negotiated rates for everything we paid for out of pocket., which did help.

If she can swing COBRA it's probably going to be best coverage. I believe she'll have 18 months on it, so plenty of time to decide what to do next.
posted by COD at 12:58 PM on March 31, 2012


Do you know what COBRA actually costs per month, or are you jsut worried that it's going to be high? I think the first step would be to get a handle on that.

If the COBRA isn't too expensive, then she'll be able to stay on her current insurance for 18 months--which carries her through to August 2013. Assuming the Supreme Court doesn't overturn the health law this summer, then she'd only be looking at a 5-month period of uninsurance before she'd be eligible to buy insurance in the exchange, potentially with a big federal subsidy making her premiums cheap.

Minnesota also a high-risk pool (more info here) that would run a couple hundred bucks a month in premiums for her, depending on her age and what sort of deductible she'd be okay with. To qualify for that, she'd either have to exhaust all 18 months of COBRA coverage, or apply for an individual policy and be turned down. So if those premiums look do-able to her, one option is to elect COBRA coverage for a month or two to give her time to apply for an individual policy--if she gets it (unlikely, given her pre-existing conditions), great, otherwise that rejection qualifies her for a policy through the high-risk pool.

There's also MinnesotaCare, which provides state-subsidized coverage (not Medicaid, but similar--you pay a sliding scale premium). However, anybody eligible for employer-based health insurance in the past 18 months can't sign up, which means you'd have to ride out the COBRA period for this program as well.

Minnesota did just expand Medicaid eligibility to childless adults, so that's one last route that is probably worth checking into. Income limits are still pretty low--75 percent of poverty, or about $681 per month--but if she doesn't make much money it's definitely worth calling them up and at least walking through her potential eligibility.
posted by iminurmefi at 1:04 PM on March 31, 2012


Offering of opposite-sex DP options probably varies wildly by place but also by job type. My job history has been primarily in academia in Pennsylvania, and my workplaces have all offered opposite-sex domestic partnerships. We don't have statewide DPs, so signing up as DPs hasn't had any ramifications beyond at the job itself - once you quit the job, or file 'we're no longer domestic partners' paperwork with the job, all is done. I'm hesitant to advise you about whether that would be the same in your locale since you have local DP laws.

For whatever it's worth, when my opposite-sex partner lost coverage I signed him up as my DP and that's been great. It was very easy to do and I've had no regrets, his job history since then has been spotty and it's nice for insurance to be a thing we don't have to worry about.

It is the case at least for me, and I believe everywhere, that the DP benefits are going to be more taxable than your own health benefits, so you'd want to be prepared for an extra tax bite next year, but that may wind up being more affordable than COBRA - you'd have to run the numbers.

You'll also want to make sure you've checked your job's DP requirements carefully. They can vary from job to job. At my current workplace we met the requirements, no problem. My last job, our setup was exactly the same, but we were one requirement short. You can mix and match the requirements any number of ways, so if we'd wanted to become DPs then, we would have had to either open a joint checking account, or have a baby. I always thought that was pretty ridiculous, but such was the way their requirements were set up.
posted by Stacey at 1:06 PM on March 31, 2012


Whether or not you can get coverage as an "opposite sex" DP depends on your employer's coverage. My office is switching insurance and our previous plan didn't allow it, but our new one does. You just need to submit proof that you're living together and a notarized statement. Check with your HR department to see if they allow this.
posted by anotheraccount at 1:28 PM on March 31, 2012


If you can get the DP coverage, that seems like the best bet by far.
posted by Sidhedevil at 2:34 PM on March 31, 2012 [1 favorite]


We got married for health insurance. I would do it again in a heartbeat because I love him and he needs healthcare. But domestic partner benefits are illegal in Georgia, one of the brilliant side effects of their anti-gay marriage law is that nobody can get any of the benefits of marriage outside of marriage. If we could have done it with just DP, we certainly would have.
posted by hydropsyche at 4:57 PM on March 31, 2012


I've been on opposite sex domestic partner healthcare MANY times. It varies by state, employer, and health insurance, but here are some of the requirements:

- in Vermont, laid back company, required joint checking account
- in California, very laid back company, no evidence
- in Maryland, not laid back company, required lease with our names both on it, utilities with our names both on it, and (although this may have been for our kid) our kid's birth certificate with both of our names on it -- in that case we never SAID we were DPs, but there was an audit or something and we were asked to provide this stuff months later

But I think that it is worth trying to put her on yours and behave as if it isn't a big deal. Refer to her as your spouse or partner.
posted by k8t at 6:44 PM on March 31, 2012


Prior to getting married, we did the DP thing too, in both Massachusetts and NYC. To answer your question about 'entanglement,' it is generally true that DP is less 'binding' than marriage, if only because it usually requires people to live together, so you can dissolve it merely by separating your residences. You will actually have to provide more documentation of your 'togetherness' than married people do, and everywhere I've tried this, there is a sort of waiting period (i.e., you couldn't be considered DP until you had lived together for six months). But of course YMMV; I have no idea what MN and local laws are for you.

The insurance will definitely be more expensive for you if you choose DP over getting married, as Stacey was saying. The last I heard, insurance for a non-spouse, non-family member (i.e., a DP) cannot be paid for with pretax dollars, so you will pay taxes on the amount of the premium for your gf, and the premium for yourself as well (it won't be deducted from your gross pay before taxes are calculated) and then you will pay for it with post-tax dollars. Maybe someone who has done this more recently can inform on whether this is still the case. We didn't find it to be too much of a burden, but our premiums were much less (10 years ago) than they are today - I feel we would just have a paper wedding if it were now but no one can decide for you guys. Either way, it will probably still be cheaper than COBRA, but just don't be surprised by the taxes. Once my partner got his own insurance somewhere else, I also found I needed to follow up with my employer and make sure they switched my individual insurance back to pretax dollars (something you might need to check on, too, if you first do the DP route and then eventually marry). Hopefully, HR depts have become more accustomed to dealing with these things by now. Anyway, good luck - hope you find an option that works for you!
posted by Tandem Affinity at 8:07 PM on March 31, 2012


IAAHIW (health insurance worker). You definitely need to call your HR department on Monday morning. They can tell you if they offer DP coverage to opposite-sex partners, and also the requirements. This varies greatly by employer. If you work for a larger company, especially one that has employees in several states, they're more likely to have a broader definition of DP.

I am on mrsspinturtle's coverage. Even though we're legally married in the state we live in, because we're same-sex we're not federally recognized, so her employer recognizes us as DPs for HR purposes. Every few years they do a dependent audit (of all dependents, not just DPs) to verify that they're not covering ineligible dependents. For the one we just completed, it was a simple matter of filling out a form saying 'yep, still together', and sending in a copy of our marriage certificate and a bank statement with both names on it. They would also take a mortgage statement, lease, or utility bill with both names. Basically, they just needed to establish that we reside at the same address, and have a financial relationship.

Good news is, you have some time to figure out what is the best option for you. If COBRA works best, she has 45 days to decide to enroll. If you decide to enroll her as your DP on your insurance, you have 30 days from the qualifying event (her loss of coverage) to get all of your HR paperwork submitted, and she should then be covered as of that effective date.

HIPAA also established a concept called creditable coverage. This gives you (or your covered dependents) credit for the amount of time you were insured by one plan (called prior coverage) and applies it to the pre-existing condition exclusion period of a new plan. Prior coverage is not creditable if there is a gap of 63 or more consecutive days without coverage. (from this site, which, while a MS-specific site, has some really good info regarding HIPAA and creditable coverage.

Take a deep breath, know that you have more than a day to solve for this, and give a holler to HR. They're they to help you figure all of this out.
posted by spinturtle at 8:51 PM on March 31, 2012


Thanks for the responses!

What city/locality do you live in? We work in Minneapolis and live in St. Louis Park, which is probably where we'd file.


Do you know what COBRA actually costs per month, or are you jsut worried that it's going to be high? I don't actually, and I won't be able to find out until Monday. My mother was on COBRA for her and myself for a few months while I was in college and I remember her saying that it was significantly expensive — to the extent that I'm not sure it was any cheaper than an individual policy. But maybe that's not the typical case?
posted by FreelanceBureaucrat at 3:33 AM on April 1, 2012


As another bit of COBRA anecdata, my husband recently turned 26 & was bumped off his parents' insurance. They sent a letter offering COBRA coverage to the tune of about $700/month.
posted by asciident at 5:28 AM on April 1, 2012


COBRA costs are based on the cost of the actual group policy that your girlfriend had before she was bumped to non-eligible status. All COBRA means is that you're buying the same group policy you had before, but your employer isn't contributing to the premium at all, so you pay 100% (actually, potentially up to 102% to cover extra administrative costs). Usually, the sticker shock that people have is because their employer was not only offering a group insurance policy, but also (invisibly) picking up a big part of the premium. Nationally, I think the average is for employers to pay 70% of premiums, and employees to pay 30%.

It strikes me that if your girlfriend works at the sort of job where they'd re-classify a bunch of employees as non-eligible without warning, functionally leaving them uninsured, she might be working at a company that doesn't contribute very much to the premium anyway--in which case COBRA costs should be more comparable to what she's paying now than people working at more ethical employers. The kick in the nuts is that the premiums would no longer be pulled from her paycheck pre-tax, she has to pay with after-tax dollars.

Just something worth looking into, at least, before you make any decisions. It's almost certainly going to be more expensive than what she had before, but how much more expensive is open to question.
posted by iminurmefi at 7:36 AM on April 1, 2012


Another option would be to just go down to the courthouse and get legally married, but then plan for and hold whatever actual wedding you want down the road.
posted by gjc at 7:41 AM on April 1, 2012


I was in this situation a while back. If the DP thing doesn't work or it has time restrictions, I would go with COBRA. I used up my whole 18 months. The coverage was like 90% better than any individual plan I could find. Individual plans were around 300-500, and COBRA was a little under 700, but the quality was just worth it for me and how much I go to the doctor. I found individual plans under 1k sucked.

Another option, if she has or can get herself any freelance work, maybe freelancers union? I'm not sure that MN is covered--or anywhere outside NY--for their insurance, but it is good.
posted by manicure12 at 5:35 PM on April 1, 2012


You will have to do the math to see if the cost of COBRA is more than filling the prescription without insurance. As I found out when I left a job, you have about a month to elect COBRA coverage without counting as uninsured, so this isn't a decision you have to make just this second.

In Tucson, AZ, my now-husband and I registered as DP with my company to get him on my insurance, but we were required to wait until the enrollment period to make changes.

Best of luck!
posted by bookdragoness at 9:23 PM on April 1, 2012


Thanks for all the feedback. After looking at the cost of COBRA and the individual plans, we ended up signing up for DP coverage today. Better coverage at a more affordable rate, and it turns out the deduction is all pre-tax, which was a pleasant surprise.
posted by FreelanceBureaucrat at 8:25 PM on April 23, 2012


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