New Job-- more $, lose benefits. Stay or Go?

October 16, 2005 1:02 AM

My husband has applied for a different job within his company, and he seems to be getting signs that they want to hire him. It's more money, he likes the people better, and he thinks this may eventually offer advancement either within the company or outside of it. The catch? No benefits.

I've got several chronic health conditions (diabetes, asthma and carpal tunnel being the most serious) and the thought of being without health insurance is terrifing to me. My health conditions are all well under control at the moment, but there are no guarantees it will stay that way. We've also got a toddler and want to have another child. My job is currently taking care of one other child as well as my own. The likelyhood of me being able to get a job with benefits is, realistically, very, very low.

My husband thinks that the increase in income will offset the loss of the benefits, and we can either get a family plan or pay cash. I worry that I'll be denied coverage due to my current health conditions, or that if we pay cash something catastrophic will happen and we'll end up owing hundreds of thousands. (This is in Denver, if that makes a difference to anything.)

How do we go about weighing the costs to make sure that if the job is offered, that we aren't setting ourselves back financially by taking it? Has anyone been in a similar situation and can point out anything that might not be obvious at first? Obviously, I don't wish to be a stumbling block to my husband's career-- but neither do I want a sudden downturn in my health to destroy him financially.

posted by Shoeburyness to work & money (11 comments total)

My wife recently just took a promotion from union to management. She did not lose all benefits, but took a serious reduction in benefits.

All we did was figure out how much the benefits were worth, and subtracted that from the raise they offered. So say it cost $X a year to get the same benefits we had. When they offered her a raise of $Y, she countered with: "you just offered me a raise of $(Y-X); I need that loss of benefits offset before I can consider this job."

It worked for her. YMMV.

So I'd figure out as precisely as possible what it will cost to replace your current benefits exactly, and make that value well known to the employer, and require some serious offset of that value. (This is important, as for my wife the 10% raise they offered, which sounded OK at first, was a pay cut with the benefit loss factored in. She negotiated an actual raise after that).

This was hard for my wife, for the reasons you list (she did not want to turn this promotion down). But it is not at all fair for the company to promote you and give you no increase in pay. So it behooves you to find out exactly what your current benefits are worth, so as to avoid that (it was easy for us to figure out, because we could buy into the same health plan we had, but just pay a much larger share of the cost).
posted by teece at 1:33 AM on October 16, 2005

Getting decent health insurance for a family, and with pre-existing conditions covered, particularly diabetes, is going to be extremely expensive. Even for limited coverage I would estimate at least 15k/yr, probably quite a bit more. Is there any possibility your husband could get on the group plan if he was willing to pay whatever the company pays?
posted by cameldrv at 2:35 AM on October 16, 2005

He better ask around about what is available insurance wise FIRST. If you have preexisting conditions it makes it harder. And it is indeed very expensive.

During the short time I had insurance, my gall bladder had to come out unexpectedly (stone stuck in the duct.) The bill just for the hospital was over ten grand.
posted by konolia at 4:13 AM on October 16, 2005

It seems really strange to me that this new job, at a company he already works for, would cause him to lose his benefits- but regardless.

What about if he asked the people who want to hire him for benefits? Something like "I know you really want me to take this job, but I can't do it unless you give me health insurance too." He could bargain with them, saying that he will forgo the raise in exchange of health insurance.

I think you're right to be skeptical and hesitant, FWIW. Especially with kids.
posted by elisabeth r at 4:19 AM on October 16, 2005

Also consider what happens when you move from group coverage (what your employer generally offers) to single coverage (what you can buy on your own) and try to go back again.

If you have single coverage for 6 months, and then are able to get into a group policy (say your husband's job changes, or you get some through your employer) they can deny your preexisting conditions for 6 months after joining. They can do this for an amount of time equal to however long you've been without group coverage up to 12 or 18 months, depending on your particular situation.

So hopping to a single coverage situation can have negative effects beyond whatever reduced coverage you get from the policy.

I have a chronic illness and basically single coverage is far too risky for me, not only because of cost and pre-existing condition exclusion, but also because it can mess up your future with a group policy.

All this is dictated by HIPAA. I used to have a great link where you can read through the law itself, but they've taken that down. This covers the relevant parts.

Is COBRA an option? I'm not sure how it works when moving within a company and losing benefits that way. That's still group coverage, but you pay the entire premium. It's expensive, but still group.

Maybe a part time job that will offer benefits would be good? This thread has some suggestions.
posted by FortyT-wo at 7:06 AM on October 16, 2005

Please, absolutely do not consider going without insurance and paying cash. My boyfriend (also with diabetes) was forced to go without insurance; after less than a year, he amassed an astonishing amoung of debt. And that's one person, without even one emergency, without having kids to consider. This is nothing to mess with. Doctor visits alone routinely cost more than $100 these days; imagine how they'll add up. And then you get a prescription for something that costs $200, $400, $600...

I'd second having him talk to his employer and see if there's a way he can stay on the group plan, even if it means him paying the full cost, or taking a pay cut, or whatever. If that doesn't pan out, look into the costs of private insurance and determine, as best you can, how they will deal with pre-existing conditions - both switching to private and switching back to group insurance. (I've never heard of them being able to deny pre-existing conditions if you were previously covered, even if it was private, but I wouldn't be surprised).
posted by hilatron at 11:08 AM on October 16, 2005

It's definitely worth your husband talking to the HR folks about whether COBRA would cover him (and if they say yes but don't give him something in writing to that effect, him writing an email to thank them and to state his understanding of what they said). COBRA would provide the same health coverage for at least 12 months, and presumably the salary increase would cover the costs (noting that if you're in, say, the 33% tax bracket, state and federal income taxes and SSA/FICA, then a dollar of extra pay results in only 67 cents of extra take-home money to pay for health insurance).

That would only protect you for a year or so (I'm not sure what the maximum is for COBRA - 18 months - HR folks would know), but it's something.
posted by WestCoaster at 11:11 AM on October 16, 2005

keep the benefits. they're more valuable than the job itself, sadly.
posted by brandz at 8:49 PM on October 16, 2005

Agree with brandz: Benefits can easily be worth more than the job itself.

Unfortunately, life is a crapshoot. If you manage to avoid appendicitis, you could still get involved in a car wreck through no fault of your own.

I don't think you can afford to be without medical insurance, but that's my opinion. I've done it both ways, and walking around with something that would be easily fixed if you had insurance is the pits. (Like torn ankle tendons.)

Whatever you work out, get it in writing, from HR, from the insurance, from COBRA. I know from experience that people will tell you anything on the phone, and having their name doesn't mean anything later.
posted by unrepentanthippie at 9:12 PM on October 16, 2005

I found out today that apparently whoever told him there would be no benefits was misinformed. (This was one of his would-be coworkers, not the actual boss.) He talked to the actual guy who does the hiring, and he definetely wants to hire him and has said he won't lose benefits.
posted by Shoeburyness at 10:26 AM on October 17, 2005

Shoerburyness — good deal! Congratulations, then on your husband's promotion with the benefits. ;-)
posted by WCityMike at 11:09 AM on October 18, 2005