Is this investing in my future or is this a stupid decision?
December 15, 2013 4:22 PM   Subscribe

I've been offered to be hired where I have been a contractor. However, there is a health insurance issue that would cost me a lot of money for several months. But I would have a great retirement plan. I have nothing in savings and $100k I just consolidated in student loans, so this issue is just complicating things.

I would be hired on at the same salary. Currently, I pay nothing for my insurance and it's pretty great. My birth control is free and my ADHD med is $10/month. ($120/year).

The health care at new job (well, same job, just not as a contractor) is a percentage of your pay 1.5%. I would pay about $1000 per year for the insurance. This may go up next year to 2%. My Rx copays will be $15 each. So that's $30/month, $360 year. So I'd be paying at least $1240 MORE just in health costs. (Yes, I have an FSA and will also get the FSA new job offers.)

However, I would have a pension. It's a pretty well managed one and they match a significant amount. You are required to contribute 6% and they match all of your contributions, if not more. Last year they matched at 10%.

The part where I'm not sure I should take it...

For the first six months, the health insurance is basic only - no Rx coverage, no mental health coverage (I don't see a therapist, just my pdoc, who I will have to see at least once, if not twice during that six month period, and his rate is $85 with no insurance.)

The lack of Rx coverage means that I would have to pay out of pocket for the meds. I've called around and the cheapest I can find generic (which i take now) for the ADHD med I take is $375.99/month. It cannot be mail ordered. I cannot get a 3-month supply. I make too much to qualify for the state prescription plan and for the patient assistance program from the manufacturer and also for the Johnson and Johnson patient assistance program. I looked on GoodRx and they gave me a coupon for it, but it doesn't say what the amount is. I am going into CVS tomorrow to find out. If the site is not a scam, it could POSSIBLY take it down to $200/month. But I won't know until I go. (CVS is the place with the cheapest price.)

COBRA costs more than the medication. The insurance plans on the exchange start at $191/month, but then I'd have to meet a deductible of at least $1500 BEFORE the coverage kicks in for Rx and even then, most of the plans only cover 30% of the generic cost. The one that has an actual copay for meds has a $6000 deductible! Not to mention, I'm already paying for health insurance for 6 months that I can only use part of.

My med is not one of those $4 generics at Wal-Mart.

So, I probably would suck it up and pay out of pocket except I JUST finished consolidating my loans and will be looking at adding at the very least a $463/month payment.

I did talk with HR at new job and they are sorry there is nothing they can do. The offer is still open if I want it.

I really like what I do and would like to stay. I feel nervous being a contractor, like my job can just end at any time.

I started there earlier this year and my income doubled. It's the most money I've ever made and I think I could really move up in this job. I want to move up there. I get great reviews.

Assume I would be able to make whatever budget modifications were necessary, I don't need budgeting advice. This is about what seems to me essentially paying to get this job. I'll have less take home, but it's going for retirement and health care, so at least it still benefits me.

I've never been in a position to really think about my future in a job I like before. I have very few good life choices makers in my circle, so I just need some help figuring this out.

Am I fool if I take this? Or is this really investing in my future?

feel free to memail if you need more details.
posted by McSockerson The Great to Work & Money (14 answers total)
I did talk with HR at new job and they are sorry there is nothing they can do. The offer is still open if I want it.

What specifically did you ask them to do? Did you ask them about increasing the salary, changing the health insurance, other possible benefits to sweeten your package?

Also, is there someone you can talk to besides HR? Can you talk to your supervisor or whoever it is decided to extend this offer to you? Did HR offer to talk to that person?
posted by unannihilated at 4:29 PM on December 15, 2013

, I pay nothing for my insurance and it's pretty great. My birth control is free and my ADHD med is $10/month. ($120/year).

I'm confused. Why? Are you on your parent's insurance? You can usually decline insurance if you are already covered by a qualified plan.
posted by snarfles at 4:33 PM on December 15, 2013 [1 favorite]

Best answer: They match your pension contributions at 6-10%. Take the job. At 10% of your salary, that's $6667 per year, more than the temporary added cost at six months, much much more going forward.
posted by ssg at 4:37 PM on December 15, 2013 [4 favorites]

Costco Pharmacy, if one is nearby, may be cheaper than CVS.
posted by cairnoflore at 4:38 PM on December 15, 2013 [1 favorite]

Best answer: So the deal is that you need to pay for your prescription medications for 6 months before your full health benefits kick in, plus you get other benefits of a full time job including substantial contributions to a retirement plan?

Yes, I would take it.

I don't really understand why, exactly, you pay $0 for health insurance now, but most typical jobs with full benefits require you to pay about $100/month for your portion of the health insurance, with your employer picking up the rest. Any full time job you get you'll be stuck with that. The lack of drug coverage for six months is unusual, but unless you have another full time job on the table or any alternate on the horizon, this sounds like the stepping stone to the rest of your career.
posted by deanc at 4:38 PM on December 15, 2013 [6 favorites] is legit. In Chicago I use the coupon to buy generic adderall at CVS for about half what I paid for the same meds at Walgreens. (There is no GoodRx coupon for Walgreens.)
posted by she's not there at 4:53 PM on December 15, 2013 [2 favorites]

Yes, do it. Ask if they could increase your salary to cover the cost of the insurance, but do it do it do it. A pension, in this day and age, is nothing to sneeze at.
posted by showbiz_liz at 5:05 PM on December 15, 2013

Response by poster: I asked HR if there was something we could do and provided them with the cost of the generics. The HR person talked with the head of HR.

Yes, I did talk to my supervisor. She said she was in a similar situation when she started, but they helped her out. She thought they would do the same for me but they are unable to because I am not a manager. She was able to get me hired at the highest pay grade for my position to keep my salary the same as it is now even tho I haven't been there very long.

I'll check with Costco tomorrow. They weren't cheaper when I was on a medication a few years ago and had no insurance when I got laid off.

My current insurance costs nothing because my employer pays it all. I have no dependents or spouse. I realize it is unusual, but it is really great insurance.

This is the first time in my life I'm making enough money to actually pay all of my bills so I'm still just wary of adding this extra expense even tho I can see in YNAB I can afford it. With the student loan payment coming due for the first time (i've been in forbearance and/or economic hardship since i graduated because i had such low paying jobs) at the same time as suddenly having to pay another $240/month AND having about $300/month less take home pay due to the pension and health insurance deductions, it's just kinda freaking me out. I'm going to be having at least $550 LESS a month at least for the next six months, and then about $300/month less. But I guess the long term thing, since I'm not living paycheck to paycheck anymore, is that I'll have retirement money later. It's just hard to wrap my head around that because I've never had enough money.

This is a major decision and I just want to make sure I'm doing the right thing.

It seems like I should do it.

Thanks everyone for helping me think about this.
posted by McSockerson The Great at 5:10 PM on December 15, 2013

So, you should take this job and use your flex spending account to pay for your meds. That would spread the six-month med cost out over the whole year, plus the money is pre-tax, so you would save ~30%. FSAs are a little weird in how they are set up (but they're weird in your favor). Your yearly contribution is available to you to spend as soon as the account is open. For example, if you elect to set aside $10 per week, your entire $520 yearly contribution is available. You would need to contribute about $200 each month to cover your six-month Rx gap and the two p-doc visits.

I paid for a surprise root canal this way and it was soooo painless.
posted by Snarl Furillo at 5:40 PM on December 15, 2013 [2 favorites]

"For the first six months, the health insurance is basic only - no Rx coverage, no mental health coverage (I don't see a therapist, just my pdoc, who I will have to see at least once, if not twice during that six month period, and his rate is $85 with no insurance."

I know there have been many changes with rolling out Obamacare, but this doesn't sound legal if you are in the US?
posted by Violet Hour at 6:12 PM on December 15, 2013 [1 favorite]

(I would still take the job though.)
posted by Violet Hour at 6:14 PM on December 15, 2013

Response by poster: FSA - i'll have to see if that starts right away or if i have to wait 6 months for that too. but i do have an FSA now and i do plan on getting one as soon as i can with the new employer. T

Because my plan existed prior to 2010, it is grandfathered in or something. plans that were in existence prior to that date do not have to have the essential benefits thing you are referring to, which would mandate Rx coverage.
posted by McSockerson The Great at 6:18 PM on December 15, 2013

Why not just buy your own insurance via the ACA? I don't see how their plan even qualifies under the new rules. You have to have insurance that meets a minimum standard. If you don't then you may qualify to purchase through the state's Exchange. It may be cheaper than buying your meds and paying your therapist. Then after 6 months convert to your employer's plan.
posted by Gungho at 8:16 AM on December 16, 2013

Gungho, in many companies you can only change your insurance once a year at open enrollment time, OR if you get married/divorced or have/adopt a child. So the OP would have to keep ACA coverage through 1/1/2015 (more than 6 months) before converting to their employer's plan.
posted by tckma at 11:25 AM on December 16, 2013

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