I took a W2 job for 8 weeks, what are the implications on my benefits?
November 11, 2020 2:49 PM Subscribe
I have no health insurance. Usually I do corp-to-corp freelance and pay for my own health benefits. This company had an unusual arrangement and wanted me as a full employee for the 8-week duration. I have to decide quickly on the health benefits. As of right now this is not an 8-week with extension. Can I go to ACA and get health insurance? Or should I go through the company for a month or two? Furthermore, will anything be impacted by the 8-week job duration? As in should I ask if I'm "laid off"?
North Carolina is where the job is located, I'm in Kansas and don't go to the office. Usually I take short-term corp-to-corp jobs. For reasons beyond this question I let my health insurance lapse that I normally pay for. I took this job, which is an odd arrangement, and didn't think of the ramifications of taking a full W2 salaried job for only 8 weeks.
- Any considerations about health insurance? Since this is only 8 weeks I'd prefer to just go through the ACA marketplace and see what my options are. I'm afraid that since I have a job that is offering me benefits I might have some issues.
I guess I don't care which costs more if it is within a couple hundred dollars of this short duration, I just don't want to screw myself up for the rest of the year. Since I normally do corp-to-corp this is basically usually me just giving myself health insurance. I let it lapse and didn't think through the fact the company is offering me benefits and things because I was just doing a small job for them. It is a 2000+ person company so I'm sure their HR knows but I've always taken the stance HR is doing what is best for the company and not necessarily me.
Also when the 8 weeks is up should I ask for something that says I was not let go for cause? The more I think about this the more it feels like they were trying to skirt a rule or law. It could be that I'm sub-contracting through another company and that company required my employer to have a "full time employee" ... but I don't know for sure. It doesn't matter to me.
There's a non-zero chance I could be extended after 8 weeks, or more realistically they call me after a month and need me for another three months. I have other contracts lined up after this so hopefully money isn't an issue but those are all corp-to-corp.
I have a tax attorney but don't even know who to hire for this rather complex benefits question. I figure that someone knows what my options are and maybe why the company pulled this? I have no qualms with the and the work is exactly as they described. They sold an 8 week project and needed someone to come in and execute it.
North Carolina is where the job is located, I'm in Kansas and don't go to the office. Usually I take short-term corp-to-corp jobs. For reasons beyond this question I let my health insurance lapse that I normally pay for. I took this job, which is an odd arrangement, and didn't think of the ramifications of taking a full W2 salaried job for only 8 weeks.
- Any considerations about health insurance? Since this is only 8 weeks I'd prefer to just go through the ACA marketplace and see what my options are. I'm afraid that since I have a job that is offering me benefits I might have some issues.
I guess I don't care which costs more if it is within a couple hundred dollars of this short duration, I just don't want to screw myself up for the rest of the year. Since I normally do corp-to-corp this is basically usually me just giving myself health insurance. I let it lapse and didn't think through the fact the company is offering me benefits and things because I was just doing a small job for them. It is a 2000+ person company so I'm sure their HR knows but I've always taken the stance HR is doing what is best for the company and not necessarily me.
Also when the 8 weeks is up should I ask for something that says I was not let go for cause? The more I think about this the more it feels like they were trying to skirt a rule or law. It could be that I'm sub-contracting through another company and that company required my employer to have a "full time employee" ... but I don't know for sure. It doesn't matter to me.
There's a non-zero chance I could be extended after 8 weeks, or more realistically they call me after a month and need me for another three months. I have other contracts lined up after this so hopefully money isn't an issue but those are all corp-to-corp.
I have a tax attorney but don't even know who to hire for this rather complex benefits question. I figure that someone knows what my options are and maybe why the company pulled this? I have no qualms with the and the work is exactly as they described. They sold an 8 week project and needed someone to come in and execute it.
When the job ends you should be able to apply for ACA insurance (even if it's not open enrollment any longer) because losing health insurance you had through a job is generally a "qualifying life event."
Generally if you have the option of health insurance through a job and the premium is not more than a certain % of your income, you won't be able to get the subsidies toward the ACA plan. The income limit for getting subsidies is kind of low, though - a few years ago I remember a (single childless) friend who earned maybe in the 40k/yr range not qualifying for much or anything in the way of subsidies.
posted by needs more cowbell at 3:08 PM on November 11, 2020
Generally if you have the option of health insurance through a job and the premium is not more than a certain % of your income, you won't be able to get the subsidies toward the ACA plan. The income limit for getting subsidies is kind of low, though - a few years ago I remember a (single childless) friend who earned maybe in the 40k/yr range not qualifying for much or anything in the way of subsidies.
posted by needs more cowbell at 3:08 PM on November 11, 2020
Also, while we are currently in the open enrollment phase (Nov 1 through Dec 15) for ACA plans, those plans won't start until Jan 1st. I'm not sure you'd be able to get an ACA plan to cover you for the rest of 2020 unless something that has happened in your life recently is a qualifying life event.
posted by needs more cowbell at 3:16 PM on November 11, 2020
posted by needs more cowbell at 3:16 PM on November 11, 2020
Is there any reason you don't want to take the company benefits for the 8 weeks? I can see how it might feel weird but if I were in your situation, I'd consider it the safest option with the most advantages. Because: It will give you coverage now, which you currently lack, and you'll be eligible to enroll in the ACA Marketplace once you leave the job and that coverage ends, whether that's at the end of the current 8-week period or at the end of however long that period gets extended. As another commenter above said, losing company-sponsored health insurance is a qualifying event that allows you to enroll in the Marketplace no matter what time of year it is--it doesn't matter whether your employment ended voluntarily or involuntarily, "with cause" or without.
In short: Taking the company option does not interfere with your ability to get health insurance later, and in fact makes it easier to get health insurance again once your employment with that company ends.
You're correct that being offered company-sponsored health insurance as a real W2 employee does interfere your ACA options right now. You may still be able to enroll, but you're no longer eligible for most subsidies or premium tax credits. This is because you have the option to get company-sponsored coverage, with the tax advantages that entails (pre-tax paycheck deductions for whatever you have to contribute, and you're not taxed on the portion the company contributes), so the government isn't inclined to give you a break on their own dime.
Also important to consider: If you haven't otherwise had a qualifying event recently, you may not even be able to enroll in plans through the Marketplace that start before 1/1/21, because the open enrollment that's happening now is for plans that start then.
Just to cover all possible options, if you don't enroll in the company's plan OR the Marketplace right now, and you choose to remain without health insurance even longer, you'd be putting yourself in a bigger jam: Losing your job isn't what allows you to enroll in the Marketplace any time of year, it's losing the health insurance provided by you job.
As for why the company's doing this? It honestly could be them wanting to make sure they can provide health insurance. I work in the industry and hear of companies doing all sorts of sketchy-sounding things that are actually intended to help their employees out, and hiring you as an employee could be one of them. Or maybe it's a requirement of a COVID-related loan that they have a certain number of W2 employees on payroll, or something similar. Or maybe it's something else entirely. If the work matches the job description, they're paying you what they offered and withholding the appropriate employee payroll taxes, and filing all the right forms (you had to complete an I9 and W4 when you joined, hopefully, even if it was electronic), you probably don't need to worry too much about the why.
This is complicated stuff! You're in a good place in terms of options, though, so please don't let the complexity keep you from making the decisions that will get you covered.
posted by rhiannonstone at 7:27 PM on November 11, 2020 [1 favorite]
In short: Taking the company option does not interfere with your ability to get health insurance later, and in fact makes it easier to get health insurance again once your employment with that company ends.
You're correct that being offered company-sponsored health insurance as a real W2 employee does interfere your ACA options right now. You may still be able to enroll, but you're no longer eligible for most subsidies or premium tax credits. This is because you have the option to get company-sponsored coverage, with the tax advantages that entails (pre-tax paycheck deductions for whatever you have to contribute, and you're not taxed on the portion the company contributes), so the government isn't inclined to give you a break on their own dime.
Also important to consider: If you haven't otherwise had a qualifying event recently, you may not even be able to enroll in plans through the Marketplace that start before 1/1/21, because the open enrollment that's happening now is for plans that start then.
Just to cover all possible options, if you don't enroll in the company's plan OR the Marketplace right now, and you choose to remain without health insurance even longer, you'd be putting yourself in a bigger jam: Losing your job isn't what allows you to enroll in the Marketplace any time of year, it's losing the health insurance provided by you job.
As for why the company's doing this? It honestly could be them wanting to make sure they can provide health insurance. I work in the industry and hear of companies doing all sorts of sketchy-sounding things that are actually intended to help their employees out, and hiring you as an employee could be one of them. Or maybe it's a requirement of a COVID-related loan that they have a certain number of W2 employees on payroll, or something similar. Or maybe it's something else entirely. If the work matches the job description, they're paying you what they offered and withholding the appropriate employee payroll taxes, and filing all the right forms (you had to complete an I9 and W4 when you joined, hopefully, even if it was electronic), you probably don't need to worry too much about the why.
This is complicated stuff! You're in a good place in terms of options, though, so please don't let the complexity keep you from making the decisions that will get you covered.
posted by rhiannonstone at 7:27 PM on November 11, 2020 [1 favorite]
I am on COBRA right now and it is cheaper for equivalent coverage than the ACA open market, ymmv greatly depending on state, but do not discount the potential to extend this 8 week health insurance plan through COBRA rather than go for the ACA open plan. I save about $75/mo doing this. Find out how much the employer share of the premium is for the plan they are offering to know if ACA is cheaper or not without having to wait for COBRA enrollment, that gets you close.
posted by slow graffiti at 8:07 PM on November 11, 2020
posted by slow graffiti at 8:07 PM on November 11, 2020
Ah, I didn't mention COBRA because I assumed that "usually I take short-term corp-to-corp freelance jobs" meant that there wasn't any previous company-sponsored insurance to continue--which is what COBRA (or the state equivalent, for smaller companies) is, a continuation of company health insurance after you leave the company.
If I misunderstood entirely and there is an option for COBRA or the state version, it's usually much more expensive than ACA for most people, but worth checking just in case.
The caveat there: If you enroll in COBRA, and then you want to get a Marketplace plan, you have to let the COBRA run out the full number of months you're allowed to have it in order to be eligible to enroll in the Marketplace. If you cancel COBRA before that, the Marketplace does not consider that a qualifying event. If you get offered company-sponsored insurance, though, you can cancel COBRA whenever and enroll in the company insurance, no problem.
To be clear, COBRA is only an option if you had company-sponsored health insurance that ended within the past 60 days (might be a different window of time if that company was subject to state laws rather than federal for COBRA).
posted by rhiannonstone at 8:29 PM on November 11, 2020
If I misunderstood entirely and there is an option for COBRA or the state version, it's usually much more expensive than ACA for most people, but worth checking just in case.
The caveat there: If you enroll in COBRA, and then you want to get a Marketplace plan, you have to let the COBRA run out the full number of months you're allowed to have it in order to be eligible to enroll in the Marketplace. If you cancel COBRA before that, the Marketplace does not consider that a qualifying event. If you get offered company-sponsored insurance, though, you can cancel COBRA whenever and enroll in the company insurance, no problem.
To be clear, COBRA is only an option if you had company-sponsored health insurance that ended within the past 60 days (might be a different window of time if that company was subject to state laws rather than federal for COBRA).
posted by rhiannonstone at 8:29 PM on November 11, 2020
As others pointed out, you have options of changing from employer to COBRA to ACA plans according to eligibility rules. But keep in mind that each time you change insurance providers that you reset your annual deductible to zero. This may or may not be important depending on whether you have recurring medical expenses. With COBRA, you continue with the same provider as your employer so maintain your current deductible tally.
posted by JackFlash at 8:42 PM on November 11, 2020
posted by JackFlash at 8:42 PM on November 11, 2020
If you do go with the company, make sure you know when the coverage actually starts. Some plans start at the beginning of the second month and then run to the end of the month after termination. YMMV Just don't go incurring costs until you know if you are covered.
posted by metahawk at 9:04 PM on November 11, 2020
posted by metahawk at 9:04 PM on November 11, 2020
My understanding is that COBRA is federal and lasts for 18 months. You should compare costs with the ACA and confirm the health benefits kick in for you in time at your job. But if they do, you could:
Get health coverage at the employee rate while you're employed with them.
Get health coverage for 18 months at a presumably better rate than the ACA.
Enroll in the ACA in 2022 during open enrollment or when COBRA runs out.
Although: cobra can be quite expensive because the plans are often more comprehensive. And you have to pay the employer's portion.
COBRA is also retroactive for a few months after you leave your job. So I can't see a reason not to take the health benefits available to you now and then leave yourself room to decide. Particularly since the pandemic is ragin' and you should have health insurance right now!
Also: I think the ACA is going to withstand the current supreme court challenge? But nobody knows for sure.
posted by pazazygeek at 8:14 AM on November 12, 2020
Get health coverage at the employee rate while you're employed with them.
Get health coverage for 18 months at a presumably better rate than the ACA.
Enroll in the ACA in 2022 during open enrollment or when COBRA runs out.
Although: cobra can be quite expensive because the plans are often more comprehensive. And you have to pay the employer's portion.
COBRA is also retroactive for a few months after you leave your job. So I can't see a reason not to take the health benefits available to you now and then leave yourself room to decide. Particularly since the pandemic is ragin' and you should have health insurance right now!
Also: I think the ACA is going to withstand the current supreme court challenge? But nobody knows for sure.
posted by pazazygeek at 8:14 AM on November 12, 2020
This thread is closed to new comments.
My contact with my employer has been minimal to non-existent. No computer, no on-boarding. They threw me right in front of the client. Again, this is fine I just am treated as if I was a real contractor so I don't have a boss or anyone to even report to. I already called payroll to make sure I'm being paid, obviously, but beyond that I'm not used to dealing with corporate benefits packages what elections mean and how this can impact me in the future.
posted by geoff. at 2:51 PM on November 11, 2020