First time freelancer and health insurance

January 2, 2024 2:00 PM

I'm a [reluctant] first time freelancer and I'm trying to figure out this whole health insurance mess. Help! Located in NY.

In Nov of last year I was laid off, and lost my employer sponsored health insurance.

Due to being on unemployment and having zero projected income for 2024 (at the time of application) I was eligible through NY State health exchange for a medicaid-managed HealthFirst plan which is limited coverage but with $0 premium for me. I opted for this over continuing my employer's plan through COBRA since the COBRA cost would have been $1200/mo and would not have been affordable for me. My HealthFirst policy officially began yesterday (Jan 1).

Today (Jan 2) I began a freelance, 3-month contract gig (on a W-2, not 1099, if that matters). It's my first time freelancing, which isn't my preference but I'll take what I can get for the moment. This gig does not come with any benefits but comes with a pretty good hourly rate which will make me ineligible for my current subsidized HealthFirst plan, and probably any other subsidies available (based on the NY Health Exchange calculators).

According to the plan's small print, I have 30 days to report my change in income to NY State. Since I don't get paid for this month's work until the end of January, I'd love to wait until that 30 days to report it and then see what my options are, to spare myself the cost of a new policy premium until after I get a paycheck.

But Open Enrollment ends Jan 15. If I push reporting my new income to end of the month, do I potentially screw myself by not being able to enroll in a policy if I get kicked off the medicaid-managed plan?

Luckily I don't have any health risks or conditions I'm overly concerned about or that require special coverage, but I'm pretty risk averse so I want to make sure I'm aware of all my options and make an informed decision.

Also open to any other tips and tricks from seasoned freelancers!

posted by greta simone to Work & Money (12 answers total)

Response by poster: And secondly, once this contract is done, can I expect to be able to go back to my $0 premium plan if I don't have other employment lined up after this contract? I expect to be pretty strapped and paycheck-to-paycheck for a little while until things level out and am really afraid I'm going to be stuck with a $1000 payment I can't afford if I'm unemployed.
posted by greta simone at 2:40 PM on January 2, 2024

I don't know if this helps, but there are Qualifying Life Events that allow you to apply for new health insurance outside of the Open Enrollment window.

I pay for my freelancer health insurance directly, but I first got started by going through the ACA exchange. The bottom of this article has some tips about ways to access healthcare

Buying an individual plan directly meant looking up what insurance my favorite doctors accepted, reviews, etc, then going on the plans' websites looking for the Shop for Plans function.

The NY Freelancer's Union has a health insurance thing (NOTE: I've never gotten health insurance this way, do not know how good or bad this option is, and it's technically not a union as freelancers aren't allowed to formally unionize).

And because this process is bonkers and ridiculous, I really love how Brian David Gilbert did a video on Healthcare terms
posted by Geameade at 2:41 PM on January 2, 2024

Response by poster: Hi Geameade, I appreciate the info, and I understand that 'Losing eligibility for Medicare, Medicaid, or CHIP' counts as a QLE, but I guess as of today starting a new job I lose that eligibility but have 30 days to report it, which puts me after the Jan 15 open enrollment period.

So I guess the question is, do I have to report it NOW to make sure it's reported as a QLE or can I wait until the 30 reporting period is almost over for it to still count as a QLE or will I miss my window of opportunity? I just really don't have the funds right now to switch to a paid plan (I've already researched my plan options through NY State ACA and Freelancers Union for when it's the right time).
posted by greta simone at 2:50 PM on January 2, 2024

Call the 800 number to healthcare dot gov. They were really helpful to me in sorting out my options (in Florida). They knew the income thresholds for my state and that there was no Medicaid expansion for us. They might be similarly knowledgeable for you.
posted by toodleydoodley at 2:50 PM on January 2, 2024 [3 favorites]

You could also look at it this way: what if you'd had a crystal ball when you applied for Medicaid and known you'd get this 3-month gig. Your projected income for 2024 would have been the sum total of the three months' pay. Would that have put you over the Medicaid income limit? If you can give a projected yearly income instead of sharing monthly or weekly income (which then gets looked at as if you are going to continue to have that income all year), you may be in a better situation, whether that's continuing Medicaid or getting a subsidized plan.
posted by needs more cowbell at 3:32 PM on January 2, 2024

Your premium cost is based on your projected modified adjusted gross income for the coming year, which gives you "advance premium tax credits" that are applied to your premium. You have the option to not take all of them in advance, and instead claim some portion at tax time. You can also, at any time, tell the NY Exchange that your income has changed from what you originally estimated, and they will calculate a new premium for you based on the income you report and what you received in premium tax credits. Note that if you receive more tax credit in advance than what it turns out You're entitled to at tax time, you may have to pay those back -- but there are limits to how much you have to repay if your income is less than 400% of the federal poverty level.

Tl:;Dr: you should apply now and provide your best guess of what your adjusted gross income at the end of the year will be. If your income changes alter, call the Exchanges and let them know.
posted by Theiform at 5:57 PM on January 2, 2024

I can't quite tell if you understand this, so apologies if you already do: a QLE is a separate process from the open enrollment window. During open enrollment, you don't need a QLE: the rest of the time, you do. QLEs can be claimed at any time; you don't have to stake it out early.

I guess as of today starting a new job I lose that eligibility but have 30 days to report it...

For Medicaid in my non-NY state, that'd be an incorrect guess. As of today you have no more actual money than you did yesterday. You anticipate getting more, but all telling my state government at least about what you anticipate does is complicate your life and potentially get you stuck with inaccurate eligibility determinations. This is very much in contrast to healthcare.gov, which of course does ask about anticipated income. So just be careful you're answering the questions each government entity is actually asking. I have gotten a lot of great guidance by calling my state agency and explaining various non-standard employment situations, because here it's totally different than for healthcare.gov and the correct way to report something like a short-duration gig is not necessarily what you or I would think.
posted by teremala at 7:05 PM on January 2, 2024 [1 favorite]

Response by poster: Yes, I understand that the QLE is separate from open enrollment. But I'm concerned if I wait until after open enrollment closes to report my new income, that I will be dinged as ineligible since that QLE happened before open enrollment ended, therefore causing a QLE after open enrollment to be moot, and causing me to be disqualified from any insurance.

Am I not making myself clear? I feel like none of the answers are actually addressing my question.
posted by greta simone at 6:40 AM on January 3, 2024

Ohh okay, I'm sorry, after I posted I wondered if that was the disconnect I hadn't been understanding. This all works in one-month increments and the QLE isn't "getting a gig," it's "losing coverage due to an income increase." You haven't lost coverage at this point: they already approved you for January and aren't going to rescind that just because your January income will probably end up being more than your original good-faith estimate (though not, as was pointed out above, as much as the hourly rate would suggest, because at this point your good-faith estimate for the year would still include $0 for the other nine months). Whether you end up with some kind of bill for January is a separate question, subject to however NY handles this sort of thing, but they don't generally jerk one back and forth between coverages just because of monthly income fluctuations. You may lose your current coverage for February–I also don't know how NY feels about predictable but short-term income–but then the QLE will be counted as whatever date they plan to cut you off, not the earliest possible date you might have seen it coming. I'd still delay reporting though because of the part where it's not actually your money yet, and technically you could get hit by a bus and be unable to perform the work, or the company could try to cheat you, etc. The system does understand, in its clumsy way, the tension between "technically I now have a job" and "I'd really like to not be stuck with a premium payment before my first paycheck shows up," and reporting money before you have it can confuse things.

(By all means, verify this with the actual agency, but hopefully this framework helps make sense of what they'll say. It's stuff I very much did not get at first myself.)
posted by teremala at 9:04 AM on January 3, 2024

Sidestepping your whole question: in NY once you qualify for Medicaid you can stay on it for the full year, even if your income changes in the interim (though I'm not sure if this is true if you're in the nearly-free-to-you-but-not-quite [$20/month?] level right above medicaid, which could also be through HealthFirst. For anything above that -- the regular subsidized plans based on percentage of income -- changes in income will change your monthly bill, and when filing taxes in the following year you might end up owing or getting a refund based on your actual full income for the year. But for Medicaid, if that's what you're definitely on, you can keep it for the full year no matter what happens).

You might as well call the help number to report your income change 30 days from now, but they may even end up telling you that whole requirement is moot for Medicaid clients. I'd probably call to report it anyway, unless finding solid instructions otherwise.
posted by nobody at 9:08 AM on January 3, 2024

I felt like I should probably provide a supporting link for what I wrote above -- that you won't be kicked off of Medicaid in NY for income changes until your yearly renewal/recertification date -- and it was harder to track down than I would have assumed.

It turns out the key phrase is "continuous eligibility" and New York might be the only state to offer it for adults (after Montana eliminated their version of the program some time in the past couple years), though 26 states do offer it for children.

This link should jump right to the "Continuous Eligibility Stabilizes Coverage" section of an article that spells out its meaning clearly. (And you can search for "New York" in this more recent article to confirm the program is still running here.)
posted by nobody at 10:59 AM on January 3, 2024 [2 favorites]

(I hedged with that "might be the only state" language because I didn't search thoroughly, but it looks like New Jersey, Illinois and Oregon might now offer continuous eligibility for adults, too -- or have at least applied for a waiver letting them do so soon -- just in case anyone stumbles upon this and makes assumptions about their own situations in one of those states.)
posted by nobody at 11:04 AM on January 30, 2024