Possible way to get insurance if you are "uninsurable"?

[Surfdaddy]

So this thought occurred to me. If you want to RE but are well short of Medicare age, and for some reason are "uninsurable" (which we know may NOT mean that you have any serious health problems, but might be a financial risk to the insurance company), perhaps this idea works:

1. Quit working, go on COBRA for up to 18 months.
2. After one year, begin looking for work. Find a job, preferrably at 17 months after leaving the previous one.
3. Work for one year. Leave the second job and go on COBRA for up to 18 more months.
4. Repeat.

Now this may not look like retirement per se. But it is less than half time, averaged over the entire period. You get to work 40% time or so and maintain health insurance coverage.

I do see some risks. Depending upon your job field, you could get questions on why you've changed jobs so much (that's why I said work one year, otherwise you could work a month and then do COBRA again). You can always explain you left your job for family reasons and they can't legally ask you any more details.

The other big risk I see is that you can't get another job so end up without COBRA coverage. That would be a risk you'd have to take with this scenario.

Anybody see other reasons why this would not work?

 

[Caroline]

I do see some risks. Depending upon your job field, you could get questions on why you've changed jobs so much

Not a problem in the software industry -- it's a revolving door around here. I'm guessing more and more industries are getting this way, too.

I'd be more worried about age discrimination... at 50 yrs old it might not be that easy for me to get any kind of job with full bennies. I could be wrong, though. I'd love to hear about folks looking for and GETTING jobs with benefits after 50.

Otherwise, I LIKE it. I'd love to take every other year off!

 

[perinova]

First I have to say "How can one be uninsurable and employablle at the same time?"... Somebody do something (about the insurance situations).

- Can you get COBRA if you live on your own?
- As you said not really retirement... you are working 1/2 time not much different from having a part time job.
- How many times can you do this? It might be difficulkt to get a job after not working for 18 months. Usually you have to show that you did something but maybe this doesn't apply to all kinds of jobs?

 

[Martha]

Don't forget that COBRA benefits are often stinking expensive. Our COBRA costs are $1086 a month for a family plan.

 

[Surfdaddy]

Well COBRA may be stinking expensive, but if you are "uninsurable" then that may still be much better than not having insurance. This scenario assumes that you can already afford the COBRA coverage.

Yes, this is the same as part time (essentially). But how many part time jobs are there that provide health insurance? Most professional jobs are not going to be available part time with insurance. Yet a full time job for a year is available and also has the insurance. You're basically working to get your next 18 months of COBRA eligibility.

 

[FIRE'd@51]

I would suggest looking for employers who offer a high-deductible policy (perhaps even an HSA) as part of their plan choices. This will minimize the insurance premiums while you are on COBRA. When I FIRE'd I was able to switch my company plan from a low-deductible to high-deductible, which saved me a whole bunch of money in premiums over the 18 months I was on COBRA.

 

[Martha]

Another possibility is Justin's old idea--be a student and get student health insurance. Some universities have pretty good benefits, some do not.

 

[Zoocat]

I'd be more worried about age discrimination... at 50 yrs old it might not be that easy for me to get any kind of job with full bennies. I could be wrong, though. I'd love to hear about folks looking for and GETTING jobs with benefits after 50.

Caroline, you would be very right to worry about age discrimination. My own experience and that of other women my age has been that it's hard to even get an interview for a job with benefits much less get hired when companies could hire a 30-40 yr old instead.

Another possibility is Justin's old idea--be a student and get student health insurance. Some universities have pretty good benefits, some do not.

I gave this idea more than a little thought when I was in the process of applying for health insurance. At my local university you only have to be enrolled for one course to be eligible for student health insurance. The benefits are not that great but better than the state high risk pool.

 

[justin]

Another possibility is Justin's old idea--be a student and get student health insurance. Some universities have pretty good benefits, some do not.

For me in North Carolina, this is the best option I've seen if I can't get reasonably priced private health insurance or any of us become "uninsurable". I'm looking at providing insurance for a family of 4+ for around a decade before the kids go off to college.

Unless the deal has changed, I can sign up for one class per year (probably around $500-600 now). Get the guaranteed issue student health insurance plan at around $3500-4000 for a whole family for a full year. Total cost should come in under $5000. Plus, I wouldn't mind taking a class or two here and there, especially if the price of tuition is already included in my health insurance costs. They even have a wide selection of classes taught completely online.

 

[donheff]

Unless the deal has changed, I can sign up for one class per year (probably around $500-600 now). Get the guaranteed issue student health insurance plan

Aren't there limitations? Like you need to be enrolled in a degree program or something? Need to complete the course? This seems like too obvious a route for your standard retired with no benefits types.

 

[SecondCor521]

Aren't there limitations? Like you need to be enrolled in a degree program or something? Need to complete the course? This seems like too obvious a route for your standard retired with no benefits types.

At my university you have to be a "full time student" and they do it on a semester basis; i.e., to get health coverage for a year you'd need to be enrolled full time in the fall and the spring. Total cost would be about $3,700 for tuition. If you actually wanted to pass the class, you may want to buy the books too, which is another $500 or so depending on the classes. But if you're going full time year round, that's actually equivalent to about a 30 hour a week job between classwork and homework...that's for an MBA. If you were going for a second bachelor's degree or something it'd probably be easier.

But this is exactly what I did last year as I was getting the degree anyway and was unemployed during part of the time.

2Cor521

 

[Peaceful_Warrior]

I think Starbucks gives benefits even to part-time employees. Maybe ride that for a bit?

I've also heard (but not investigated) that there are government jobs where you can work for as little as 5-years part-time to get health benefits (you just have to pay a pro-rated portion of the premiums). If that is true, it may be an easy out.

 

[justin]

Aren't there limitations? Like you need to be enrolled in a degree program or something? Need to complete the course? This seems like too obvious a route for your standard retired with no benefits types.

At my two local State universities (North Carolina State University and University of North Carolina - Chapel Hill), the only requirement was you must be enrolled in a class for credit. You can be an undergrad or grad student or a "lifelong education" continuing education student. Part time or full time. I even called around to the university and insurance company to verify this. My understanding is that you sign up in the fall for 1 full year of insurance that lasts until the following fall. Partial years might be prorated? I got this insurance for a year or two during law school - ~$1000/yr for me alone.

So I figure one could sign up in the fall, take a class, then drop out until the following fall.

This could change for my two schools, and it obviously varies by college. They probably don't have a lot of students doing this and figure the small number that do take advantage of this would be offset by the huge number of otherwise healthy 20-somethings taking advantage of the insurance. I also recall that I had to use the on campus health care clinic for free, or pay a $200 deductible or something if I go somewhere else.

 

[haha]

Anybody see other reasons why this would not work?

Would anyone need any more reasons? I think after trying to get that next job in a soft market while the clock ticks down on your Cobra and having you wife mention that her period is late and your 2 year old seems to be developing asthma even the laziest person might hang on for dear life to the next job offered.

Ha

 

[cute fuzzy bunny]

A lot of companies are also not giving health benefits to new employees until they've completed 90 to 180 days of service and passed a probationary period.

 

[astroboy]

So this thought occurred to me. If you want to RE but are well short of Medicare age, and for some reason are "uninsurable" (which we know may NOT mean that you have any serious health problems, but might be a financial risk to the insurance company), perhaps this idea works:

1. Quit working, go on COBRA for up to 18 months.
2. After one year, begin looking for work. Find a job, preferrably at 17 months after leaving the previous one.
3. Work for one year. Leave the second job and go on COBRA for up to 18 more months.
4. Repeat.

We've thought of this very idea. In CA here, state law requires another 18 mos. of COBRA (at 10% more) after use of first 18 mos. of federally mandated COBRA (at 2% more), so you could milk it for 3 years if needed. Yes, expensive, but agree for many at least it's guaranteed if have health problems.

When asked my employer (municipality), found out they allow retirees, after using up our retiree health benefits, to continue in group coverage for as long as want and without paying 2% for COBRA admin. costs. It's good coverage and guaranteed so decided to delay ER for one year to afford the high cost. Not crazy about that part but it's worth it for the piece of mind the guaranteed part of it gives.

 

[mykidslovedogs]

A lot of companies are also not giving health benefits to new employees until they've completed 90 to 180 days of service and passed a probationary period.

I had an employee who "used" me for health benefits. Being naive, I paid in advance for 3 months worth of family premiums with the presumption that there would be a payroll deduction for the dependent costs. After one month, she quit, and I was stuck with the full insurance cost for the next two months. After quitting, she tried to sue me for unemployment. It doesn't feel so good when the shoe is on the other foot. Now I see why employers take advantage of the waiting period.

Also, Cobra admin is expensive and a pain in the neck. We spend about $3000/yr ($200 per group) to give "free" Cobra administration to our groups with more than 20 employees. And that's just for the software. I'm not counting all of the administrative work it requires.... We don't pass the 2% fee onto the person who elects Cobra, even though we have the right to.

 

[Rich_by_the_Bay]

Also, Cobra admin is expensive and a pain in the neck. We spend about $3000/yr ($200 per group) to give "free" Cobra administration to our groups with more than 20 employees. And that's just for the software. I'm not counting all of the administrative work it requires.... We don't pass the 2% fee onto the person who elects Cobra, even though we have the right to.

That's great customer service; I never heard of anyone in this area eating that 2% -- always passed along as premium. Nice touch.