Author Topic: Health insurance options for dependents besides my employer coverage?  (Read 916 times)

legalstache

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We recently had our second child, and I'm now paying about $8,500 a year for health insurance for my wife and two kids through my employer. We live in Washington State.

I went on the state ACA website to look for plans- the kids don't qualify for the reduced health insurance premium coverage through CHIP/Medicaid because the income cutoff is $86,580 before taxes and our income is $106,000 before taxes.

Are there any other options out there I might be missing to get my kids on a different health insurance plan or otherwise reduce our costs?  I don't believe the "family glitch" fix will help me because our health insurance costs are less than 9.78% of income. That said, I'm definitely not up on all the rules in this area so could be misinterpreting that or overlooking another option out there.

This is typically our biggest expense on a monthly basis after our mortgage and groceries so any help would be appreciated!

Sibley

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Re: Health insurance options for dependents besides my employer coverage?
« Reply #1 on: April 12, 2022, 09:39:26 PM »
Possibly not applicable or very obvious, but if your wife works and has insurance available to her, would that be a better option?

legalstache

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Re: Health insurance options for dependents besides my employer coverage?
« Reply #2 on: April 13, 2022, 07:02:31 AM »
Possibly not applicable or very obvious, but if your wife works and has insurance available to her, would that be a better option?

Wife currently stays home with the two kiddos. Ideally, at some point in the future she may be at a job with health insurance but that’s at least a few years down the road.

terran

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Re: Health insurance options for dependents besides my employer coverage?
« Reply #3 on: April 13, 2022, 09:08:42 AM »
As you've pointed out, your insurance is affordable by ACA standards, so even without the family glitch you wouldn't qualify for subsidies and if you did qualify for subsidies they wouldn't save you any money as your insurance would be slightly more expensive under the ACA. If the family glitch does go away, then you might be able to save on health insurance if you can get your income down to the point where your employer provided insurance is considered unaffordable and also save on ACA insurance for the same reason. Are you maxing out tax advantaged accounts?

Other than that, does your employer offer any other insurance plans? HSA eligible high deductible plans are often the right choice and tend to have lower premiums than other plan types.

legalstache

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Re: Health insurance options for dependents besides my employer coverage?
« Reply #4 on: April 13, 2022, 10:05:15 AM »
Thanks for the input @terran I have a HDHP with an HSA. I believe that's the lowest premium plan my employer offers (although I haven't checked since I started working at this job). We max out the HSA every year and contribute to my 401(k) up to the match.

If the family glitch does go away, is the threshold for unaffordability for family insurance 9.78%? If so, I think my HSA contributions plus an increase in 401(k) contributions could bring my income after deductions down to $85,000 or so to get us under that unaffordability threshold. What kind of premium savings would we be looking at under the ACA in that case?

terran

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Re: Health insurance options for dependents besides my employer coverage?
« Reply #5 on: April 13, 2022, 10:47:05 AM »
Thanks for the input @terran I have a HDHP with an HSA. I believe that's the lowest premium plan my employer offers (although I haven't checked since I started working at this job). We max out the HSA every year and contribute to my 401(k) up to the match.

If the family glitch does go away, is the threshold for unaffordability for family insurance 9.78%? If so, I think my HSA contributions plus an increase in 401(k) contributions could bring my income after deductions down to $85,000 or so to get us under that unaffordability threshold. What kind of premium savings would we be looking at under the ACA in that case?

Yeah, I think affordability follows the same percentages as the subsidies, although you'll need to confirm that and also wait and see how/if the family  glitch fix is implemented. For example, if you keep individual coverage, how will that interact with the cost and subsidies for coverage for your wife and kids? Affordability depends on your income in relation to the Federal Poverty Level.

Ignoring any differences to how the family glitch fix might be implemented and assuming the higher affordability percentages come back in 2023 then for a family of 4 the cost would be capped at 9.78% of ACA countable income for income between $83,250 and $111,000. Depending on how much space you have remaining in your 401(k) and HSA and if you want to make traditional IRA contributions you might be able to get your income as low at 250% FPL which would cap affordability at 8.29%. I think that also gets you into cost sharing subsidy territory too.

You also might be able to get the cost down by signing up for a bronze plan since the subsidy will then pay more of the plan cost. I think that's usually not advised when you can get cost sharing subsidies since they only apply to silver plans (although, that might be a stretch, especially given my next comment about HSA eligibility, which is only available with bronze plans).

Remember that if you need a family HSA limit to get your income low enough to qualify that you'll also need to sign up for an HSA eligible ACA plan, which I think aren't always available and are usually more expensive than otherwise similar plans.

legalstache

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Re: Health insurance options for dependents besides my employer coverage?
« Reply #6 on: April 13, 2022, 02:12:10 PM »
Thanks @terran those are some good ideas for me to think about and work through.