Health Insurance while Traveling

[slocumml22]

I'm currently being submitted for my first travel contract and I'm still trying to figure out who to do about insurance. I know my company starts health insurance on the first day of my contract, but what about the month before that? And the week or month I take in between assignments?

Should I take private insurance and keep it while I work? Or should I get private then cancel- take the companies insurance and then restart private when I take a break between assignments. Seems like a big hassle...

Also, someone mentioned that I might be able to write my health insurance cost off in my taxes? Is this true?? In that case I would just take private insurance- but I've never heard of that anywhere else. So what do my fellow travelers do for health insurance during your in-between times!?

[8-ball, BSN]

I don't know anything about writing your cost off in taxes but if you recently left another job that offered insurance you can get the COBRA cost of it for I think 18months after you leave a job. That would probably be your most cost effective method. Then yes some companies will do insurance but realize that the cost of which will come out of your pay somehow. Also if you take a break most companies will only cover you for 30 days after your assignment and don't start coverage until you are about 2 weeks into an assignment. Of course this only matters if they check during tax time.

[NedRN]

Try a search here about health insurance. The topic for travelers comes up often and has been much discussed. No, you cannot deduct health insurance currently, unless you meet the really high threshold of all your medical expenses being 7.5% of AGI, and then only the amount that exceeds that threshold.

Only businesses can treat health insurance directly as an expense. That is clearly unfair so it comes up in Congress quite a lot on both sides of the aisle but nothing has been passed yet. But since agencies are businesses, they can deduct health insurance premiums, even if it yours and not theirs (with receipts). Many agencies will only pay small amounts if you have your own insurance, like $100 a month. I'm not sure of the rationale, it may have to do with the agency's insurance underwriter - insurance companies hate self selection of insurance (and loss of premiums), even in these heady days of the ACA. So making the reward less for providing your own insurance will provide less incentive for fraudulent claims of having insurance and reward the agency's insurance company with more premiums.

Anyway, I've negotiated with agencies to reimburse my private premium. Comes out of your pay of course, but pre-tax versus post tax savings for far better results than deducting it post tax.

The COBRA legislation survives the ACA intact. So you can extend your current employer's insurance or an agency's insurance up to 18 months post employment. Be prepared for sticker shock, but realize that effectively you are already paying for the full premium (no free lunch from employers - which will become very clear as a traveler). Also recognize that some agencies are exempt from COBRA requirements if they have less than 20 FTEs. They can still choose to extend your insurance of course, and depending on the carriers policies, extend it over 18 months as well (perhaps to get you to do another assignment).

[Barkow]

In terms of a coverage gap before your contract starts (if you choose the travel company insurance), check with your current employer as to how long your health coverage remains after you leave. They might cover you until the end of the month, so if you leave your job on April 2 and start your assignment by May, there's no coverage gap.