Estimating COBRA Medical Insurance Costs (USA)

[gk10002000]

Any people experienced with COBRA in the USA.  No, not the snake!  I used COBRA once decades ago when I was between jobs as a contractor.  Today's question is about how to estimate COBRA medical insurance costs.  I am looking to punch out of work soon but before I reach  65 and medicare age.  So I am looking at my health insurance options.  Obamacare can be crazy expensive unless I finagle things to make my income low once I retire.  I could have enough passive income to drive me above the levels required to qualify for Obamacare subsidies which will then make medical expensive.  I have ways I could get around that but for now lets' say it would be challenging.  I am also considering simply living abroad and getting more affordable medical insurance in Thailand. I am also looking at COBRA and continuing my existing coverage that way. I believe I can get COBRA for 18 months after leaving the company.  Yes it probably wouldn't be great if living overseas but that is just a minor detail. 

 

I work for Northrop, big aerospace company. My line 12 say this:: D is the Pre Tax 401k contributions.  Irrelevant.  AA is the ROTH post tax contributions. Again irrelevant.

 

Line 12 a: D 15,772

Line 12 b: AA 8727

Line 12 c: DD 3262

OK so DD is the company cost. Now does that include the medical and dental costs?   Would my COBRA cost be that 3262 + the premium I was paying which was about 100/month or lets say 1200/year. plus some 2% or so charge that COBRA tacks on?

 

So would my COBRA estimate be:   3262 + 1200 + say 2%? or do I just pay the 3262 + 2 %?

[GinBoy2]

Your COBRA payment is simply the full cost of the policy Northrop pays for you, so it's impossible to tell, it all depends on what policy you took at enrolment, and what Northrop negotiated with the providers

 

The plans are so varied I don't think there is anyway for anyone to estimate, without you going to HR and asking.

 

Sorry to be so vague, but that's the nature of our healthcare system.

 

[gk10002000]

4 hours ago, GinBoy2 said:

Your COBRA payment is simply the full cost of the policy Northrop pays for you, so it's impossible to tell, it all depends on what policy you took at enrolment, and what Northrop negotiated with the providers

 

The plans are so varied I don't think there is anyway for anyone to estimate, without you going to HR and asking.

 

Sorry to be so vague, but that's the nature of our healthcare system.

 

 The costs are supposedly indicated by the line 12 on the W-2 that indicates, the cost Northrop pays.  I didn't mention W-2 explicitly in my first post but that's where those line 12 items came from.

[GinBoy2]

10 hours ago, gk10002000 said:

 The costs are supposedly indicated by the line 12 on the W-2 that indicates, the cost Northrop pays.  I didn't mention W-2 explicitly in my first post but that's where those line 12 items came from.

Now I haven't had a W2 for a few years now, and I just looked at an old one from 2010, and box 12 was different.

 

So if box 12 is stating what Northrop have contributed, add your contributions, divide by 12, and I guess that would be the COBRA monthly payment...prepare yourself for sticker shock!

 

If I were you, I'd work on reducing income, thereby maximizing the premium tax credits to pay for an ACA plan through the exchange.

 

Remember you can have $1M in the bank, but no reportable 1040 income, and those tax credits will handily pay the premium...I know through experience when we first moved back to the United States

[gk10002000]

16 minutes ago, GinBoy2 said:

Now I haven't had a W2 for a few years now, and I just looked at an old one from 2010, and box 12 was different.

 

So if box 12 is stating what Northrop have contributed, add your contributions, divide by 12, and I guess that would be the COBRA monthly payment...prepare yourself for sticker shock!

 

If I were you, I'd work on reducing income, thereby maximizing the premium tax credits to pay for an ACA plan through the exchange.

 

Remember you can have $1M in the bank, but no reportable 1040 income, and those tax credits will handily pay the premium...I know through experience when we first moved back to the United States

Oh yeah, I am well aware of the ACA.  As a contractor I had great and cheap catastrophic insurance with Florida Blue Cross.  Life was great. Then the ACA drove that up to 560/month even though I was not in the ACA plans.  But congress seemed to think they know what type of insurance plan I must have.  Disgusting.  Anyway, that's why I took the job with Northrop which pays about the same as my contractor pay was plus I get some decent benefits and paid vacation and it was a decent way to at least get to  aged 62 and keep the retirement options open.  Now I am 62 and plan to work through this year.  Then retirement option is on the table.  The ACA would cost me $850/month for a single person, worst plan, highest deductible, without subsidies!   I have no desire to use the ACA, but I am aware of the income limits and subsidies, and for a year or two, there are ways I could keep my income low.   I am well doshed up and I do have my investments returning over $60k a year.  Some in my ROTH, some in my Traditional IRA, some in my Brokerage (all in this account are federally tax free muni bonds and funds which unfortunately count towards the MAGI which the ACA uses).   So my passive income is a good, but problematic in its own way!  Social security is on the horizon.  I'm not worried about income or having enough for retirement, I am just scoping out options and plans for keeping decent medical insurance for the two years until I hit 65 and medicare eligibility.  Frankly, the system is dis-incentivizing me to work!  I can show less income, and get a lot of stuff for free.  If the system induces me to do that, well, so be it

[claynlr]

I sent an e-mail to my company's HR Dept. and they told me what the amount would be when I retire if I used it.

[NCC1701A]

On 5/13/2019 at 7:22 AM, gk10002000 said:

I used COBRA once decades ago

me too. i forgot and missed one payment and they dumped me. no recourse.