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Paying for Health Insurance

November 18th, 2014 at 09:43 pm

A lot of you probably get your health insurance from your employer... my husband does. But his plan charges a bajillion dollars for spouses and dependents, and the insurance is just so-so.

F and I get our insurance through an individual plan (I am self-employed, and even though I have an S-Corp I would have to have an employee to qualify for business insurance).

Here's how it works: we personally pay for insurance (I put it on the credit card so that I get the 2% cash back). My business reimburses me, and the reimbursement shows up as income, but it isn't subject to withholding, social security or medicare taxes. On our personal 1040 form, this income is part of Line 7 (Wages, Salaries, Tips) but is deducted on Line 29 (self employed health insurance deduction) so that it's not included in our adjusted gross income.

During this enrollment period, I noticed that our premiums were going up 86%!!! So we've switched to a different insurance company. Our rates are still going up 42% (to $602 for the two of us), but now we're on a gold plan instead of silver and dental is included.

Our choices for payment were to set up an automatic draft from our checking account (no cash back!!!) or to receive a paper bill each month which I can pay with our credit card (cash back!!!). It's a little less convenient, but I want the cash back! We're talking $12 each month!

I'm wondering if maybe they'll set up an automatic credit card payment for me in January. But even if they don't, I have a system for paying my bills, so I'm not concerned.

How are you handling your health insurance? Would you give up some convenience for the cash-back option, too?

Posted in Life among the Self-Employed | 2 Comments »

2 Responses to “Paying for Health Insurance”

  1. Kiki Says:
    November 18th, 2014 at 10:55 pm 1416351323
    1416351323

    My health insurance is paid by my employer and my portion, about $162 a month (of a total of $718.2 a month) is deducted from my monthly paycheck.

    I did recently automate my cell and cable bills to a credit card that gives me back points for which I can select a cash back option when ever I want. I usually wait until it is $100 and put it into house down payment account. It happens about once a quarter. Every little bit helps and the auto pay on the cable and cell bills will add a little bit more each quarter.

    I will also put the renters insurance on this card in December, which I can pay off right away because I save a monthly allotment for my yearly insurances personally every month.

    And yes I would give up the convenience for a little cash back.

  2. starfishy Says:
    November 19th, 2014 at 03:09 am 1416366548
    1416366548

    i have crazy good insurance (includes medical, dental & vision) and pay a little less than $25 every 2 weeks (26 pay periods/year), employer pays the rest. $300 deductible, then 80% coverage until $1100 total out of pocket is reached then 100% coverage. plan includes massage, acupuncture, chiropractic - it's amazing. not sure how long it will last, but definitely thru the end of 2015. i am very grateful and take full advantage while i have it! i would probably go for the cash back, too, although in my case i often forget to pay non-auto bills, so in the end it probably would not pay off for me. sounds like you have a good system in place. what card gives you 2% cash back?

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