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There's Always a Loophole

2012-01-19 ignoramus

In 2010, my company instituted a new policy for health care benefits that required adult participants to take a health survey and a health screening. Additionally, “due to rising health care costs”, they removed the fully-paid options and gave a discount to healthy employees (presumably because they, in turn, got a discount from the insurance company). If you had a medical condition that precluded you from the discount, you had to get a doctor to sign an affidavit saying that you couldn’t possibly meet the requirements for the discount and you got the discount. We were told that this was going to become commonplace in the workforce nationwide and there was a decent amount of blame thrown at the Affordable Care Act of 2010 and the Obama administration.

My wife was pregnant at the time and, therefore, could not reasonably meet the cholesterol discount — your cholesterol skyrockets during pregnancy (in a good way). So, she got an affidavit and I passed the test. It wasn’t until I was blocked from enrolling my wife in my health care plan in November before I realized that I apparently hadn’t followed all of the rules.

Discrimination laws are an interesting thing, it turns out. “Discrimination is bad,” you might think. And I’d generally agree. But it means it is also legally very dangerous to bend the rules. And your HR department and that ERISA lawyer, they don’t work for you. They exist to protect the company. Any exposure to lawsuit, any potential risk they bring to the company, would be an example of them simple not performing their jobs. Period. So my efforts to enlist them were fruitless. So were the arguments I made based on my personal research. They would win a lawsuit if I brought it against them because I was legally in the wrong and any other action would mean opening them up to a discrimination lawsuit by nearly everyone else in the company and their families. Additionally, my wife wouldn’t qualify for COBRA unless she lost her coverage due to a specific kind of event that doesn’t involve goofing up the enrollment process. So, I needed another option.

First, I briefly looked at private individual health care. I figured it would just be more expensive than the health care provided by my company. One of the phone reps, I believe from Cigna, actually laughed at me when I told her what I wanted to do. Ever heard of pre-existing condition? Pregnancy counts. Additionally, they don’t even support maternity care.

“Wait,” you exclaim, “What about the Affordable Care Act?”

Maybe you hate the Affordable Care Act, maybe you love it, or maybe you just think it’s ok. Regardless, the act did a number of things that could have helped us out. It allowed previously uncovered people the ability to gain coverage, even if they had a pre-existing condition (if you had been uninsured for more than 6 months). It expanded coverage for young adults (if you’re younger than 26). It prevents health care companies from rescinding coverage (for health reasons). It establishes health care exchanges for individual care, an individual mandate for health coverage, and removes the ability for a health insurance company to prevent you from obtaining insurance based on a pre-existing condition (all in 2014). So, we couldn’t use it, not because it didn’t do good things and not because the programs in it wouldn’t have normally worked, but because everything about it that was currently in place excluded specifically my wife in this exact scenario and everything else was going to pop into existence a few years after we likely didn’t need it anymore.

Second, I looked up what would count as a “qualifying enrollment event” based on HIPAA regulations and our company policy. Having the baby counts, but then it’s too late for the pregnancy. Dying counts, but that’s a non-starter. Employment status changes, on the other hand, could work. But the trick is that you have to get a job that has benefits. Then, you have to take those benefits. That’s a bit hard to come by as a pregnant woman — although, we probably could have pulled it off at a corporate Papa John’s location. Additionally, most places have a several month waiting period before you get those benefits and, by then, she would have delivered — my son was born in March.

Third, there’s COBRA. The only way we could get COBRA coverage is if I quit my job before her coverage ended (i.e. December 31st, 2010). For a long time, this seemed to be the most likely scenario and was something I discussed with my boss. I didn’t want to quit, but I was apparently going to have to quit.

But then, I found another way I could get my wife back on my insurance. Yes. It would be expensive. Yes. It would be time consuming. But, it would be less expensive than paying for an emergency C-section in cash, much less a loan. As it turns out, this was my financial saving grace and saved me enough money that I could pay for my son’s 3-4 month NICU stint and multiple surgeries. I could start my own business, hire my wife (and another person, to make it work in Texas), get a corporate insurance plan for small businesses, and set my own insurance policy (which paid 100% health insurance on the first day of employment). The business died very quickly and my wife and the other employee quit within a few weeks. That made my wife eligible for insurance at my present company again. I’m no lawyer, but I did talk to one – one that worked for me. It’s not fraud if you legitimately did it. I paid employees and taxes. I bought domains, wrote designs, and started banging out code. It wasn’t until I found multiple similar products in the marketplace before I stopped — and that was after folks quit.

I’m writing this today because I finally finished filing my company’s federal taxes. All that’s left is to hire a tax professional to handle my personal taxes (because that is just too much string to unwind). I still own the business and might try to pick it up again soon with a slightly different tack — more with what I originally had in mind. And I have learned a stupid amount about health care plans, HIPAA, ERISA, and taxation at the state and federal levels for someone with no interest or background in those fields, all of which I hope to soon forget about. I very much want to celebrate and to take a loooong vacation.