Taking a job with no benefits

[mrsimperless]

I have recently been offered a job at a small company. The pay raise would be quite significant, but I would lose ALL benefits that I currently enjoy at my place of employment. This includes health/vision/dental, 401k, etc. The current offer is for a 25% pay raise, but I am going for 35% and could likely get it. My question is for those of you who have taken jobs like this before and have had to provide your own helath and dental insurance. Do you think the pay increase alone would be worth it? I have heard that I can expect to pay around $6k a year or so for health insurance for myself, my (seperated) wife and my 3yo daughter. Obviously if this is the case my pay increase would more than cover it, but I also worry about dental costs and deductibles, and I just know that there must be some more things that I'm overlooking. Anyone with experience in this area have any advice for me?

[Jets80]

Look into the Cobra plan at your old job.....I think they will let you keep the benifts from your old job for 18 months....They can tell you the exact dollar amount how how much it will cost you.

401K...now thats something that is more important then people think...even better if your employer matches any of your money. Might not be much now, but think 20,30 years down the road.

[EagleFan]

To continue Cobra for myself, my wife and my daughter it was over 1000 a month. The quotes I've seen from private companies are closer to 1500 a month so 6 grand a year might not be a high enough number. If it is 1500 than you're looking at 18 grand a year for it. Don't short change that 401K benefit either. It is so much easier saving money through one of them when you don't see the money first, at least for me.

[GrantDawg]

Originally posted by mrsimperless
I have recently been offered a job at a small company. The pay raise would be quite significant, but I would lose ALL benefits that I currently enjoy at my place of employment. This includes health/vision/dental, 401k, etc. The current offer is for a 25% pay raise, but I am going for 35% and could likely get it. My question is for those of you who have taken jobs like this before and have had to provide your own helath and dental insurance. Do you think the pay increase alone would be worth it? I have heard that I can expect to pay around $6k a year or so for health insurance for myself, my (seperated) wife and my 3yo daughter. Obviously if this is the case my pay increase would more than cover it, but I also worry about dental costs and deductibles, and I just know that there must be some more things that I'm overlooking. Anyone with experience in this area have any advice for me?

Make the phone calls. Insurance is tough to get without a group, and is expensive.

[Radii]

If you guys have Kaiser Permanente in your area I'd take a look at their medical Personal Plans.

I had a contract job where I had to provide my own healthcare for 6 months and I had a personal plan through Kaiser that was great. As for the economics of the situation, I can't really help you, I was single, and I knew there was only going to be a 6 month period after which I'd either get a new job or slink back to my old one. I didn't even get dental, I rolled the dice on that one for the 6 month period.

One caveat with Kaiser that might keep many people from going the route I did is that they didn't cover pre-existing conditions. I have no chronic problems that would screw me there so that wasn't an issue.

Wish I could help more!

[KWhit]

Originally posted by mrsimperless
I have recently been offered a job at a small company. The pay raise would be quite significant, but I would lose ALL benefits that I currently enjoy at my place of employment. This includes health/vision/dental, 401k, etc. The current offer is for a 25% pay raise, but I am going for 35% and could likely get it. My question is for those of you who have taken jobs like this before and have had to provide your own helath and dental insurance. Do you think the pay increase alone would be worth it? I have heard that I can expect to pay around $6k a year or so for health insurance for myself, my (seperated) wife and my 3yo daughter. Obviously if this is the case my pay increase would more than cover it, but I also worry about dental costs and deductibles, and I just know that there must be some more things that I'm overlooking. Anyone with experience in this area have any advice for me?

Just make sure that you don't go ONE day without health insurance. If your constantly insured, no insurance company can deny coverage of pre-existing conditions (according to the HR person at my previous employer). But if you lapse at all with insurance, existing conditions may not be covered.

[Coffee Warlord]

Ask yourself the following questions:

Would I come out ahead if I have to pay my own insurance, with the pay raise?

Would I come out ahead ENOUGH to warrant a job change, especially considering 401k loss?

Have I questioned why a company who can afford a 35% raise from your existing salary (assuming you don't make jack shit here) doesn't provide any 401k / insurance coverage?

Do I like my current job?

Would my new job be less stressful / more fun?

Dwell on each and every one of those. Don't get burned switching jobs.

Oh, and I should note...I *realllllly* wonder about the long term stability of a company who doesn't have ANY insurance coverage for their employees. That kinda scares me.

[tucker342]

what Coffee said.

[Qwikshot]

Money isn't everything...benefits mean alot. The tradeoff comes with a lot of risk.

edited to refer that Money isn'teverything, not is.

[Samdari]

FYI the standard figure for value of a benefits package is 40% of an employee's salary. If you get less of a raise than that.....

[Flame Eater]

I work in a (my) family-run business. Least expensive health plan we can find (through the Chamber of Commerce) is an $8,000/year family HMO Plan. No dental. No vision. Consider very carefully; insurance costs are increasing REAL fast!

[scc27]

I second what Samdari said. The personal benefits equal at least 40% when you have to cover additional family members.

[Draft Dodger]

I think I agree with the masses - that 401k and insurance are worth a lot more than you think.

I think it's a bad deal.

[Swaggs]

Also, keep in mind that you can balance the amount you spend by putting a higher co-pay on your insurance. A gamble and probably difficult with a child, but if you do not visit the doctor often, it can save you a bit.

[Airhog]

Don't do it man!!!!!!!!!!

[cuervo72]

What is the situation with paid time off (vacation, sick)? That should factor into the equation as well. And are you currently getting any short-term/long-term/life insurance?

[PilotMan]

Blue Cross Blue Shield is one option for medical if your employer doesn't have coveage. Its coverage, just really crappy coverage if you are already in an HMO.

[mrsimperless]

Originally posted by Samdari
FYI the standard figure for value of a benefits package is 40% of an employee's salary. If you get less of a raise than that.....

Just out of curiosity, where did this umber come from? I've heard similar figures before, but I was unable to locate anything online.

As far as a 401k goes, I can easily understand the value in that. However, I'm not contributing to one right now (money is extremely tight with the seperation) and having this money come directly to me instead of going towards a plan I dont even use would be beneficial in the short term. Once I get my finances back in order I can easily defer some of income to a personal IRA or something equivelant.

I do however, see that I am probably selling myself, or at least my current benefits package short a little bit. I did some initial calculations last night, and they're going to be easily pulling in twice my salary from the people they are contracting me out to. Which leads to another question: what percentage of that money should I expect to get? I don't know the rate that I'll be billed out at, but I'm guessing it is at LEAST around $85/hour. Add to that the fact theat they bill almost 100% of employee time, and these guys will be making some serious cash off of me. Sure, they might always be able to find someone else who will work a little cheaper, but from the numbers I came up with I think they could probably give me a bit more money. What does everyone else think?

And thanks for all the great advice so far!

[Samdari]

I don't honestly remember where I heard the 40% figure. I do know it is thrown around as a national average. This encompasses all benefits, including vacation, holidays, etc.

Don't be too shocked by that double your salary billing rate. My former company billed my time through a govt contract. They billed 100% of the time that I worked to the govt, never eating a single hour that would not fall under the purview of benefits. They billed 2.5 times my hourly pay, and when ALL of the expenses related to my employment were added up (my share of facilities, administration, etc.), only profited about 7%. That profit as 7% of revenues figure is way above the national average I am told (and far, far above the company average).

In terms of not needing the 401(k), I understand you needing the cash in the short term. But, deciding to put money into an IRA later in not a good substitute. If you have an option to contribute to a 401(k), you can always choose not to now, and start later. By choosing the IRA over the 401(k) you miss the company match benefit whenever you are able to start saving.

I am not trying to tell you what to do, I just threw that figure out as (imo, a good) estimate of the value of benefits. A simpler way would be to find out what it would cost to get insurance. You might find that between the higher taxes from a 25% salary bump, and paying health insurance, you end up with less money.

[lynchjm24]

Originally posted by KWhit
Just make sure that you don't go ONE day without health insurance. If your constantly insured, no insurance company can deny coverage of pre-existing conditions (according to the HR person at my previous employer). But if you lapse at all with insurance, existing conditions may not be covered.

Not totally true. Most pre-exisiting clauses only exclude illnesses for which you have been treated for the past 90 days. So if you lapsed, then found out there was something wrong, you'd be ok just as long as you haven't been treated in 90 days.

The dental benefits are much less valuable - as there are usually low yearly limits on indemnity plans, in the neighborhood of $1,500. Many medical plans cover injuries to 'sound' or 'healthy' teeth.

Your COBRA (Consilodated Omnibus Budget Reconciliation Act - the things they teach us at insurance companies) benefits will most likely be much richer then benefits you get as an individual. Keep in mind your COBRA rates will continue to go up as your companies policy renews - so based on whenever the renewal date is you might be looking at anywhere from a 10-30% (increases of less then 10 percent are rare) increase based on the company's claim experience.

[Anrhydeddu]

40% had been standard overhead calculation on labor rates for years (I have done quite a bit of rates calculations and budgeting). But with the increase in health benefits, 45% is now the standard, at least for public companies.