Health Insurance With Multiple Jobs

Health Insurance With Multiple Jobs

For the multi-jobbers, coordinating health insurance with multiple jobs is a high-wired act. Here’s some good news: you can have multiple health insurance plans from different employers! While we won’t dissecting the whole health insurance market, you should walk away from this article knowing:

1) Yes, you can be overinsured. No one, especially your employers, will care. Your health care plan is entirely your own business. To further complicate matters, there’s also the once-a-year enrollment period, with off-cycle “qualifying events” allowed only when you (gulp) qualify.

2) The health insurance market allows for coordination of benefits between primary and secondary plans. If you’re paying, then you should ask your providers to perform coordination of benefits and multi-claim.

Now let’s break down some common approaches the Overemployed can take with health insurance with multiple jobs.

Simplest Solution: Stick With Your Primary Job’s Health Insurance Plan

If J1 is your long-term cash cow, then the simplest solution is to stick with your current health insurance plan. Do this even if J2’s health insurance plan is better or cheaper. When in doubt, always KISS (keep it simple stupid). You’re already executing a complex game plan by working two remote jobs at once. Why create an additional stressor for yourself?

Overlapping Health Insurance With Multiple Jobs: The Curious Case Of The Double Insured

For a majority of you, the most likely case is running into overlapping health insurance plans. This is especially true if you enroll in J2’s health insurance when you joined. For a period of 12 months or less (depending on enrollment periods), you’ll be double insured until you can disenroll from J1’s health plan. While paying two insurance premiums isn’t ideal, it’s still far better than not being insured at all. Plus, there’s a tax penalty for not having health insurance. So why not just KISS and have double coverage for a little bit.

Here’s the bonus. Remember the “coordination of benefits” concept discussed earlier? Now with double insurance, you can get some elective healthcare taken care of like skincare or braces at less cost. Caveat: do check with your insurance plans and providers on costs before proceeding.

Also, overlapping health insurance isn’t as uncommon as you’d think. This happens often for those with government health benefits like medicare or medical benefits for military veterans. Now this curious case is happening with the Overemployed as well.

Health Savings Accounts and High Deductible Health Plan For Multi-Jobbers

Remember in the intro we mentioned tax incentives? When in doubt, IRS publication 969 is the source document for what we’re saying here. We recommend you “google” and download the latest PDF for a quick read. We’re not linking it here because the information changes with each tax year.

Health savings accounts, or HSA, let people set aside money pre-tax for health and medical expenses not covered by their insurance plan. There’s never a deadline for using money in an H.S.A., and the account goes with you if you change jobs. The accounts must be paired with a health plan that meets specific criteria, like a high deductible. For 2022, contributions may be as high as $3,650 for individuals and $7,300 for family coverage. People 55 and older can set aside an additional $1,000 in catch-up contributions

#1 Thou shalt have one, and only one, high deductible health plan with a health savings account

Much like multiple 401Ks, the Overemployed can have multiple health insurance plans. However, there’s an exception when enrolling in a high deductible health plan (HDHP). An HDHP is a health plan that qualifies you for an employer-contributed health savings account or HSA. Now the HSA is what financial planners call a triple tax-advantaged investment vehicle (even better than the double tax-advantaged Roth). There’s only one catch – HSA can only be used for medical expenses tax-free, for all other use you’ll have to pay taxes and a 20% penalty (ouch). Once you reached 65, the magical “triple bottom line” happens: you contribute tax-free, use the contribution tax-free for medical expenses, and withdraw tax-free. More on HSA investing and how withdrawal works in another post.

Bottom line: HSA is a tax-exempt account to help defray high out-of-pocket costs when you’ve covered under a HDHP.

An HDHP, as the name suggests, is a high deductible health plan. That means you’ll have to pay more out-of-pocket before the HDHP will kick in to cover the costs. As a result, the IRS allows a tax-advantaged HSA ($7,100 contribution limit in 2020) for employers to contribute and subsidize the high out-of-pocket costs. However, this isn’t charity. Employers offer HDHPs to save on healthcare costs. Young employees in good health should enroll in HDHP to pocket the employer’s HSA contributions, assuming no major health needs. It’s a healthcare casino royale!

Per IRS Pub 969: if you enrolled in a high-deductible health plan, then you CANNOT have any other medical health insurance. Read carefully here. You basically cannot have a “coordination of benefits” with dual insurance if you participate in HDHP with HSA.

#2 Thou can have multiple dental and vision plans still while in a high deductible health (medical) plan

The IRS, however, does allow you to shop around for better or lower-cost dental and other health insurance coverages. See below directly from IRS Pub 969 on “Other health coverage.”

Other health coverage.

If you (and your spouse, if you have family coverage) have HDHP coverage, you can’t generally have any other health coverage. However, you can still be an eligible individual even if your spouse has non-HDHP coverage, provided you aren’t covered by that plan.

You can have additional insurance that provides benefits only for the following items.

  • Liabilities incurred under workers’ compensation laws, tort liabilities, or liabilities related to ownership or use of property.
  • A specific disease or illness.
  • A fixed amount per day (or other period) of hospitalization.

You can also have coverage (whether provided through insurance or otherwise) for the following items.

  • Accidents.
  • Disability.
  • Dental care.
  • Vision care.
  • Long-term care.
  • Telehealth and other remote care (for plan years beginning before 2022).

Key Takeaways

When it comes to healthcare, the Overemployed Way is to keep it simple. You should focus your energy on 2x-ing your income instead. Here’s a quick recap:

  1. Stick with one primary employer for medical insurance
  2. Double health insurance is better than gapping coverage when switching cash cows
  3. Only play in the healthcare casino royale (HDHP with HSA) if you’re healthy or can stomach the risks
  4. When in doubt, elect the option that gives you better sleep at night

Here’s what we don’t want: you or a family member fall ill and find out healthcare costs are uncapped. That defeats the point of being Overemployed and having early financial freedom. Practice KISS instead. Cue the Geico commercial…

12 comments

  1. Excellent article! When I first started working two full-time gigs, I opted to have double coverage in the event that I needed to drop one job I was guaranteed to be covered. However, the “qualifying events” are not as difficult to qualify for as you might think. When I got tired of paying $1k a month for medical coverage through my original employer, I just called them and told them my spouse started working and now has our family covered through her employer. There was no proof required. I would assume the reverse is true as well, if I needed to regain coverage I could have called and just said my spouse was let go and we lost our coverage.

    1. That’s good to know! Mine were quite stringent. Looks like might be employer/benefits administrator dependent. I find the “open enrollment” quite archaic and annoying. It’s all tailored to negative use cases like someone trying to “game” the insurance companies and get coverage before a “big” medical event.

    2. This is the exact information I was looking for. I plan to keep my health insurance only with J1 to avoid paying multiple premiums, but if I decided to leave that job or get let go for some reason, how difficult would it be to then get insurance under J2 because of a “qualifying event”.

      Just curious, which healthcare provider were you working with?

  2. Hello!
    I have “invisible” disabilities that I do not share with the potential employer during the hiring process. I figure the HSAs would not work for me based on the article. Is there any advice you would give me? What should I keep in mind and what should I look for/prioritize?

    Thanks!

    1. Hi! Without knowing all the details of your situation, I’d just make sure you’re properly insured (most employers offer a premium, better, and just good enough type of plans), Pay particular attention to each employer’s short-term and long-term disabilities policy. Some offer 100% STD and 67% LTD, which is quite generous.

  3. Your interpretation of Pub 969 regarding multiple HDHP plans may be flawed.
    Understanding that the tax advantages of a HSA is designed to offset the high-deductible expense, the provisions for “additional health insurance” are traditionally held to be “additional disqualifying health coverage” by coverage not defined by the IRS as a “high deductible health plan” and would reimburse or pay for medical expenses prior to reaching the deductible amount under the HDHP plan.

    That is to say you cant be enrolled in a HDHP at employer 1 and a PPO at employer 2 and still contribute to an HSA with employer #1 because insurance #2 is a disqualifying health plan and would “coordinate benefits” and offer reimbursement or payment before the deductible of the HDHP is reached. This would be the same as enrolling yourself in an HDHP plan but then getting a PPO through your spouse.

    However if you enroll in a qualified HDHP at both employers, there is no reimbursement available until the deductible is reached in at least 1 of the 2 plans and there are no additional cost savings available through coordination of benefits until the deductible is reached under both plans. This is a typical scenario when you and your spouse are both covered by each other’s HDHP plans, thus having “dual coverage” and still being eligible to contribute to an HSA.

    The downside to being dual enrolled in 2 HDHP plans is that they generally do cost you something and many employers these days are also offering additional pay if you decline all health/dental/vision coverage. The upside is that you can capture multiple HSA employer contributions (subject to the annual limit which could get sticky if the combined employer HSA contributions exceed the limit) and you offset the risk of going uninsured if you quit, get fired or get caught at either of your jobs. Coordination of benefits after reaching the deductible may also reduce the overall cost and there may be other benefits depending on the exact details of the plan and costs (.e.g. Employer 1 offers a HDHP with a lower deductible and lower max-out-of-pocket than employer 2’s HDHP plan but the “family coverage” is considerably more expensive with employer 1. Electing “individual” with employer 1 and designating that insurance as primary and electing “family” and covering your “other insured/covered” spouse would allow you and your spouse to contribute to the HSA up to the “family” maximum provided your spouse isn’t contributing to an FSA or HRA; since the HSA funds roll over and the maximum contribution is greater than the FSA, this is generally a more advantageous tax scenario).

    “You can be covered under two HDHPs, though. If your employer and your spouse’s employer both offer HDHPs, you can opt for double coverage and still contribute to your HSA”
    Source: hsastore (dot) com (forward slash) learn-coverage-hsa-contribute (dot) html

    This is also why an HSA can generally only be contributed to up to age 65 as Medicare automatically kicks in and is a disqualifying additional coverage.

    While you can delay enrollment in Medicare Part A, you generally only want to do so under specific circumstances (e.g. still working for an employer with more than 20 employees and covered by a plan at work) to avoid late enrollment penalties in Medicare Part B and even then, due to the complexities with deferring and then getting enrolled, it maybe easier to just take the auto-enrollment and stop contributing to your HSA at 65.

    Note that your article here indicates you can only use HSA funds “for medical expenses until you reach 65” which is definitely incorrect. Its your money and you can use the funds, tax free, for qualified medical expenses at any time, even beyond age 65.

    1. Hey Peter, thanks for this great explanation. I’ve revised the HSA & over age 65 comment to be more accurate. Appreciate the feedback and clarification on double HDHPs. When in doubt, I always lean towards KISS and being more conservative on healthcare. Both HSA and FSA touch the tax code, so game it with care — they’re designed for the one employee, one employer world.

  4. Hey guys. Say you decide to keep the better insurance with Job A and forgo Job B’s insurance but then decide to quit Job A to find a replacement for that, how do you get insurance coverage in the interim under Job B? Commence it under “life changing circumstances”? And if so, how do you prove that? I was think of having the insurance company simply write me a letter to say that I’ve lost coverage under that plan but keep it generic and not mention it’s an employer plan. I dunno. Any advice?

    1. Do you have a spouse or qualify for parents’ coverage? If so, you can say you lost coverage that way. Or just buy health insurance in the public marketplace as gap stopper until you can enroll in J2’s when enrollment opens up.

      1. Question! I’m working 2 jobs and took health insurance for Job A. I am going to leave that job and take insurance from Job B during their open enrollment period. I just found out that it is the same insurance in the same state (both companies based in same city/state).

        If I resign from Job A in October and take Job B’s plan in November, will my employees be notified that I was employed at another company?

        My concern is that if they do would I will be terminated.

        Thanks!

  5. This is a great article.

    For the Overemployed in Canada, I understand government health insurance through each province of territory is for all citizens and permanent residents. There also are no deductibles or co-pays.

    However, the sales tax in Canadian jurisdictions is higher than in most states.

    For additional health benefits (i.e. dental and prescription plans) for Canadian Overemployed, I understand the best approach is to say “no thank you” and have just one plan with the primary employer for dental and related coverage.

    Another approach is to, if you have a significant other, have your supplementary coverage through your partner’s plan .and advise all employer of this situation. But only do so if it is true.

    Giving a knowingly false declaration like that is an act of commission that can be problematic If you do not have a significant other and make such a false declaration “i am on my husband’s plan” and employer finds out thre is no husband, then the employer can think “if X is lying about having a significant other for supplementary health coverage, what other lies have been told.

  6. you have 2 full time jobs, which means you have 2 healthcare/dental/vision/life insurances, will you be caught if you claim your medical/life insurance?

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