Work as a contractor for my current employer rather than become a full time employee after my graduation for health insurance continued coverage
There are several assumptions you made, that don't match the current laws: Costs: COBRA:
"But you aren't driving between your two jobs, you're driving for your job. The better analogy would be ""If I didn't buy commercial insurance, but was hiring myself out to do deliveried then my personal insurance better cover me if I hit someone between deliveries"" It doesn't work that way. There is a reason commercial insurance costs a lot more - when your job is to drive, your risk profile increases significantly. There are specific clauses in personal insurance that they aren't going to cover you if something happens while you are using your car for commercial purposes." While I can't say how it is in the Philippines, my wife the insurance broker leads me to believe that individual insurance is more expensive than group coverages in the US almost always.  So much so that people will go to great extents to form any sort of business just to insure themselves. If however it is cheaper, can't you simply opt out of your employer's plan?  If you can opt out, will your employer give you any of the money they aren't paying for your insurance? If you can't opt out, or if you paycheck doesn't grow, I can't see why you would want additional coverage especially at such a young age.  Should you lose your job in the near future and you worry about, go get the insurance then. EDIT One big advantage is if you get personal insurance, you might need to get an exam to qualify, and it is likely the younger you are the better you will qualify. But again, you already have insurance that covers you so I would advise keeping the group policy is probably better. The benefits and taxes thing, in my opinion is the biggie. Most people don't realize that the cost to the company for a full-time employee with benefits can be 2x or even 3x the amount they see in their paycheck.  Health plans are extremely expensive. Even if you are having money taken from your check for health insurance, it is often just a fraction of the total cost, and the employer is subsidizing the rest.  More expensive benefits that contractors don't typically get are 401K matches and paid vacation days. When contractors call in sick or don't work because it is a national holiday, they don't get paid for that day. Also, see that line on your paycheck deducting for Social security and Medicare? That is only half of the tax. The employer pays an equal amount that is not shown on that statement. Also, they pay taxes that go towards unemployment benefits , and may be required to pay higher taxes if they churn through a lot of full-time employees. You can usually let contractors go with relative impunity . For the unemployment tax reasons, not paying for people's days off or benefits, a lot less paperwork, and less risk to the business associated with committing to full-time employees all provide value to the company. Thus companies are willing to pay more because they are getting more.  Think of it like a cell phone-contract. If you commit to a three year contract it can be a pain/expensive to get out of the deal early, but you will probably get a better rate in exchange for the risk being shifted to your end of the deal. you wouldn't have to pay income taxes on the portion for health insurance.  think of high deductible health plans - the employer puts the deductible into a healthcare savings account which is tax free as long as it's for medical care.  right now you can also deduct the portion of your overall expenses that are medical over a portion of your income.  2 issues with your idea, though -  1.  right now, there are people who can't get health insurance except through an employer.  send them out into the marketplace and they will get turned down.  obamacare is supposed to fix this, but if Romney is elected, it will continue. 2.  healthcare inflation rises much higher than regular inflation, so if your benefits were included as part of wages and you had to buy it on your own, you would face a continually decreasing amount of money over time to purchase healthcare - a spiral.  this is the issue that many have with the voucher system the republicans are proposing for medicare - the voucher will rise at inflation, while healthcare rises much higher than inflation - right now I think it's a difference of 1% versus 8-9% off the top of my head.  also, for many industries, it's in the best interest of the company to have a healthy workforce. Conversly, then you should not enjoy the benefits privided by being in a union then right?  That seems simple enough, but that's not how it works.   Unions by law have the duty of fair representaion, so even if you are not a member, you still are awarded all the benefits and protections of the contract.   So, it's not that simple, because how do you balance that if not for fair share?  The union still has to pay to protect you, but you don't have to pay for any of the work they do.  So then, if you can get all the benefits of being in the union and not pay a dime for it, why would you?  Seems logical right, it's a good deal, we all want to save money.   Well as everyone stops paying and the union can't afford to operate as it did, like any organization, it restructures and lays off staff.  Now the union no longer has the resources to offer you good representation, which causes the dues paying members to be frustrated and to drop out and or ditch the union entirely.  Now no one in your workplace has a voice, a contract, or any protections.   That may turn out to be great,  but you know, the company wants to save money too..   The company is also no longer obligated to offer you the same wages or benefits that your coworkers negotiated.  So now the company is free to cut wages, benefits and workforce to improve thier bottom line or executive bonuses. "As a contractor, I have done this exact calculation many times so I can compare full time employment offers when they come. The answer varies greatly depending on your situation, but here's how to calculate it: So, subtracting the two and you get I've run many different scenarios with multiple plans and employers, and in my situation with a spouse and 1 child, the employer plans usually ended up saving me approximately $5k per year. So then, to answer your question: ...salary is ""100k"", ""with healthcare"", or then ""X"" ""with no healthcare"" - what do we reckon? I reckon I would want to be paid $5K more, or $105K. This is purely hypothetical though and assumes there are no other differences except for with or without health insurance. In reality, contractor vs employee will have quite a few other differences. But in general, the calculation varies by company and the more generous the employer's health benefits, the more you need to be compensated to make up for not having it. Note: the above numbers are very rough, and there are many other factors that come into play, some of which are: As a side note, many years ago, during salary talks with a company, I was able to negotiate $2K in additional yearly salary by agreeing not to take the health insurance since I had better insurance through my spouse. Health insurance in the US was much cheaper back then so I think closer to $5K today would be about right and is consistent with my above ballpark calculation. I always wondered what would have happened if I turned around and enrolled the following year. I suspect had I done that they could not have legally lowered my salary due to my breaking my promise, but I wouldn't be surprised if I didn't get a raise that year either." I think the biggest issue here is why are employees still dependent on their jobs to order to receive health care? Why should businesses be responsible for providing this?   What needs to happen in order for us to free businesses from this burdensome requirement? Single payer? Insurance sales across state lines? The number one problem here is cost of medical plans, how can that be lowered? In all probability, having lower coverage levels will result in higher premiums. As my insurance agent explained to me, the higher your coverages, the lower the insurance company believes your risk to be - because you think about insurance smartly, you're less likely to make spurious claims. I have my coverages run at various levels every 18-24 months, and it is almost always true that higher coverages result in lower premiums. Also, there is no guarantee you'll still be employed by the same company if an injury happens. Or that they'll continue to offer the same plans every year. Insurance is a calculated risk on the part of the insurer, and a means of sharing/deflecting risk (at a cost known as your premium) on the part of the insured. Even if your premiums are slightly higher (on the order of a couple dollars per month, for example), do you really want to save a couple dollars and then be surprised when your health insurance company doesn't want to cover something? "While the other answers try to quantify the value of health care the question you ask is about employee vs contractor. The delta between those regarding benefits goes way beyond health care. In fact because almost every full time employee must have health care offered by their employer the option of  ""you can have X with healthcare, or Y with no healthcare"" is no longer an option. I have seen situations in the last few years where employees who had no need for healthcare coverage (retired military) were offered additional vacation days to compensate for their lower cost to the employer. For employee vs contractor what is different isn't just healthcare. It also includes holidays, vacation days, sick days, employer portion of social security, education benefits, and 401k. Insurance benefits include not just healthcare but also dental, vision, short term and long term disability, and life insurance. The rule of thumb to cover all these benefits that are lost when you are a contractor is an amount equal to your income. Of course some of these benefits  depend on single vs married and kids or not. But unless the rate they are paying the contractors is approaching twice the rate they are paying employees the contractor will be hard pressed to cover the missing benefits." "I don't think so. There is a provision in ObamaCare called ""community rating"" that applies starting in 2014. Insurance companies must place individual and small group plans into a pool of people from the same geographical region. The same plan must cost the same for all small businesses from the same region. So having employees who have high costs will not significantly affect the company's cost; it will get factored into the cost for all people in the area; but the effect gets averaged out over all businesses and individuals who have plans." The insurance company is must assume you do have a preexisting condition you are unaware of.  The reason for that is that Affordable Care Act precludes the Insurance company from denying coverage of them if you do.  Insurance companies are businesses.  They are in business to make money(unless you have a nonprofit insurer).  They can not do that if you can buy insurance only when you need for them to pay out.  So even though you may not have a preexisting condition, they are precluded from requiring an examination that would detect the most expensive preexisting conditions (hidden cancers, neurological, autoimmune disorders).  So the companies must do what takes business sense and either deny you coverage or charge a rate that covers the risk they would be forced to take.   In your question on travel there was a response that suggested you get international health insurance instead of travel health insurance that would be considered credible coverage.  You are trying to save money which on a personal level is a good idea.  However that is against the societal and business need that you maintain health coverage during your healthy times to cover the costs of those who need expensive treatment.  So you will be monetarily penalized should you choose to reenter the society of insured people.  Once you have paid the higher rate for up to 18 months you should be able to get a better policy for people who have had continuous coverage.  Alternately you may be lucky enough to start working for a company that provides health insurance with out requiring continuous coverage. "You sure can.  If you are not part of the union you essentially are negotiating on your own.  Many districts simply offer the same contract to make it easy and less of a logistical headache.  No, an employer would not refuse employment, unless it was a ""closed shop"" which requires union membership.  That varies on the state and the profession." 1)  When you apply for insurance you indicate your expected income, they figure the subsidy based on this.  Note that while this data isn't checked it's only an estimate, any errors will be fixed at tax time so lying is just going to gain you an unpleasant tax bill come April 15. 2)  It's not paid in installments, it's just a monthly premium.  It's quite possible for someone to be on the ACA for only part of a year. 3)  I can't address the issue of the fines.  However, you are wrong on who it's for--it's for anyone who doesn't have employer-provided insurance, whatever the reason.  I've been on it since it's inception because I have been self employed for most of that time--there's no employer to even offer me insurance. Perhaps it's best to balance out how it works out for all, especially the most vulnerable, before setting yourself for or against a policy such as this.   You are lucky that you don't have any pre-existing conditions, while others aren't. You earn enough that you are able to afford insurance, even if you're not happy with the fact that you have to pay for it.   But you are unlucky to be working for a company with short-sighted dickheads that look more at the immediate bottom line than they do at their employees. To be honest, if they are scrapping by so much that they need to move everyone to part time to avoid health insurance costs that they already had before, you'd better start looking for another job right away. To be honest I don't know how any of this work in the US so my answer will be of very limited value to yourself, I suspect, but when it comes to the UK if you're going to get the same pay gross either way than being independent makes very little sense.  Running your own business is hassle, is generally more risky (although possibly not in your case) and costs money. Some of the most obvious costs are the added NI, probably the need for an accountant, at around £1200 p/a for basic accountancy service, you are obliged by law to have liability insurance and you probably want professional indemnity insurance, this will be around £600 p/a minmum, and so on and so forth.  On top of that, oficially anyway, as a contractor, you really shouldn't be getting any benefits from the client, and so health insurance, company car, even parking are all meant to be arranged by, and paid by, your company, and can't (or rather - shouldn't) be charged to the client. So - I would say - if you're seriously thinking about setting up a consultancy company, and this client is first of many - set up a company, but take into account the sums you need to earn. If you're really thinking about employment - be an employee.