One major misunderstanding many international students, scholars, and employees have about health insurance in the US is that what you pay for health insurance through work or school is what health insurance costs. Fehime came to the US through a J1 visa (visiting scholar) and was later able to obtain her green card. Through the J1, Fehime received health insurance for $180 per month through the university. After she received her green card, she was no longer eligible for the insurance program. No worries! She found a job and was confident she could find new coverage.
Except her new job was a contracted position, not a permanent, or full-time position. While the employer mentioned this to Fehime, Fehime did not understand what that meant. Contracted positions are usually only for a set period of time. They earn higher salaries, but do not usually come with benefits such as retirement or health insurance, though sometimes they do. Some contracted positions lead to permanent positions, but this is not guaranteed. A permanent or full-time position is one where the employee becomes part of the company. The position lasts as long as the employee or employer desires. These usually come with benefits but may make less money. Usually, the cost of benefits the employer covers is equal to or greater than the dollar amount made by contractors. For example, say a contractor is offered $80,000 per year while the permanent employee is offered $72,000 per year. On the surface, it seems the contractor is getting the better deal. But the permanent employee saves $12,000 per year by having the employer cover benefits, so it balances out where the permanent employee actually comes out a little ahead. In a contracted position, the employee makes more cash, but the employer saves on benefits, making them both feel like they’re winning. And both might be winning depending on the situation.
Because Fehime accepted a contracted position, she would have to cover her own health insurance. While she did not realize this when she took the job, still, she was not worried. She could afford to pay $200 per month to buy insurance herself with her new job.
Except when she looked into it, the cheapest plans she was qualified to receive in the health insurance marketplace were $350 per month and did not provide nearly the coverage her school insurance did. Similar coverage was closer to $600 per month.
The rules of the healthcare marketplace also confused Fehime. Could she get coverage here without it affecting her goal for eventual US citizenship? (See here for more information on using the healthcare marketplace as an immigrant.) Most immigrants can get health coverage through the marketplace and may also qualify for a subsidy to help make it cheaper. Unfortunately, as a PhD graduate starting a professional job, Fehime made too much money to qualify for cheaper coverage.
Benefits in the US, including healthcare, are paid partially by the employer and partially by the employee. The employee contributes money, but so does the workplace, allowing the employee to receive benefits at a reduced cost. This goes for just about everything from health insurance to retirement contributions (usually done by the employer matching what the employee puts in up to a certain percent), disability insurance, dental insurance, etc.
Most people in the US who take contracted positions fall into one of two scenarios:
- A married person who has health insurance through their spouse
- The job offers a high enough salary that the person can cover their own benefits, which some people would rather do because it allows them to get exactly what they need.
If you take a contracted position, be aware that:
- You will be expected to cover your own benefits and your salary should be higher than a permanent position as a result.
- Covering your own benefits is more expensive than a workplace covering them partially for you.
Taking a contracted position is perfectly fine. Many people even prefer them, particularly those who do not need benefits who would prefer the higher salary. Just know what you are getting into.