How private health insurance can save you money

Many travelers choose to forgo their agency's provided insurance and elect a private policy instead. This option can present you with better medical coverage that travels with you between contracts and agencies. In some cases, this might even be a more cost-effective alternative. For those travelers who take a substantial amount of time off between assignments or jump between different staffing agencies, a private health insurance plan could be the way to go.

Coverage that travels with you

With most staffing agencies, your insurance only lasts as long as you're working a contract. Some companies will provide coverage for a few weeks to a month after your assignment ends, but there may be additional requirements attached, like having another contract already locked in. If you exceed the allowable time off between assignments, you may find yourself without medical insurance. You should be able to elect COBRA to continue your coverage, but this is usually a very expensive option that isn't practical for long periods of time.

With private medical insurance, you don't need to worry about a lapse in coverage. Just like with your car insurance, the coverage will continue as long as you pay your monthly premiums. This is often ideal for those who like to take off more than a month between contracts. You can have the peace of mind that you're covered whether you're working or not.

How much does your health plan really cost?

When assessing the cost of your agency's insurance plans, it's important to remember that your agency is paying a portion of your monthly premium. I asked my agency how much they were paying and received the following information on their most commonly elected plan:

Blue Cross Blue Shield

Individual/Family deductible

$2000/$4000.

Insurance Plan	Agency's Cost	Traveler's Cost	Total Monthly Cost
Employee only	$317.56	$211.72	$529.28
Employee + spouse	$595.40	$489.56	$1,084.96
Employee + children	$516.04	$410.16	$926.20
Employee + family	$820.36	$714.48	$1,534.84

If the traveler opts out of the agency's insurance plan, they can receive the money their agency would be paying towards their insurance. In other words, you can increase your monthly income by the "Total Monthly Cost" column if you don't sign up for their insurance plans. You can think of this in a similar manner to housing stipends. You have the option to take this money and find a policy for yourself that might be less expensive and keep the difference. This is an important concept to keep in mind when you're shopping for a private health insurance policy.

Private plans aren't always expensive

When people think about private insurance plans, they often assume they will be expensive. This isn't always the truth. The best way to find a private plan that fits your budget is through a Health Insurance Advisor. They can help you find a policy where you only pay for what you will use. Some of these plans may be independent of your income and preexisting conditions.

Within a 15-minute phone call, my wife and I were able to find a better plan with a zero-dollar deductible for only $400/month. By using the chart above, we effectively would be saving nearly $700/month between the both of us.

Take action

Try this for yourself. Contact your recruiter and ask them how much of your insurance premium is covered by the agency. Next add their monthly payment to how much you pay per month for your policy. This is the true total cost of your current insurance plan. Use this number as the basis when searching for your new policy.

Next gather the explanation of benefits you get with your current plan, and the total cost of that plan (Traveler's costs + Agency's costs). Now contact a Health Insurance Advisor to see if they can find a comparable or better plan for less. This is a free quote with no obligation to sign up for any plans that are found for you. If they can't find anything better than your agency's insurance, then stick with your current plan.

If you find a similar plan that costs less than your current insurance, ask your recruiter if your pay package would increase, if you no longer take their agency provided insurance. It's likely that your agency will be able to allocate these funds to your pay package since they will no longer be responsible for your medical insurance. This increase could result in an elevated hourly wage. You might need to wait until open enrollment or a qualifying event before you can make this switch.

This perhaps may not work for everyone, but it is well worth looking into. Health insurance is a major monthly expense, that should be frequently evaluated. For many of us travelers, it's likely that we will find a more suitable insurance plan that fits our lifestyle, budget and travel style.