How to we opt out of health insurance during severance period. I do not foresee using health benefits during this time and do not want them to keep taking money out of my severance. Please help.
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I've lucked out. My new job benefits have not yet kicked-in so I am not paying double benefits.
For me, I did the math, if I take it installments, with insurance, it's still cheaper than paying taxes on the lump sum. Granted I only have myself to cover insurance wise. Figure out what the lump sum taxes are, it's usually around 22 to 24% depending on the state you live in.
@cd all insurance is like that. It's useless until you need it.
@e8 my old boss told me the same. Since he was of age, he was moving over to Medicare. He would call me periodically asking when the enrollment would open so he could adjust.
You cannot just shut-off insurance but keep taking bi-weekly severance payments. I asked this question just last week after taking a new job. I was told you can opt out only during open enrollment.
Seems odd to me... If your spouse/partner takes a new job with better benefits, I would think WF would be happy to stop paying their half of your various coverages.
@a6 all insurance companies do is try to take as much of your money as possible anyway. getting su-ked by leeches on all sides.
If you take a lumpsum especially before the year end, you might put yourself in a higher tax bracket which means you lose money in taxes.
If you go from a 12% tax bracket to 24% you effectively are doubling your taxes
Going from 22% to 24% isn't so bad.
@aq tye lump sum would have a higher withholding but everything evens out during tax filing. However, why let the IRS hold your money?
Also, if you stop healthcare, aren't you forced to pay for Obamacare or something?
from a tax standpoint on lump sum it really just matters in terms of what tax bracket it would put you in to at end of year. when all is said and done you won't pay more more taxes than are due based on your income and while the lump sum will be taxed at a federal rate of I think 25%, if your tax bracket is under that you'll get the overpayment back come tax time whereas if your bracket is over 25% you will need to make up the difference.
What if you have a stroke or break a leg during severance? After giving up on health insurance
is there any catch if we take lump sum? Like in taxes?
take a lump sum