Opting Out

My wife has been in her current job for about a year and a half. Her company has a 6 month probation period, after which she was eligible for benefits – health, disability and life insurance. When her probation period ended, we talked about the type of insurance that she would be getting and compared it to what we currently had. I have been at my place of work for over 10 years now, and I have excellent benefits, including disability, and some life insurance to round out the package given to me.

The way my company’s insurance works (which is probably identical to how everyone else’s is set up) is that you can either be eligible as a single person, or as a family. Family insurance covers 2 or more people, which kind of peeves me off, being a “family” of two, and paying as much as someone with 4 children, but that’s a whole other discussion.

When we looked at what my benefits were covering, what my wife’s potentially would cover, and then looked at actual usage of benefits over the past five years, it didn’t make sense to have two insurance plans. Her plan was going to cost us approximately $500 per year, which we thought could be spent better someplace else in our budget.

I’m usually all for insurance of all kinds. I have CAA, I have probably too much life insurance for us, I pay for a decent amount of car and house insurance and in the past have taken out liability policies for things like weddings and other large parties I’ve “hosted” where things could get litigious. Even with my healthy love for insurance, I couldn’t see double-paying for a lot of stuff we haven’t used or would ever require. My wife requested that she be opted out of the group plan and signed the appropriate paperwork saying that if she ever wanted back in, she would be required to have a medical exam.

Last month, on a normal audit of benefits, it was found that opting out shouldn’t have been provided as an option. We requested documentation stating why she was previously allowed to not be involved in the group plan, but now was being “forced” to do so. At that point, the insurance company made a “one-off” decision to allow her to stay out of the plan.

These are the kind of financial decisions that do take a lot of thinking about. The risk we are taking is fairly minimal, that being a lack of insurance coverage vs. the cost of being over-insured.

My preference would be to have all of the money my employer is currently paying for the remaining benefits plan to be paid to me, so that I can do with it what I want to do. I would rather be able to choose between a super-upgraded private benefits plan or have no benefits at all and invest or spend the money.

Would you have kept the secondary plan? Do you carry private health insurance?

One thought on “Opting Out”

  1. Interesting post and you’ve got me thinking. I was self-employed for many years, but was struggling financially and had no health coverage or benefits other than OHIP. Last year I started a full-time job with benefits, but I’ve made little use of the insurance and I’m upset there is no optical coverage. I really need new glasses! It didn’t even occur to me that opting out of the group plan might be an option, but I’m going to look into it and see if a private benefits plan would suit my needs better.

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