I referred to these questions - Q1 and Q2 but it was long time back. My old job is over, employer regular coverage was till end of Oct, 2019. Starting a contract job(Corp to Corp)-self employed(sole member and owner). Questions:
- If i pay COBRA payments(I don't have any money in HSA for 2019)-can it be pre-taxed? Remember COBRA is not an arrangement I made - it's not an insurance from my corporation, it's something from my past job.
- If COBRA is not pre-tax, how i can get the tax benefits? My medical expenses including premiums are not going beyond 7.5% of AGI(Adjusted Gross Income).
- I cannot make use of my IRA funds to pay the COBRA premium as I am not unemployed for more than 12 weeks(one can pay COBRA or medical insurance from IRA if they are still on unemployment wages beyond 12 weeks)
How I can get the COBRA not tough for me financially? The reason I am keeping COBRA is that though it costs more than 4.5 X - it is still better than exchange plans as I have already met the family deductible and only going to pay 10% of any charges. Very soon I will meet out of pocket maximum then I have to pay 0%. I cannot go for some namesake medical insurance because my family need a good one.
Edit 1 In my case plan goes from 1st Apr to next year(31st Mar). COBRA premium for the family of 4 is $1550 while if i buy the plan from the exchange - even the worst one($14K family deductible) is costing around $1725 per month for the entire family. I don't qualify for premium tax credit. A broker stated that once you loose your COBRA coverage(18 months) then i will qualify for premium tax credit. I am stuck in a tight spot. Is there any better HSA options? My COBRA coverage - family out of pocket is already met. I now pay only 10% of future costs.