OK. Have to vent. Any other EarthFare (former) employees out here?

[Ms. Toad]

EarthFare announced bankruptcy 2/4 after notifying the employees on 2/3 that their last day of work/benefits/etc. was 2/29 (or earlier).

My $200,000/year daughter (billed medical expenses) scrambled to find an ACA plan and get on it by 3/1. It stinks - she has a new job ($2/hour less), but will have to pay 4 out of pocket maximums (total of 11,400) in 16 months. (EarthFare, ACA, Starbucks for 3 months, Starbucks new plan year) - 2.5 times her normal out of pocket expenses for that time period. What that really means is mom will pay, since $20800/year (assuming full time employment) doesn't really cover $11,400 + the rest of her expenses.

Today - 4 days AFTER she plunked down the money, EarthFare sends out notices to many employees "confirming prior notices" that they will continue to be paid through April 3, and all benefits will continue until then. My daughter has not received one yet. (These were likely triggered by a class action suit under the WARN act, which requires employers to give 60 days' notice prior to mass terminations. They notified them on 2/3, then filed bankruptcy on 2/4. They would have been OK if it had been flipped, since bankruptcy is an excuse - but since they filed AFTER the termination, they shot themselves in the foot.)

So now my daughter has a subsidized plan she is not eligible for (and, presumably the out of pocket caps will revert to un-subsidized - 8500 (rather than 2200), and her premium tax credit for this month will vanish.

And- the icing on the cake - all ACA plans start on the first of the month. So on 4/1, she will still not be eligible. But she has a $24,000 treatment on 4/21 - so we can't just shove things around to start the ACA plan on 5/1 (or at least avoid hitting the $8,500 OOP cap in April).

. . . Less troublesome for my daughter, the employees were actually terminated between 2/3 and 2/28. Her former co-workers have applied and some are presumably are receiving unemployment. That will be a nightmare to sort out now that it turns out they will actually be getting paid through 4/3.

There has to be a better system.

[pat_k]

1. Something to consider...

If she currently makes too much to qualify for medicaid, she can start putting money into an IRA to reduce income to a level that would qualify. When filling the application, you enter the amount you plan to put in (need to follow through and put in the projected total by the end of the year). At least here in WA, money put into traditional IRA (or individual or SEP IRA for self-employed) is subtracted from income in the calculation of MAGI for eligibility (modified adjusted gross income).

[Ms. Toad]

2. I'll have to look into that.

She was on CHIP from ages 0-5 - I was putting my entire income in a Roth IRA (my taxes were $0, so I got the benefit of tax free contribution, growth, and withdrawal)

[pat_k]

3. Yes, check it out...

... I'm not sure that a ROTH reduces the adjusted gross income for purposes of medicaid, but traditional 401k, SEP IRA, or individual 401k definitely do.

I have rheumatoid arthritis with very expensive treatment. I'm in one of those "in between" incomes... too much to qualify for medicaid (before socking money into 401k), but too little to be able to cover health care exchange insurance + health care costs.. (If I didn't reduce income to qualify for Medicaid, I'd just be putting the same amount plus several thousand more into healthcare costs and end up in a lot worse shape. Living on the "after 401k contribution" income is near impossible, but the alternative would be worse.

Insane system.

[Ms. Toad]

4. The Roth doesn't -

I was just trying to reason back to when my daughter was little and we didn't have access to health insurance because the world didn't recognize my marraige & I was being a stay-at-home mom.

My daughter is still living at home, so her expenses are less - and just before this hit she was getting serious about getting her financial life in order.

But yes, insane system. And this company telling them everything was terminated the last day they worked - and now, after those who needed it have found health insurance for March, pretending to confirm something they had never previously said that implies she still has health insurance for another month makes a hard situation worse.

Had they informed her of that earlier, she would have had her March infusion in March (rather than pulling it back into February to make sure it was covered), and she could probably live with moving her April treatment to early May. But that move (plus a delay until May) extends her treatment from 7 weeks to 9 or 10 (at a time when she was trying to get her doctor to shorten the period between treatments).