How I afford Health Insurance (as a part-time employee)

Lifehacker.com recently posted an article titled How to Buy Your Own Health Insurance, which further links to their post asking How do you stay healthy without insurance?

I’m not self-employed anymore, but I am underemployed in the retail sector, and classified as part-time to boot. However, I do have health insurance. I have health insurance yet do not lose money every month paying insurance premiums and so can you (providing you qualify for the EITC).

Why does qualifying for the EITC matter? Because our lovely wonderful government allows you to get some of your EITC in your paycheck. It’s an easy way to increase your income without affecting your tax withholding.

What you need to do is:

1. Read the IRS Q&A on the Advance EIC or if you’re in a hurry go straight to the Form W-5 EIC Advance Payment Certificate (PDF link)
2. Fill out the form and turn it into your payroll department. The amount of money you get in your check is based on your wages, whether or not you’re married, and IF you are married whether your spouse also has a Form W-5 in effect.
3. Sign up for health insurance through your employer. Just make sure your monthly premium does not exceed your AEITC.

For the record, I turned in my W-5 first and waited to see how much I actually got in my paycheck before opting-in to my employer’s health insurance plan. I was able to afford health insurance on myself AND to contribute to an HSA.

The Form W-5 does have to be renewed every year. I have the AEITC website bookmarked and when I fill out my preliminary tax forms using my last paystub of the year, I go ahead and fill out the new form.

One last thing: following these directions will reduce the amount of your April 15th refund, since you’re getting it in your paycheck. Personally, I think the peace of mind that comes with health insurance is worth it.