Will Work For Health Insurance

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Written by David Rosnick   
Tuesday, 26 July 2011 13:00

An interesting story was posted last week over at the website of the National Education Association.  A Massachusetts special-education teacher — Kathy Meltsakos — was laid off and then rehired by another school district.  At lower base wages, and bearing a greater share of her health-insurance costs, her take-home pay was reduced to zero.

This story may sound crazy at first, but is far from implausible.  According to the pay stub in the accompanying photograph, Meltsakos earned $622.92 in 58 hours of work.  Over nine months, this would total $12,146.94.  An indicated Medicare tax withholding and an 8 percent pension contribution would reduce pre-tax income to $564.78 every two weeks.

If she must pay 60 percent of the price of a full year’s medical and dental insurance over the course of nine months of employment, then $564.78 in deductions every other week implies total premiums of $18,255 per year—or $1,530 per month.  This may be on the high side even for low-deductible plans, but the article does not specify if the insurance covers anyone in addition to her.

That is, it is plausible that this teacher is working nine months out of the year for nothing more than health insurance and a small pension — with nothing left for living expenses.  Because Medicare seems to have been withheld, but not Social Security, it is safe to assume that Meltsakos is exempt from the program and will not receive a retirement benefit in addition to her pension.