Pursuing Travel Therapy in an RV

Written by Whitney Eakin, PT, DPT, ATC


A common concern when considering pursuing travel therapy is how to set up housing for each travel assignment. Some therapists will choose to have housing set up by their travel company, while some will choose to find short term rentals, but another option that is growing in popularity is choosing to live in an RV.

Both Jared and I, as well as Travis and Julia, all have chosen to live the RV lifestyle and travel this way. There is a lot to learn when it comes to going this route, so I’d like to share with you some of the basics of pursuing travel therapy in an RV.


Our Journey to the RV Life

camperpic

Jared and I first decided we wanted to travel in an RV during our second year of physical therapy school, in 2014. We knew that we were going to begin travel therapy immediately after graduation in May 2015. We started looking into some of the logistics of finding short term housing for travel assignments, and we realized that moving every 13 weeks, including packing all of our stuff and setting up housing, was going to be a real pain. We decided that for us, having our own little home with all of our stuff packed in would make life easier moving from place to place. We figured we could move more quickly between assignments, decreasing down time/unpaid time off. We also figured it would be cheaper in the long run if we purchased a used RV and could resell it later. So, we were sold on the RV life, and started our search.

We ended up waiting until 6 months into our travel physical therapy careers to purchase our rig so that we could buy it outright and not finance, so we have only had one experience with short term housing in 3.5 years, which was during our first 6 months of work, and we found housing on Craigslist. Since then, we have traveled exclusively in our camper.

Our journey with the camper life hasn’t always been smooth sailing, and we’re honestly not sure if we actually came out significantly ahead financially after all is said and done, but overall we are happy with our choice! There is a lot to consider though, so you need to weigh all the options before you pursue it. Let’s go over some of the main considerations.

Most of these considerations are for newbies to the RV life who plan to do it only because of travel therapy. If you’re already an experienced RVer, and already have an RV, then what are you waiting for?! 😉


Considerations for Choosing the RV Travel Life

  1. Are you going to travel more than 1.5 to 2 years?
    • This is important to consider whether or not the financial investment of purchasing an RV is worth it in the long run.
  2. Can you find a reasonably priced RV and/or truck/trailer combo?
    • If you’re paying a high price for an RV, or financing a new RV, the financial investment will likely outweigh the financial benefit of you working travel contracts. That is, if financial gain is a primary motivator for you.
  3. Are you handy, or willing to learn what it takes for repairs and maintenance?
    • Having an RV is like having a home– on wheels. Things break. It does require quite a bit of upkeep and maintenance. You need to know that going in.
  4. Are you up for an adventure if breakdowns or malfunctions occur?
    • These things do happen, and you have to know how you’re going to respond in a situation with a breakdown or major malfunction. You could wind up stranded somewhere for a while, waiting on repairs, making you late for a contract (hopefully not if you plan ahead). You could have to vacate your RV for a little while to have repairs done. Are these things you’re willing to deal with? It sure can be a relationship builder if you are!
  5. Are you comfortable staying in an RV park/campground setting?
    • RV parks and campgrounds are generally very nice. They are not the same as “trailer parks.” But, you do have to be willing to be a little outdoorsy.
  6. Are you (or your partner) comfortable driving an RV?
    • You need to know if you’re comfortable driving, parking, and backing in the RV; unless you plan to pay to have someone move it for you.
  7. Are you comfortable dealing with emptying waste water and sewage tanks?
    • This is something that us girly-girls might not be okay with. I thought it would bother me at first, but it really isn’t a big deal.

Logistics of Buying an RV

  • New or Used?
    • You can choose to buy new or used, but we recommend used because new ones can be very expensive and depreciate rapidly the first few years! And with our financial independence mindset, financing something like that is not an option. It’s as bad of a financial decision, or worse, than buying a brand new car. The depreciation is significant!
  • How old is too old? 
    • When you buy used, you want to choose one that’s less than 10 years old, because some RV parks don’t allow older rigs for aesthetic reasons. Also, the older ones are likely to have more mechanical problems. So you’ll need to consider your budget, and try to find a fairly nice used rig preferably.
  • Motorhome vs. travel trailer? 
    • For newbies, do your research on the difference. Motorhomes are the kind you drive (like a bus/van) and come in Class A, B, and C. Travel Trailers are the kind you pull with a truck, and there are Pull Behinds, Fifth Wheels, and Toy Haulers. There are a couple other types, but for the purpose of long term living, these are the best options for most people. Unless you want to consider a Pop-Up Trailer, but I feel they’re too small for long term living although we did live beside a couple that was making it work.
    • Our biggest consideration between a Motorhome vs. a Travel Trailer was that we needed to have two vehicles for work. So we figured if we got a truck and travel trailer combo, the truck would serve as one vehicle, while I would drive my car separately. We figured if we had a motorhome, we’d still need two cars, so then we would have three vehicles with engines that could potentially have issues! And we figured that if there was engine or other trouble with the drive train of the motorhome, we’d have to take our whole home in for repairs. So we chose the truck and fifth wheel trailer combo!
  • Do Your Research. 
    • Read up on pros and cons of different brands, layouts, model years, etc. This is especially true for trucks and motorhomes, as different model years could have had recalls, known problems, or certain parts that didn’t operate as well, such as the engine!
  • Choosing the Best One. 
    • The best thing to do is go to a couple dealerships or RV shows and go inside a whole bunch! This will help you narrow down what you are looking for as far as size, layout, and amenities. We chose a fifth wheel vs. a standard pull behind travel trailer because it seemed to be more spacious. We also found that with Jared being 6’4″, he had trouble standing in a lot of the showers, so check the showers and ceilings, tall guys!
  • Getting it Inspected. 
    • If you’re buying used, and you’re not familiar with RVs, it’s a good idea to pay someone who is familiar with RVs to come and check it out for you. We didn’t do this, and we wound up with one that had some water damage we later had to repair, because we didn’t know what to look for.
  • Where to buy? 
    • We scoured RVTrader.com, Craigslist, and local dealerships. We ended up finding one listed on RVTrader.com, then went to see it where it was located 3 hours away. We bought through Camping World, which we felt comfortable with because we also bought an extended warranty plan. We found our truck on Craigslist.
  • Payment/Financing. 
    • Again, we’re not fans of financing, so we chose to work hard for 6 months in order to save up and buy with cash. We realize this may not be an option for everyone. So do what suits you. But generally speaking, it’s along the same lines of the process of buying a car as far as loans go.

Finding Where to Stay

Now, the big consideration with using your RV to take travel assignments around the country, is figuring out where to stay! Sometimes, it can be slightly limiting on your job search, because there are not places to park your RV just anywhere, especially in big cities. Generally, your contracts will need to be more on the outskirts at places they are more likely to have campgrounds. We personally never accept a contract before we have found out for certain that we will have a place to park our RV nearby.

  • Campgrounds/RV Parks:
    • Search Google, use the Good Sam website/app, and call around!
    • You need to make sure that when you do your search, you check to see if it’s just a “campground” or an actual “RV Park.” Some campgrounds are just for tent and weekend camping, not to park RVs, and not for long term.
    • You want to find out if the RV park has “full hookups” (this includes water, sewer, and electric at your site).
    • You want to find out if the campground is open year round because some of them close for the season during the winter, especially up north!
    • You need to call and see if they do monthly stays. Some of them only allow a few days up to two weeks, and will not allow you to stay month to month for your full 13 week contract.
    • Find out if they actually have availability/open sites when you’re going to need to be there for your contract. Places like Arizona and Florida when the snowbirds/retirees come down in Winter to live might be full months in advance!
    • Find out about the amenities they offer, like wifi and cable, and if it’s included in the monthly price or it’s extra. Find out of the electric is included in a set price or if it’s metered based on how much you use.
    • Find out if they have any other amenities like a pool, a store, laundry facilities, or a bathhouse in case you just need a real shower (or in case your water freezes in the camper)!
  • Other Options:
    • Sometimes you can find places on Craigslist that are not exactly campgrounds, but have hook ups for campers. This might be someone’s house or property, maybe a farm or a field that they’ve equipped with hook up sites.
    • Depending what type of RV you have and how easy it is to move around, you could potentially get away with staying somewhere that just had a water source and electric source, then you could go occasionally to a separate dump site for your sewage.
    • Another option if you didn’t have direct sewage hookup at your site is having a Septic Service come out periodically to pump your sewage for a fee, so you don’t have to move your rig.
    • There are some people out there that choose to “boondock” or “dry camp.” This involves staying in a parking lot somewhere or at someone’s house where you didn’t have hookups, just a place to park. You can generally get by on this for a few days or possibly a couple weeks by filling your water storage tanks, having some source of electricity such as a generator or solar panels, using other sources of energy such as a gas stove or battery power, going to a dump station as needed (or as mentioned above utilizing a septic service), or just finding alternative bathroom solutions instead of using your actual bathroom facilities in the RV (think: shower at the gym? I’m not saying it’s the greatest, but sometimes people do what they gotta do)! —-But personally I would not recommend this long term!

There is a ton more I could discuss regarding the RV Travel Therapy Life, but I hope I’ve covered at least the basics for now! I will write future posts going more in depth on issues you might encounter with traveling in an RV, such as logistics of moving place to place, maintenance and repairs, living in different climates, and various pros vs. cons!

Are you considering pursuing travel therapy in an RV? Do you have questions? We have mentored many people on their journeys to living the RV travel life. Jared and I now have 3 years of experience living and traveling in an RV, and Travis and Julia have over a year of experience. Please feel free to reach out to us with your questions, or leave us a comment below!

Whitney

Author: Whitney Eakin

Is Contributing to a Company 401k Worth it as a Travel Therapist?

Written by: Jared Casazza, PT, DPT

What Makes Travel Therapy Different?

Travel therapists are in a unique position with respect to 401k accounts. When working with most travel healthcare companies, therapists will be eligible to contribute to the company sponsored 401k plan. The 401k benefit eligibility will vary company to company, but most companies provide it in some form. However, since many travelers switch between travel companies pretty frequently, it is a common concern whether contributing to the company 401k plan makes sense for them, or if it would just be additional hassle. Unsurprisingly, since most of my articles on FifthWheelPT are finance related, this is definitely one of the top five most common questions I get asked by current and prospective travelers. In addition to wanting to know if using the 401k plan is worth the hassle if switching between companies, I often hear that there is concern about what happens with account once the individual leaves the company or stops contributing to the account.

I hope to shed some light on my thoughts about 401k plans for travelers in this post, but I do not intend this to be specific advice for any of you. This is just what I’ve done and what works for me, but everyone’s situation is different, so be sure to do your own research on the topic as well.

What is a 401k?

First let’s cover the basics of what a traditional 401k plan is and why one would choose to contribute to it in the first place. Most travel companies don’t offer a Roth 401k option, so we can skip over that for now, but if you’re interested in my thoughts on Roth vs. Traditional accounts, you can check that out here.

A traditional 401k is a retirement account that is offered by an employer and allows the employee to contribute pre-tax money to the account from each pay check. The amount contributed is up to the employee, but it is usually based on a percentage of the employee’s taxable income. Since the money isn’t taxed when it’s contributed, it’s able to grow in the account tax free for however long it remains in the account. When withdrawals are made (usually in retirement), the money withdrawn each year is then taxed along with any other earnings (social security, investment income, rental income, etc.). The big benefit of this account is that it allows you to contribute money while working and earning a lot, therefore in a higher tax bracket, and instead paying taxes on the money in retirement while (hopefully) in a lower tax bracket. The money also grows more quickly in a 401k than in a regular investment (brokerage) account since the amount that would have been taxed is compounded. The maximum that an individual is able to contribute to a 401k in 2018 is $18,500, and for 2019 it will be $19,000. Taking advantage of the tax benefits of a traditional 401k (and additionally, a traditional IRA) is a huge part of what has allowed me to semi-retire and travel around this world this year after only three years of full time work as a travel therapist.

401k Employer Match

A 401k sometimes has the added benefit of employer matching. The amount that is matched, if any at all, is determined by the employer and will usually be somewhere between 3%-6% of the employee’s taxable income. The employer can also include a contingency that it is only matched if the employee contributes a certain amount as well. This is the employer’s way of helping the employee have a more secure retirement by contributing to their retirement account. In many companies, the employer match took the place of a pension that used to be standard but has now disappeared in most public sector jobs. An employer match is in no way equal to a pension since the benefit is comparatively small, but any extra money toward retirement is a great thing!

The employer match is great if the company offers one, but for the majority of travelers this will be a moot point. Most travel companies offer a 401k with some sort of employer match, BUT they have a vesting schedule. The vesting schedule determines how much of the employer match you get to keep if you leave the company early, which makes this an incentive for the employee to stay with that employer. Many of the companies require that you have to work between 3-5 years with the company to keep all of the employer match. Some plans will have a tiered vesting schedule: something along the lines of at one year you keep 20% of the matched amount, at two years you keep 40%, etc. However others have a “cliff” vesting schedule: something like if you work three years or more you keep all of the matched amount, but if you leave before three years you don’t keep any of the amount that has been matched. Basically, the 401k employer match is great, but unfortunately it won’t apply to travelers that switch between companies often or that don’t plan to work three years or more as a traveler. In that case, an individual retirement account could make more sense and involve less hassle for the traveler.

Traditional Individual Retirement Account

A traditional IRA (Individual Retirement Account) is another option which has the same benefits as a traditional 401k, and doesn’t require an employer to utilize, and one other big difference, the contribution maximum. A traditional IRA allows a maximum contribution of only $5,500 for 2018 and $6,000 for 2019. If you’re a big saver like me and plan to reach financial independence as quickly as possible and maybe even retire early, then that’s a relatively small maximum each year.

If you plan to switch companies often, and therefore won’t benefit from the employer match, and don’t plan on putting $6,000 or more toward your retirement account each year, then foregoing the 401k and choosing an IRA instead could be the best choice. An IRA does have the added benefit of more flexibility between investment choices. With a 401k, the investment choices are usually limited to 10-20 options chosen by the company, whereas with an IRA the investment options are essentially limitless.

Utilizing a 401k and an IRA

For those, like me, that plan to put more than $6,000 toward retirement each year, then contributing to a 401k account in addition to an IRA will likely be necessary even if the individual won’t benefit from the employer match.

Luckily, having a 401k and an IRA is pretty easy, even if you switch travel companies often. (Keep reading below to learn more about that process if switching companies.) I’ve switched between companies on a few different occasions and have always taken advantage of a 401k account if offered, while also contributing the maximum amount to both the 401k and an IRA.

There are income limits where the benefit of an IRA (the tax savings) starts to diminish if the individual is also contributing to a 401k, but the limit is higher than most traveler therapists will make at $63,000 of adjusted gross income (tax free stipends are not factored into this number).

In my opinion, if you plan to save more than $6,000 toward retirement each year, then it makes the most sense to me to contribute the maximum to an IRA, and then any additional money you wish to save would be invested in the 401k. This is assuming that you wouldn’t benefit from the employer match, but if you would, then it would be foolish to pass up that match.

Here is the general order of operations that I have used and that I think makes the most sense:

  1. 401k contributions up to the amount to get the full employer match (if applicable)
  2. IRA contributions up to the maximum ($6,000 for 2019)
  3. 401k contributions up to the maximum ($19,000 for 2019)
  4. After tax investments (brokerage account, real estate, etc.)

If your company doesn’t offer an employer match on the 401k or if you won’t be able to benefit from it due to the vesting schedule of the company, then skip #1.

What Happens to the Money and 401k Account When Switching Companies?

Let’s say that you follow the order of operations above and stay with the same company for your first year as a travel therapist, but then get a better offer from a different company and decide to switch. You knew that you would probably be changing companies eventually, either for a better paying job or a job that your company may not have, so you assumed you wouldn’t benefit from the employer match. You maxed out your traditional IRA and contributed an extra $10,000 to your 401k. Great job!

Now, since the IRA isn’t associated with the employer, it isn’t affected at all by switching companies. That account belongs to you only. But the 401k is affected by switching companies, so you’ve got a decision to make.

Here are your options:

  1. You can have the money paid out to you.
    • This is almost never a good idea since you will not only pay taxes on the money, but also penalties!
  2. You can keep the money in the 401k account of the employer
    • This will occasionally involve additional fees since you no longer work for them.
  3. You can roll the 401k over from your previous employer’s 401k account to your new employer’s 401k account.
    • This could also be a hassle if you don’t plan to stay with the next company very long.
  4. You can roll over the 401k into your already existing traditional IRA account.
    • In most cases, and what I’ve always chosen to do. It makes sense to roll the 401k balance over into your traditional IRA. This gives you the increased flexibility with investment options mentioned above, which usually means lower fees on the investments as well which is a wonderful thing. The account is also yours and not associated with any employer, so you don’t have to worry about moving it around again at a later time. And the accounts work the same way with taxes, and you won’t have to pay penalties.

401k Rollover to Traditional IRA

By rolling the money over into your traditional IRA account, you have essentially contributed the full $16,000 (investment in the IRA to the maximum plus the investment in the prior 401k plan that is now rolled over) to your traditional IRA. This is an easy way to effectively contribute more than the maximum amount to an IRA when switching companies. This simplifies your finances (less accounts to keep track of) and gives you more investment options which are both great things. The rollover process is very simple and can be repeated every time you leave an employer and have a 401k balance with them. I have rolled my 401k balance into a traditional IRA several times and it has never taken more than 30 minutes.

For those travel therapists that are saving a significant amount toward retirement each year, I think that this is the best option with all things considered. I max out my IRA, contribute as much as possible to my 401k, and then roll the 401k into the IRA each time I leave a travel company to give myself the most investment options and to keep my financial life as simple as possible, while still contributing over $20,000/year to the accounts that wouldn’t be possible with a traditional IRA alone.

If you do this as well then you’ll want to make sure that it is a direct rollover. More information on the different types of rollover can be found here.

Conclusion

I know that for those of you that aren’t very familiar with saving and investing, this can all sound intimidating, but it really isn’t very difficult and takes minimal time to figure out and implement.

For those travel therapists that don’t plan to save more than $6,000 toward retirement each year, then just foregoing the 401k and choosing an IRA instead is the most simple option. For those that want to save more than $6,000 per year and also switch companies often, it’s worth the extra effort to contribute to the company’s 401k plan once you’ve maxed out your IRA for the year and roll that 401k over each time you leave a company. Once you’ve done it once it’s a piece of cake and will take you no time.

Above all else, make sure that you’re saving for retirement in some capacity no matter what account(s) you choose to utilize!

Remember to do your own due diligence before implementing anything that I talk about, since this is not intended to be specific advice for you. Thanks for reading and I hope that this post helped to clarify things for you.

If you have any questions about this post or anything else travel therapy related then contact us and we’ll do our best to help you out. If you need assistance finding a good travel therapy company or recruiter then reach out to us and we can help you there as well.

How do you currently handle your retirement accounts as a travel therapist? Let us know in the comments!

 

Understanding a Travel Therapy Contract Bill Rate

Written by: Jared Casazza, PT, DPT

All travel therapists want to get the most money possible out of their contracts. In fact, the increased pay associated with travel therapy is the #1 reason that most people that we talk to choose to travel in the first place, so not getting as much money as possible would be no good. While there can often be room to negotiate when presented with an initial offer from a recruiter, there is, of course, a limit to how much they can actually pay a traveler for each contract. The big limiting factor in the equation of pay for any travel contract is the “bill rate.”

What is a Bill Rate?

A “bill rate” is the amount of money that the facility (hospital, clinic, nursing home, etc.) pays the travel company for each hour that a traveling therapist works. As travelers, this is a number that we rarely ever find out about, since it is negotiated between the travel company and the facility usually before they ever even list the job or present it to travelers. Most recruiters do not wish to share this number with travelers either, but you really can’t blame them for that. The bill rate is much higher than the hourly rate that the traveler receives, but that is because it has to account for all overhead costs and company profits as well, so sharing the bill rate could make the traveler feel like they’re being taken advantage of, even when that’s not the case. BluePipes wrote a great article on other reasons why travel companies don’t divulge bill rates as well, which you can find here.

How Much is an Average Bill Rate?

Bill rates vary drastically depending on setting and area of the country (just like traveler pay), but I’ve heard of ones as low as $60/hour and as high as $80/hour, which shows why there can be such variation in traveler pay across the board, since it’s all based on the bill rate. In some situations, the bill rate can even be higher if the facility is in urgent need of a traveler and is willing to pay more to get someone there quickly. In general, the facility is going to pay the travel company as little as possible, while ensuring that their opening will be filled, so how desperate they are can have a big impact on the bill rate.

So if a company is receiving around $70/hour ($70 x 40 = $2,800/week) from the facility, while the traveler is only getting a take home pay of about $1,600/week, where is that extra money going?!

Costs that have to be Subtracted from the Bill Rate

Overhead costs of running a travel company can be pretty high. The company has to pay staff (recruiters, managers, payroll department, benefits department, etc.), for rent and utilities on their offices, for marketing, for taxes, and they also have to make a profit in order to stay in business. This all usually adds up to about 20-25% of the total bill rate, depending on how big the company is and how much their overhead costs in total. That means that after overhead costs are subtracted out, that $2,800/week turns into about $2,100/week.

From there, we have to consider that the company pays for part of the traveler’s health insurance (assuming the traveler chooses one of the company sponsored plans); maintenance fees on 401k plan; CEUs (if offered by the company); FICA taxes on the traveler’s hourly pay (7.65%); and credentialing costs for the traveler for each assignment such as: license reimbursement, travel reimbursement, drug tests, TB tests, and backgrounds checks.

They also usually have to keep a small percentage to account for contract cancellations, since when a traveler’s contract is cancelled early, not only does the traveler lose out on money, but so does the travel company. I think of this as like an “emergency fund” for the travel company for when unexpected events occur.

It’s also important to keep in mind that the “take home pay” amounts that we usually use to discuss travel contracts is after the traveler’s taxes are subtracted out, which means that the travel company actually pays you more than that amount, but that’s the amount you see on your paycheck after federal, state and FICA taxes are subtracted. So “take home pay” refers to after-tax, or net pay, not gross pay.

For example, a $1,600/week “take home pay” usually means that the travel company actually pays out $1,800/week in gross pay to the traveler. It’s easy to see how the $2,100/week devoted to the traveler’s pay can quickly be reduced to much closer to that $1,800/week figure paid out to the traveler each week, once all of the above costs are factored in.

Getting the Highest Pay Possible

In most cases, honest recruiters are doing their best to offer the highest pay possible to the traveler, within the bounds of the bill rate that they have to work with. Many travelers hear about how high some bill rates can be and quickly assume that recruiters are trying to take advantage of them, without first considering all of the costs incurred by the company, taxes they have to pay, and also also the benefits offered to the traveler that aren’t seen in the weekly take home pay number. Don’t forget to consider these factors before jumping to conclusions! But, it doesn’t hurt to push for more money when you feel it’s warranted, have considered all the “extras” already included in your pay package, and have considered the type of job, location, and cost of living!

The bill rate is also the reason that it is important for travelers to push for higher pay for overtime hours worked. Overhead costs don’t need to be factored into overtime hours worked, due to them already being accounts for in the initial 40 hours. With overtime, the company will get the same bill rate (sometimes 1.5x the bill rate even), while the traveler only receives 1.5x their taxable pay rate in most cases. This is a great situation for the travel company, but a terrible situation for the traveler. So understanding how the bill rate works and how your pay is broken down is a key factor here in advocating for yourself with a higher overtime rate!

Conclusion

It’s very important to have an understanding of the bill rate and all the costs that must come out of that hourly pay amount the travel company receives from the facility, in order to understand how your weekly take home pay is determined as a travel therapist. The more you understand, the better you can advocate for yourself and get the highest pay possible.

I hope you have a little better insight into how the weekly take home pay amount is calculated now with a basic understanding of bill rates!

Thanks for reading and feel free to ask any questions you may have on bill rates or anything else travel therapy related in the comments below or contact us directly. If you need some recruiter/travel company recommendations that we trust to not take advantage of you as a traveler, then send us a message here and we’ll help you out!

Should You Get a Contract Extension Bonus as a Travel Therapist?

Written by: Jared Casazza, PT, DPT

The Benefits of Extending a Contract

If you are a prospective or current traveler whose primary goal with travel therapy is to earn as much money as possible (likely to pay off student debt), then extending contracts when possible is a great idea. Whitney and I always try to extend contracts in places that we enjoy, and I actually extended my very first contract as a new grad twice for a total of nine months there. Extending a contract means less, or hopefully no, downtime between contracts since you don’t have to move to a new location. Most travelers choose to take at least a week off between contracts to move to their new assignment location. but that missed work means less money earned. Mitigating time off is a primary way to earn more throughout the year. Additionally, extending a contract is also easier because you’re already accustomed to the facility, staff, and patients.

Another big benefit of extending a contract is that you can almost always earn more money on the extension than you did on the original contract, either in the form of a bonus or an increase in taxable hourly pay. We usually try to get about $1-$2/hour extra when extending a contract, which ends up being $40-$80 more per week or $500-$1,000 more over the course of a 13 week contract! A dollar or two extra per hour may not sound like much, but it really adds up over time. Another option is to have the travel company reimburse travel expenses incurred while traveling back to your tax home if you plan to do that at any time during the contract. A reimbursement is almost always better than increase in taxable pay, if possible, because reimbursements aren’t taxed and therefore will mean more money in your pocket.

Understanding “Extension Bonuses”

Some travelers believe that getting an extension bonus means that the recruiter was keeping more money than they needed to be on the original contract, and now they’re somehow able to offer you more money the second go round, but that is not the case. So where does the extra money come from? Let’s investigate the answer to this question!

When you start a new contract as a travel therapist, the travel company has some upfront costs that they have to cover in order for you to start. These costs include things like: travel reimbursement for you to get to the new place, license reimbursement if applicable, background check, drug test, and TB test. All of those costs added together can end up being a significant amount of money that the company pays out in the beginning before you ever start working at the new place. These costs have to be accounted for by the company of course, so they reduce the amount that you make each week so that these costs can be recovered throughout the course of the contract. This reduction in the traveler’s pay is to be expected since all of our pay, reimbursements, and the travel company’s overhead costs, as well as their profits, come out of the “bill rate” that the facility pays the company. In other words, all the money has to come from somewhere, and that somewhere is what the facility pays the travel company. Under normal circumstances where the traveler moves to a new facility after every contract with no extensions, the company has to incur these costs again before each new contract. On an extension however, these costs aren’t incurred again, which means that there is extra money that can be added to your pay!

Negotiating Extension Bonuses with Your Recruiter

Most experienced recruiters understand that by the traveler extending in a location, there will be extra money to allocate to the traveler on the extension. But I’ve worked with recruiters in the past that say that an extension bonus isn’t possible since the bill rate is the same for the extension, and the facility “isn’t offering any additional money.” Unfortunately, they were overlooking these costs that the company would be saving on the extension. After explaining how they would be saving money on the things I mentioned above for my extension, I’ve always been able to negotiate some amount of extra pay or bonus for the extension.

It’s important to discuss this with your recruiter and make sure you are on the same page. You are your own biggest advocate and need to be an informed and educated traveler.

Bottom Line

Less missed work and higher pay on an extension make it a no-brainer if you’re at a facility and location that you enjoy AND the facility needs continued help. Always be sure to ask for more money on an extension if the recruiter doesn’t automatically give it to you, and be sure to mention the costs that they would save by you extending instead of taking a new contract to back up your request.

If you have questions on this topic or would like recommendations from us on a contract, extension, or working with travel recruiters/companies, please reach out to us and we will be happy to help!

 

Travel Therapy: Pros and Cons of Home Health

Written by Travis Kemper, PT, DPT

As travel therapists, there are a lot of opportunities to work in home health across the nation. And, the pay is usually pretty high which makes it an attractive option. It might be even more attractive for someone who is getting started as a new grad and looking at a large amount of debt to pay off. Recruiters often offer to submit new grad therapists to home health positions; but, as with everything, there are some positive and negatives to consider with home health therapy that should be taken into account before being submitted.

Here’s my take on working in home health after doing my first two travel physical therapy contracts in the setting. I will expand further on each bullet point below to give you a more comprehensive view of my thoughts, but here is an overview of the basics:

PROS:

  1. Even as a new grad, you have will the opportunity to dramatically improve the quality of care that patients are receiving in this setting.
  2. You can create closer relationships with patients than in most settings, and potentially make a larger impact on their personal lives than in other settings.
  3. You can make your own schedule, or at least have a significant amount of flexibility in your schedule.
  4. The pay is much higher than other areas of practice, although of course pay also depends on location.

CONS:

  1. On the flip side of #1 from the “pro” list, the con in this situation is that your colleagues may not be the best and your patients may not be receiving the best care across the board.
  2. There may be the potential for less growth as a clinician in this setting.
  3. Sometimes there are higher productivity requirements.
  4. There is more time spent in front of a computer than in other areas, and way more time being sedentary. The paperwork is much more intense than any other setting where I have worked.

 

Let’s take a closer look at the positive aspects of working in home health:

1. As a clinician, and even as a new grad, you can dramatically improve the quality of care that patients are receiving: This is in some ways a pro and a con.  The pro is obvious: you can literally be a rock-star clinician in home health on day one. I was told on numerous occasions, by numerous people, that I was the best home health provider that has ever come to see the patient. That’s awesome, and very rewarding for you as a clinician, but also incredibly sad. Check out the cons list below to see the flip side of this.

 

2. Potential for increased quality of relationships: I have patients/caregivers that still contact me from across the country to tell me how much they appreciate the work I did for them. There is a great potential to make a larger impact in your patients’ lives than in other settings. There is nothing in healthcare that can prepare you to see how a patient moves in his/her home environment. Sometimes you must get creative to make their homes work for them. I routinely helped patients redesign their living rooms to make them safer, and I also removed two bathroom doors because the patients’ assistive device would not fit through the door and the patients could not safely access the commode without a device.

 

3. More flexibility in your schedule: Because you can design how your day looks with visiting each patient, it allows things like making stops to the post office or other businesses that have daytime only hours much easier to manage. It also makes it easier to design a schedule that works for you as an individual, within reason.

 

4. Higher pay than other settings: This depends on the location, but home health is almost always one of the highest paying settings. This is a huge pro for choosing to work in this setting. More money, more options in life.

 

Let’s take a closer look at the negative aspects of working in home health:

1. Other clinicians in this setting may be sub-par: As I mentioned above, sometimes you can really stand out in home health as an amazing clinician, because unfortunately sometimes the patients are receiving sub-optimal care from other clinicians. Sometimes, depending on the team you are working with, you may have to perform tasks or communication for the patient that is more appropriate for another discipline, such as nursing, social work, or another therapist, or else the patient will not get the care they deserve. For example, at one point I worked with an OT who would perform an evaluation, make goals, and on the next visit perform a discharge stating all goals were met, when the patient had not received or been trained on half of the recommended equipment. This happened with several patients. Unfortunately, when providers are paid for quantity, as is the case with most home health companies (presumably because that is how insurance pays the company), quality of care will decrease from most providers. This caused me a lot of stress because I care about my patients, and I get incredibly frustrated when I see sub-par care.

Here’s a quote that I feel is appropriate to my experience in this situation: “People that aren’t used to quality always chase quantity.”- unknown

 

2. Potential for less growth as a clinician: When it comes to growth as a clinician, I believe you grow by seeing and interacting with other therapists as well as performing personal research, going to conferences, and earning CEUs. In home health, although you often work with a team, you are by yourself almost all the time. I truly feel that as a physical therapist, I did not grow nearly as much in this setting as in other settings where I have worked.

 

3. High productivity standards are standard: This has obvious downsides. I have only taken hourly positions in home health, but the company will still try to enforce productivity standards on you. This is the toughest thing, especially with the cons listed about your potential coworkers and why you can be a “rock-star” as a new grad, which requires extra work from you if you want you to provide the best care. This combined with last con on the list (see below) are the reasons that, unfortunately, I probably won’t be doing home health anymore.

 

4. Lastly, the paperwork is brutal! People have tried to tell me that it is no worse than other settings, but I have worked in just about every setting between clinicals and paid positions, and it is by far the worst in my opinion. Every day I would spend half my day documenting, and that was with doing as much as possible in the home with the patient.  Combine documentation time with drive time, and you have landed a sedentary profession. I chose a career with physical in the title. I don’t want to sit, and I hate computers!

Conclusion

Overall, I think home health can be a great place for the right person. If you’re very organized and don’t mind increased paperwork, you can make a huge impact in this setting right away and really feel you’ve provided a lot of value to your patients. But, there are definitely some cons to consider, and you want to make sure to ask all the right questions before going into a contract in home health.

I hope this helps you! Please feel free to reach out with any questions about home health here. I will happily look at your contract, set up a phone call to chat about home health, or provide any other assistance I can.

Stay tuned for a future post about specific questions I recommend asking during a home health interview!

Navigating the ACA Health Insurance Marketplace as a Travel Therapist

Written by: Jared Casazza, PT, DPT

As I mentioned in my last post regarding the various health insurance options for travel therapists, Whitney and I have consistently chosen to take the company sponsored health insurance over our past few years as travel physical therapists. However, this is no longer going to be a viable option for us moving forward since we took six months off in 2018 and will likely be taking nine months off in 2019. Taking the company sponsored insurance and then using COBRA once we finish our assignment would be much too costly for that long period of time between contracts, so starting in 2019 we are planning to sign up for an ACA marketplace plan.

I’ve done a lot of reading and researching about the marketplace plans as well as the subsidies offered, and I hope to shine some light on them for you based on what I’ve learned. Keep in mind that health insurance costs can vary greatly depending on location and that some states have more or less options than others. The information in this article is going to be based on my own information for my home state of Virginia. It’s possible that your own state will be different, but I imagine that much of the information will apply to some degree for every state.

Disclaimer: this is not meant to be personal advice for your individual situation, as I am not an insurance expert or financial advisor. This is information that I’ve learned from reading and researching, and that I plan to implement in my own situation. Everyone’s situation is different, and this information could change at any time. If you’re interested in doing anything similar, then do your own research or reach out to a licensed professional for help, as this post is meant for illustration purposes only!

 

Background on the Different ACA Marketplace Plans

The plans offered through the marketplace have various premiums, deductibles, and out of pocket maximums, as well as other distinguishing features. These plans are tiered into levels called Bronze, Silver, or Gold based on cost and how good the plan is in general. You can usually expect a Bronze level plan to have a lower premium cost, but a higher deductible and out of pocket maximum, while a Gold level plan will likely have a higher premium but better coverage. It’s always important to look at the plans closely to find the one that fits your needs the best since even plans in the same tier can differ significantly at times.

Another factor to consider is that as travelers, we move from state to state often, and since health insurance is purchased through your home state, coverage and providers could be limited in some places that you may travel to. It is a good idea to consider this when choosing a plan. You can check out the website of the insurer that the plan will be through to see if they cover providers in a variety of places nationwide, or just in and around your own home state. For marketplace plans, there is a section (shown below) where you can go to the website of the insurer to see where providers are located.

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Depending on your situation (mostly your Modified Adjusted Gross Income), it’s possible that you will be eligible for subsidies (the ACA marketplace refers to these as premium tax credits) that can make a health insurance plan bought through the marketplace even cheaper than the company sponsored plans available to you. These subsidies are available to anyone that makes between 100% and 400% of the federal poverty level. The 400% level actually ends up being a pretty generous amount of income to still qualify and will include the majority of travel therapists. The reason that many travel therapists will qualify is because of a generally lower AGI, due to part of our income being untaxed. Oddly enough, with an income less than 100% of the federal poverty level, you wouldn’t be eligible for any of the premium tax credits since it is assumed that you would qualify for Medicaid in that scenario. Below are the income levels that would qualify you for premium tax credits (subsidies) for 2018 courtesy of ehealthinsurance.com.

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An Example Scenario

For a traveler working 48 weeks per year, making a taxable income of $21/hour, he would have a Modified Adjusted Gross Income (MAGI) of approximately $21 x 40hrs x 48 weeks = $40,320. The traveler would still qualify for a partial credit at that point, which would help to make the health insurance more affordable.

Let’s assume this traveler is a single, 30 year old, at an income level of $40,320 with his tax home in VA (which would be a scenario for me if I was working 48 weeks per year). In this scenario, he would be eligible for a subsidy of $222/month as shown below in a quote from the healthcare.gov website.

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With this premium tax credit accounted for, his cheapest option through the marketplace would be a Bronze level plan, for a monthly premium cost of $168.40. He could also get a Gold level plan for $283 that has a much lower deductible and out of pocket maximum. But if it were me, I’d opt for the lower cost plan since I likely wouldn’t meet the deductible either way.

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$168.40 isn’t terrible, but it’s definitely more than I’d like to spend. Luckily with some smart planning, the traveler in this scenario can bring this cost down significantly! An easy way to reduce his MAGI is through 401k contributions. Not only will these contributions save him money on taxes, reduce his student loan payment (only on an income driven repayment plan), and set him up for a better financial situation in the future, they will also save him money on his health insurance premium cost by giving him a higher premium tax credit amount!

Another Scenario – With 401k Contributions

Let’s consider the same situation as above with the traveler that is working 48 weeks per year, but now let’s assume that he maxes out his 401k, which is $19,000 for the 2019 tax year. That would bring his MAGI down from $40,320 to $21,320. Now we can see what he would be eligible for with a MAGI of that level.

With the same variables as above (30 y/o male in VA) the lower MAGI now makes him eligible for a premium tax credit of $458/month!

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With a premium tax credit of that amount, a Bronze level plan would be $0/month (even HSA eligible!), and a very good Silver level plan would only be $48! Both of these options are shown below.

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Basically, by contributing $19,000 to a 401k, the traveler in this example would save $168.40/month ($2,020/year) in health insurance premiums, while also saving about $4,000 in taxes (between VA state and federal taxes). That’s a pretty awesome return on that investment.

It should also be noted that the reason the deductible and out of pocket maximum on the Silver tier plan in the above scenario are significantly lower, in addition to it being in a higher tier than the Bronze plan, is due to Cost-Sharing subsidies. These are an additional layer of subsidies on top of the premium tax credit that are put in place to specifically reduce the deductible, co-pays and out of pocket maximum for low income individuals/families. These cost-sharing subsidies only apply to the Silver level plans and aren’t available for the Bronze and Gold plans at all. The closer an individual is to the 100% of poverty level (without going below that level as noted above due to Medicaid territory), the lower not only the monthly premium gets for the Silver level plans, but also the lower the deductible, co-pays, and out of pocket maximum gets as well.

Drawing Some Conclusions From These Scenarios

At an income level of $12,500, one would be able to qualify for a Silver level plan with a $3/month premium, a $250 deductible, and a $700 out of pocket maximum! Healthcare plans don’t get any better than that these days.

Even with this being the case, I don’t think it’s worth it to go below the $19,000 MAGI level, at least in my case, since I don’t use my health insurance often anyway and would rather have a plan that is eligible for an HSA. None of the Silver tier plans that I have seen qualify for an HSA.

Another downside of a MAGI near the poverty level would be limited benefit from the Saver’s Credit since it’s nonrefundable (more on that in this article). On the other hand, for someone with higher medical costs each year, having a much lower deductible and out of pocket maximum could be worth much more than the value of having an HSA and the Saver’s credit so this is definitely something to consider depending on each individual situation.

If contributing $19,000 to a 401k is too much for you, don’t worry there’s still hope. Even at an MAGI of $27,000, which would be a 401k contribution of about $13,000, the monthly premium for a Bronze level plan would still only be $2.60/month. The premium steadily increases from that point as MAGI continues to increase.

Even though I don’t need any extra incentive to max out my 401k each year, I’m happy to accept a reduction in health insurance premiums for doing so! In this case, the more you contribute to your future retirement the more you save on health insurance now. So, even if you can’t contribute a large amount, it’s definitely to your benefit to contribute as much as possible. It’s also important to point out here that even though traditional IRA contributions reduce your AGI, they don’t reduce your MAGI since they are added back in to calculate your MAGI. For this reason, the only real meaningful ways to reduce your MAGI would be with a 401k or health savings account.

Our Plan for 2019

For Whitney and I, we plan to contribute enough to our 401k and HSA to get our MAGI down to around $18,809. At that level, not only will we have the option of a free Bronze level health insurance plan through the marketplace, but we will also pay $0 in federal taxes and have a $0 income driven student loan payment! How can you beat that?

Running Your Own Scenarios

If you’re interested in getting quick quotes for your own situation and don’t want to enter your information on the healthcare.gov website, I’ve found that this subsidy calculator works well and is really quick and easy to use. The downside is that, at least for my state, it doesn’t show the actual cost of the plans available, just the amount of subsidy that I would receive. The healthcare.gov website is definitely the most comprehensive way to compare different scenarios, and I encourage you to familiarize yourself with the site and see what you’d be eligible for based on your situation.

Take-Home Points

  • For a travel therapist that wishes to take significant amounts of time off between contracts or switch between different travel companies often (especially those that often meet their health insurance deductible), travel company sponsored health insurance probably doesn’t make sense. Luckily as travel therapists, most of us will qualify for premium tax credits for health insurance plans through the ACA marketplace.
  • With some planning ahead and saving for the future, it’s possible to actually get a Bronze level plan for free, provided that you reduce your MAGI enough through 401k and health savings account contributions. The amount required to achieve this for you will vary, but for me as a 30 year old male living in VA, anything below a MAGI of $26,500 will mean a free Bronze level plan due to the subsidies offered at that income level.
  • Contributing to your 401k is already a great idea, but the premium tax credits make it that much sweeter! If you’re a big saver like me and planning to transition to less travel assignments each year or part time work in the future, the combination of tax savings and health insurance premium savings from investing in your future with 401k contributions can be massive! If you aren’t currently a big saver, then maybe the savings on your health insurance premiums will encourage you to start!

What do you do for your health insurance as a travel therapist? Let us know in the comments below. If you have any questions about this or anything else travel therapy related, feel free to reach out to us. But do keep in mind that I’m not an expert in this area, and all of this information is based on reading and researching for my own situation.

If you are new to travel therapy and would like help getting started or  recruiter/travel company recommendations, then we can help with that as well! Thanks for reading!

Travel Therapist Health Insurance Options Explained

Written by: Jared Casazza, PT, DPT

It’s currently the 2019 marketplace health insurance open enrollment period, so naturally there is a lot of interest in health insurance options and alternatives right now. I’ve seen a ton of posts recently in various travel healthcare groups regarding health insurance options, alternatives, and people asking for general advice. Navigating the various health insurance options can be tough, especially with the many changes in the past decade and likely many changes to come in the future. Rising healthcare, and therefore health insurance, costs are a major concern for most Americans currently.

For travel healthcare professionals, health insurance is a particularly common topic since our contracts are generally only 13 weeks at a time, and figuring out what to do about health insurance after a contract ends can be confusing. I want to explore the various options here and hopefully give you some insight to help you make a decision regarding your own health insurance as a travel therapist.

Company Sponsored Health Insurance

Usually the cheapest and easiest option for a traveler is to take the company sponsored health insurance through the travel company that he/she is working with. The lower cost compared to other options is due to the fact that the company sponsored health insurance is partially paid for by the travel company as part of your total benefit package. The company pays a portion of your health insurance premium (in some cases 75% or more of it) so that it’s more affordable for you. If you pass up this benefit, in some cases the company will be able to give you slightly higher weekly pay based on the money they save from not having to pay for a portion of your health insurance, but this can have potential legal implications for the company if done incorrectly so it is not a common practice. We have never talked to a travel company that doesn’t offer health insurance, but it’s possible there are some small companies out there that don’t. The company would have to be very small though, because any company that employs more than 50 people is required to offer health insurance to all employees.

Most companies offer 2-3 different plans based on your individual needs. There will likely be at least a high deductible plan that offers a relatively low premium and a lower deductible plan with a higher premium. Which plan you choose depends on your own needs, but in general, those who are young, healthy and therefore unlikely to meet the deductible of either plan are better to choose a high deductible plan with the lower premiums, while those with more medical needs or perhaps growing families can often come out better with a lower deductible plan while paying the higher premiums.

In my experience, the premiums on these plans are pretty affordable no matter which plan you choose. I’ve paid anywhere from $5-$25/week for my company provided health insurance coverage over the past few years. Luckily, I rarely have any need to use the health insurance, but when I have needed it the coverage has been sufficient for my needs.

Signing up for a company sponsored plan should be very straight forward with guidance offered by your recruiter or by the benefits department of the travel company. You should be eligible to sign up for the coverage any time that you start a new contract with a company. Most companies offer health insurance benefits starting on the first day of your assignment, but some require you to wait for 30 days or until the first of the month before they take effect, so make sure to ask your recruiter about this to avoid any problems or confusion.

Affordable Care Act (ACA) Marketplace Plans

Some travelers choose to go with one of the ACA marketplace options available to them and forego the company sponsored options. The marketplace plans will almost always cost more than the employer sponsored plans and, as mentioned above, this shouldn’t be a surprise since in this scenario you will be responsible for the entire premium amount instead of having the travel company pay for a portion of it. For some, the increased cost of the plan is offset by more variety with plan options that can allow the traveler to find a health insurance plan better suited for them. Since the marketplace offers subsidies based on the individual’s income from the previous year, there are cases where the subsidy amount will be high enough to actually make these plans even more affordable than the employer sponsored coverage. I’ll cover the income levels and subsidies available in the marketplace plan in depth in another article in the near future. Since the amount of subsidy you qualify for can drastically change the amount of various plans for you, it’s always a good idea to get some quotes for potential marketplace plans even if you will likely take the employer sponsored health insurance. The vast majority of travelers will qualify for at least a partial income based subsidy due to the level of taxable income that we receive, but how big the subsidy is will depend on your Modified Adjusted Gross Income (MAGI).

Getting quotes for various plans and signing up for one through the marketplace is pretty easy. Visit the healthcare.gov website and follow the steps to get started on the homepage. I’ve spent a lot of time on the website and have found it to be user friendly. One thing to remember with these plans is that you can only enroll during the open enrollment period (November 1 – December 15) each year or when you have a “Qualifying Life Event.” This means that if you choose to forego employer sponsored health insurance and miss the open enrollment period, you could potentially have to wait until January 1st of the next year to have coverage! Make sure to watch the dates and don’t miss the November 1st – December 15th window if you choose to go this route.

“Off-Exchange” Health Insurance Plans

The above two options are by far the most common ways that regular employees and travelers alike receive their health insurance. There are a much smaller number of people that either forego company sponsored health insurance or aren’t eligible and choose to not get coverage through the marketplace. They instead may choose “off-exchange” plans, which are plans offered directly through the insurer themselves or through a broker. These options vary based on the state in which you’re located. These plans are not eligible for the subsidies offered based on income through the ACA marketplace, which will be a huge downside for most travelers and make this option unrealistic. Without the subsidies, the plans are often much higher priced than employer sponsored plans or insurance plans offered through the ACA marketplace. To partially make up for the higher price tag, these plans can occasionally offer better coverage options than those found on the marketplace.

These plans will rarely be a good choice for travelers and probably shouldn’t even be considered in most cases. If you’re interested in learning more about the “off-exchange” plans, this healthinsurance.org article is a good resource.

Health Care Sharing Ministries

Even though this option is not technically health insurance at all, I would be remiss to not include it in this list. Health Care Sharing Ministries are organizations created to share medical costs between a group of people that have the same religious views. These organizations are very careful to spell out the fact that they do not actually offer health insurance, since they do not offer any guarantee to pay. This sounds scary, but in practice, they seem to work pretty well, and most of what I’ve read about them has been positive written by those enrolled.

This is how it works: everyone enrolled in their organization has a monthly premium and a stated deductible amount, just like with a normal health insurance plan. The money is then pooled and paid out to anyone enrolled that makes a claim, after the claim is verified by the organization. They cover the same things as most insurers, although there are some things that may not be covered due to religious reasons, which can include things such as birth control pills. To be eligible to enroll in these organizations, you generally must be a Christian and be dedicated to living a Christian life, which means abstaining from activities such as smoking cigarettes, using drugs, drinking in excess, or engaging in extramarital affairs. They also generally do not allow major pre-existing conditions like the ACA marketplace plans are required to do.

Health Care Sharing Ministries offer much lower premiums for their coverage, which is largely made possible by the fact that they are able to exclude those with severe medical conditions. These organizations’ plans are also not eligible for the subsidies offered by the ACA marketplace like the “off-exchange” plans above. More people are choosing to enroll in these organizations as health insurance prices continue to increase, with estimated membership between all Health Sharing Ministries at 340,000 people.

These plans may be a viable option for travelers, especially those that aren’t eligible for any subsidies through the ACA marketplace and don’t want to take the employer sponsored coverage, assuming that the traveler meets all of the criteria and is willing to accept risk involved. For more information on Health Sharing Ministries or to compare companies, this article is a good resource.

Why Not Always Go With the Employer Sponsored Health Insurance?

Since employer sponsored coverage is often the easiest and the cheapest option, you may be wondering why a traveler would ever choose to go a different route. The two most common reasons have to do with coverage between assignments and meeting the deductibles of the health insurance plan.

For those that choose to take time off between contracts, the employer sponsored plans can sometimes prove difficult. Most travel companies will allow you to stay on their plan for somewhere between 14-30 days between contracts, but that’s only if you take your next contract with them as well. If you take more time off between contracts than the company allows, or you switch travel companies for your next assignment, then this will mean a lapse in coverage during that time. Whitney and I have found ourselves in this position a few times in the past, and going without health insurance, even for a short time, isn’t ideal. Luckily, COBRA coverage exists for this reason, but I’ve found that many travelers don’t know about it. Sometimes this causes them to choose to forego the employer sponsored plan due to these anticipated lapses in coverage.

COBRA stands for Consolidated Omnibus Budget Reconciliation Act, and it basically gives an employee the right to continue his/her employer health insurance coverage after losing his/her job (which would be the case for a traveler between contracts). This coverage can last for as long as 18 months or until the employee finds a different health insurance plan. This is perfect for a traveler who is switching companies between contracts or taking an extended period of time off of work. It is important to note that when switching to COBRA coverage, your premium will increase due to your employer no longer paying a portion of it, but the cost should still be a reasonable, especially for a short duration.

My personal favorite part about COBRA coverage is that you have 60 days after your loss of employment to sign up for the coverage, and any medical costs incurred between the date you lost your coverage and the date you sign up for COBRA will be retroactively covered. What that means in practice is that if you have a month off between contracts, and you’re switching travel companies, you could wait the 30 days between contracts to see if you have any medical expenses. If you don’t, then you can skip signing up for the COBRA coverage altogether and save the  money on the premium since you didn’t need the health insurance during that time anyway. If you happen to have a big medical expense come up during that time (not unreasonable if getting to the next assignment involves driving across the country), then you can sign up for COBRA afterward and have it retroactively cover that medical expense. This is the best of both worlds since you’re protected either way, but you only have to pay for the coverage if you actually end up needing it during that time off.

The other big reason a traveler may choose not to take the employer sponsored health insurance is that he/she plans to usually meet his/her deductible amount throughout a normal year. This can be a problem if switching between companies, because each time you leave one plan and start another, your progress toward the deductible starts over and you lose the progress you’d made toward the deductible on the old plan. For someone with a lot of medical expenses (usually a chronic medical condition requiring expensive treatment or medication), having to start over on the deductible with new plans can mean a lot more money out of pocket than the money saved by using the employer sponsored plan. In this situation, I think it makes a lot of sense to go with a plan through the ACA marketplace and keep it while traveling, instead of switching plans often through different employers.

What’s My Choice When It Comes to Insurance?

Over the past three years, Whitney and I have always chosen to go with the cheaper employer sponsored health insurance plans through the travel companies. We generally choose the highest deductible plan offered since we don’t use our insurance often anyway and would rather have a lower premium. Between contracts, we forego insurance knowing that we can sign up for COBRA as needed. So far we have never actually incurred any medical expenses between contracts to make it worth it for us to sign up for the COBRA coverage retroactively. It does give us peace of mind knowing that it’s available if we needed it though.

Although that’s been our strategy in the past while working almost continuously throughout the year, in the future we will likely sign up for a health insurance plan through the ACA marketplace. This is because we plan to take several months off at a time to travel internationally, making the employer sponsored plan + COBRA combo not nearly as appealing.

Conclusion

For the average travel therapist, going with the cheaper health insurance offered by your travel company and using COBRA coverage for any gaps between contracts probably makes the most sense financially and logistically. For some cases it can be more reasonable to sign up for a plan through the ACA marketplace and decline the coverage offered by the travel company. This is especially the case with travelers who plan to take multiple months off between contracts or that often meet their deductibles and will have to start over on the deductible each time they switch between companies. “Off-Marketplace” plans will rarely make sense for a travel therapist since most of us will qualify for subsidies through the ACA marketplace that wouldn’t be possible with an off-marketplace plan. But, these are still another option to consider based on your individual situation. Health Sharing Ministries usually offer a lower premium than insurance plans offered through the marketplace, but they are more risky since they aren’t actually health insurance and therefore don’t offer any guarantee to pay. In practice, most people enrolled in the Ministries seem to be pretty happy with the coverage based on reviews for them. The requirements to be accepted into the Health Sharing Ministry you choose can be restrictive, and anyone that isn’t a Christian isn’t allowed to join.

Hopefully this helps to clear up the health insurance options available to you as a travel therapist. Keep in mind that health insurance (and healthcare in general) is likely to go through many changes in the near future, so make sure to check that things haven’t changed between the time I wrote this and when you’re reading it. I’ll do my best to keep this up to date as well.

If you have any questions about this or anything else travel therapy related, feel free to reach out to us. If you are new to travel therapy and would like help getting started or recruiter/travel company recommendations then we can help with that as well! Thanks for reading!