Work as a contractor for my current employer rather than become a full time employee after my graduation for health insurance continued coverage
There are several assumptions you made, that don't match the current laws: Costs: COBRA:
"Here's an alternative. There are hundreds, maybe thousands, of contract engineering firms (""job shops"") in the United States, probably hundreds in California alone.  They are in the business of doing what your ""employer"" wants you to do, they know how to do it, they have been doing it for decades, working with the biggest, most-established companies in the country.  They have forgotten more about providing engineering services to clients, and paying the engineers, than you can learn in a lifetime. Call a few of them.  Set up meetings.  Budget a few hours for it.  You want to talk with the most experienced recruiter in the office, the Old Guy Who Has Been There And Done That.  Explain your situation, and tell them that, rather than go through all of the headaches yourself, you want to investigate the possibility of THEM handling all the headaches, for their usual markup of course.  (You can probably word this better than I can, but you get the idea.) The shop may or may not be willing to talk about their markup.  My personal opinion is that this is perfectly OK.  What they make off of you, after your rate is paid, is THEIR business. Also, talk about what you do, and your recommended rate.  It would not surprise me to learn that you are currently grossly underpaid. AND, mention that, if the client declines, you're going to be available immediately, and you'd certainly be open to working with them.  (You will see this again.)  In fact, if they have any current leads that you fit, you would certainly be interested in hearing about them.  (They may already have a req from another client, for which you fit, for which the client is willing to pay much more than your current ""employer"".) If it were me, personally, I'd start with Yoh, Belcan, and maybe TAD Technical.  These are three of the oldest and best. I'd also hit up CE Weekly, get a subscription, and find some other shops with offices in your area. Once you have a shop lined up, then ask your ""employer"" if, rather than you setting up a personal corporation, they'd be willing to work with an established Contract Engineering firm,  who does this kind of thing for a living, who does this every day, who has been doing this for decades.  Doing this is simpler for everyone, and, by going through an established firm, they avoid having to teach you how to do business with them.  They also avoid the risk of having you reclassified by IRS as an employee, which exposes them to all kinds of legal and financial liability. If they say ""No"", WALK AWAY FROM THEM.  Immediately.  They've just thrown up a HUGE red flag.  This is where the other discussions with the shop come into play." "It's a tough question, because there is society and individual to consider, and the society's effects on the individual.  Currently, employers don't have to provide insurance, they do it to compete in the employee marketplace. Employers have an advantage over employees in that regard, because they can procure insurance at a lower cost that employees can, and they get tax breaks for doing so. Employers providing health insurance get a more stable relationship with their employees, because employees always hold great value in having an employee who provides good benefits.  The company I work for provides good benefits, but suppose tomorrow they told me ""Hey Mutatron, we're not providing benefits anymore, but we'll bump your salary to what your benefits are worth, plus enough to compensate for the tax break we get."" So now, everything is equal to what it was before, but I have to go out and find my own insurance, which is a hassle, but presumably because of the PPACA I can get a good value and carry this insurance with me wherever I go, and never have to mess with changing every time I change jobs.  But suppose all the employers do this, so now there are no employer-provided health plans, and ten or twenty years down the line they've all just taken advantage so that wages haven't kept up and they've essentially pocketed the difference, or passed it on to their customers. Now people have less money to buy health insurance, and those near the bottom will now have to rely on the government to assist with providing health insurance.  This is the way it works now with the minimum wage. A recent report found that WalMart employees rely on welfare to the tune of [$2.66 billion a year](http://www.dailykos.com/story/2012/10/10/1141724/-Walmart-fuels-inequality-epidemic-taking-advantage-of-our-safety-net), while the company makes $15 billion in profit. So 18% of Walmart's profits are an indirect subsidy from the US taxpayer, which comes to about $48 per US citizen, or about $208 a year for the top 50% of wage earners.  Even so, I think I'd prefer to get my whole compensation package in one shot, all else being equal. That last part is important, though, I would need to get all the breaks my employer gets for providing myself with health insurance." Software Contractors are not employees of the company that is procuring the software. Software Contractors necessarily work for another legal business entity. There is a business to business relationship between the procurer of the software and the entity producing the software. Therefore, the company procuring the software is not required to pay a minimum wage, or adhere to any other employment law. When any individual or company orders a software product and agrees to pay for it, that is a fixed priced contract. This happens millions of times a day. The amount of time taken to produce the software has no direct bearing on price. For instance, there is no minimum price for Microsoft Word based on the number of hours taken to produce it. Generally a Software Contractor will be a director and shareholder of a limited liability corporation. Directors are exempt from the standard protection offered under employment law. If the company producing the software was employing non-directors to produce the software, rather than sub-contracting to another business then employment law would apply. "&gt; Interests change. So do careers.   Of course. A janitor can become a landscaper, a teacher with teaching diplomas can end up as an accountant, an actor can become a great president of the USA (Ronald Reagan) and a business man can also become a great president of the USA (Trump!)  However, do you understand that Information Security is a highly specialized technical engineering field that requires tons of specific knowledge and understanding of technologies, protocols, cryptography, database, etc, etc, etc?  There's no way that Ronald Reagan, Trump or Susan can become a Chief Info Security officer, medical surgeon, rocket scientist, or even a Rabbi. Am I right?   These professions require many many years of specialized studies, residency/apprenticeship to get experience and dedication from the start to a life-long narrow and specialized field.  You don't need to be brilliant with specialized knowledge to be an accountant, actor, president of the USA, janitor or even a ""Vice president of sales"".  &gt; Undergrad is meaningless at that level and point in career.  This is not the point, and I said it already 18 times: I will hire a music major if they have the experience and knowledge needed for an unrelated job.  There's almost zero chances the Music major or Fashion major is the type to be an expert in security, so knowledgeable as to become the CHIEF Information Security Officer.  **And, again, based on the recent interview with Susan and her answers, anybody, even non-experts, can tell she has no clue about security.**  &gt;&gt; I also never agreed that she got the job due to connections:  &gt; So give me a possible way how Susan got her job.  Can you answer and guess the answer?  As for HR and contractors:  &gt;  Contractors give flexibility to staff up for projects and down again as conditions dictate, and are paid higher rates to compensate for the impermanence.  If contractors are more expensive than in-house employees, nobody will use contractors.  Trust me!!!! I also have to hire and work with contractors, in IT, where they really get paid well. They get ZERO benefits, ZERO bonuses, ZERO security, and many in-house employees in similar jobs, per-hour, get paid much more if you account their bonus, medical insurance, facilities, severance packages, training, etc, etc." One thing to look into is if there is an extra fee for covering a spouse under you plan, if she is covered under her own employer's plan.  I know that my wife's company charges around $100-$200 a year if I was to be covered under her plan, since I am eligible for the coverage where I work. As far as tax issues, there shouldn't be any.  I think the choice comes down to the coverage offered by both plans. I would not assume they would pay for any benefits. You will be responsible for paying entirely for health insurance and social security and Medicare. This move is most likely not in your best interests. At a minimum, I would charge double your current hourly rate and would charge for all hours worked including time and half for overtime.  3 times is actually probably a better choice if you want to cover holidays (which they will not pay you for), vacation time, etc. I know when I did project bids, we always priced at 2-3 times the salary we paid the employees. Do you have a clue of what would of happened to you if you had some serious condition and at some point you lost your job? Insurers would deny you insurance because of pre-existing conditions, and you would be left out to dry.   Now maybe you aren't as unfortunate as having a serious health condition, but no new bill will make everything better for everyone. Healthcare for the employee is more valuable to the employer than is providing healthcare for the rest of the family members.  Depending on the family situation, you're going to see significant differences in price between out of pocket costs for insurance of just the employee, vs cost for insuring the entire family.  This is because in the first instance the insurance is more subsidized by the company (as a percentage of the total cost).   The costs to the company for insuring just the individual (mid-career) are in the neighborhood of $5000 per year.  If this is all that's being negotiated (single person coverage) then I would use that amount as a baseline.