Many Business Owners Overpaying for Health Insurance by 40% - 60% (Small Business)

Written by Peg Reid.

Robert Slayton, of Robert Slayton & Associates, Naperville, reports, “My small business clients regularly report premium savings of 40-60%.”  For the same or better plan.  With additional savings and benefits to the business.

How do I save 40% - 60% on my Health Insurance Premiums?

His small business owner clients opened up a group health insurance plan.

Along with the lower premiums, small employee groups enjoy more choices, better choices and broader networks. 

If You’ve Ever Run Into one of these Problems? The Solution is Simple.

• ·         My employee said she would have to resign so she could get a job with health benefits.
• ·         I make too much to get a subsidy so my premiums are outrageous.
• ·         My employee would prefer to work for me full-time (and I’d love to have him) but he has to keep his other job because it offers a health plan.
• ·         My personal premiums are more than my mortgage payment!
• ·         My wife can’t see her doctor at Northwestern without being in an HMO (we want a PPO) with a PCP out of Winfield or St Charles.  We live in the city, a few blocks from Northwestern!
• ·         My twenty years of mammogram films are at Rush and now I have to go to someone who doesn’t know my history.

Can’t See Your Doctor? Can’t Go to the Hospital of Your Choice?

Were you frustrated that you couldn’t get access to the providers you wanted?  Small group PPO options include hospital systems such as Northwestern Medicine and NorthShore University Health System not widely available in the individual market or in the case of Rush University Medical Center, not at all. 

I Thought I Couldn’t Qualify?

The old rules around plan sponsorship which had caused small business owners to reject the idea out of hand have become more accommodating.   Participation requirements have largely been eliminated; businesses with as few as one employee are eligible with certain carriers, even if only the owner opts into the plan.  In a few cases, businesses with no employees can qualify to open a plan.  And the contribution requirement (which varies by carrier) is often dwarfed by the small business owner’s personal savings, savings to the business and gain in competitive advantage.  Corporation, S-Corp, LLC or sole proprietor can all be eligible.

Slayton himself was on an individual family health insurance plan paying $880/month.  His renewal was $1543/month - over $600/month more for the same coverage.  He opened a small group health insurance plan for his business covering only his family (his two employees aren't eligible as part-timers but even if they were, they would have waived group coverage as they have their own coverage) and the new cost was $839/month – less than his 2016 cost!  If he had wanted the larger network that included all of the doctors and hospitals, it would have been $1100/month, still significantly less than his current plan renewal.

I Thought I could only sign up during open enrollment?

You can start a group health plan at any time during the year.  You and your employees can drop your current plan if the group plan makes more sense.  The best part is that when you are looking for quality hires, you will be on a more level playing field with larger companies when it comes to recruitment and retention.   If you start your plan May 1^st, your rates are fixed until May of next year.  If you decide not to renew the plan next year, you will qualify for a special enrollment to return to individual coverage.

Contact Peg Reid at peg@slaytonins.com, 630-779-1144 x103, for a worksheet to estimate your savings. If Peg is out of the office, contact Robert Slayton at x101

2015 Cost-Sharing Limits for ACA Compliant Plans

Below is from BCBS of Illinois. Note the link to the final rule. Also note that if the health insurance provider cannot meet the Medal requirements (for Bronze, Silver, Gold) with such a low deductible, then they are allowed to make it higher than the limit. This is what we are seeing in the market today.

From BCBS of Illinois

Legislative Update 
2015 Cost-Sharing Limits

The U.S. Department of Health and Human Services’ Notice of Benefit and Payment Parameters for 2015 final rule set the following cost-sharing parameters for 2015.

• Out-of-pocket Maximum: The maximum annual limit on cost sharing will be $6,600 for self-only coverage and$13,200 for family coverage. As a reminder, if a plan is non-grandfathered, out-of-pocket member expenses for in-network essential health benefits (EHBs) cannot exceed these out-of-pocket limits.

• Deductible Limit for Small Groups (1-50): The maximum annual limit on small group deductibles will be$2,050 for self-only coverage and $4,100 for family coverage. As a reminder, non-grandfathered small group plans must cap deductibles for in-network EHBs at these amounts.

• Pediatric Dental Coverage: Stand-alone pediatric dental plans covering pediatric dental EHBs will have cost-sharing limits of $350 for coverage of one child and $700 for coverage of two or more children.

This communication is intended for informational purposes only. It is not intended to provide, does not constitute, and cannot be relied upon as legal, tax or compliance advice. The information contained in this communication is subject to change based on future regulation and guidance.