Health insurance for self employed?

Question

My husband runs a business as a sole proprieter with his father being is only employee. I run the office side of things, but I'm not on the payroll. My husband's mother does not work, so she lives on what my husband pays his father. We want to get everyone health insurance (we have none right now). My mother & father-in-law will be covered by medicare in a couple of months but they will need supplemental for prescription drugs. Father-in-law has heart problems.

Question is....should we get a group "employer" health plan for everyone? Or should my husband and I get individual plans and just get them supplemental insurance separately?

Answer 1

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Answer 2

Depending upon the severity of your father-in-law's heart problems he may be denied any individual or short term medical policies. And $3000 per family is not unheard of with a small group with medical conditions. You should visit a local agent that works with all the major companies to see if there are any options until Medicare kicks in.

When they become eligible for Medicare they have a period where they are guaranteed to get on a Medicare Supplement or Medicare Advantage plan without any increase in premium or any denial of coverage. The cost will vary by area but in my state a supplement will run from $110 to $125 per month and a Medicare Advantage plan with drug coverage averages around $26 per month.

Also, with a small group of less than 20 Medicare will be primary so they still have to get on Medicare and pay the Part B premium in addition to the group premium.

Answer 3

Talk to the guy that does the rest of the business insurance.  That medicare/supplemental, is going to be stuff they do on their own.

With only one or two employees, any "group" plan is going to be individually rated and underwritten, so there's NO advantage to trying to do the group thing.  And the main disadvantage, of course, is that the average age of your group is going to be skewed really high, and for family plans, it might end up costing $3,000 a month or even more.

I don't think you'll be able to afford to insure your inlaws, is what I mean.  But you'll need a local, independent agent to get the coverage for you, through a company that does business in your area.

Answer 4

Mom and dad go on Medicare at age 65, NOT 62.  The least expensive for them is Medicare Advantage with little or no premium.

For you, a Health Savings Account is smart.  Ask a local agent.

Answer 5

Most states will allow you to purchase a group plan as long as you have 2 or more employees (including yourself) as long as the group is formed for a legitimate business purpose and not for the sole purposed of obtaining medical insurance.

In fact, some states will even allow groups of only one person to get a group health plan (FL is one example with their August sole proprietor plan).

The question is: "Should you purchase a group plan or an individual plan?"

A group plan will accept everyone onto coverage who applies even if they have major health problems (pre-existing conditions). Most individual plans will not.

However, an individual health insurance plan will be much much cheaper than a group plan with similar benefits. If everyone is relatively healthy then an individual plan for everyone may be the best way to go.

If you want to give benefits to your employees and pay for some of the cost (and still receive the tax benefits) then you may want to consider a medical reimbursement plan.

Either way, you will want to compare quotes from at least 3 different companies to find the best rate.

Here is some more information on self employed health insurance and medical reimbursement plans:

Answer 6

Unless you belong to some kind of trade association that will extend a group plan, you aren't a big enough operation for a group plan.  I'd suggest you check out aarp website for "gap" insurance for your in law's. They can probably provide you the names of several companies to get quotes from  for them.  Individual plans are expensive so consider high deductible plans if you and your husband are healthy and would only need it in an emergency. If you are not an employee - consider becoming one so you can apply for a small business association plan targeted for female and minority owners - you might find a bargain.  I suggest you consult an insurance professional  -one that charges an hourly fee instead of a commission. That way they don't sell you more than you need .

Answer 7

First off you can get a group plan as long as you have at least two employees. All group plans are individually underwritten it's just that on the large groups they spread out the cost so each employee pays the same rate. In your case I would just get a short term plan to cover your father and mother until they turn 65. At that time you can purchase a medicare supplement.

If you still want a group plan you could become an employee and just reduce your husbands income by the amount he is going to pay you. Then you would qualify for a group plan.

Group plans do have a place for two person groups but you need a broker to help you look at the differences

I would suggest you look at an individual  high deductible plan with a Health Savings Account to cover your family.

The group prices mentioned in the other post are way out of line and not even close. Also trade associations can't give you a group plan. Group plans have to be based on real employer groups.