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Self-Employed? Here’s a Way to Get Group Health Insurance

Health insurance is expensive. And frustrating. Especially if you’re someone who is self-employed and does not have any employees. Until recently, if you were in this boat, then you were stuck getting insurance on the individual ACA marketplace, which could be very expensive if you didn’t qualify for any subsidies. But now, thanks to a relatively new rule surrounding Association Health Plans, you have a way to get more affordable group health insurance even if you don’t employ anyone else, or are as casual and unincorporated as a handyman or tutor.

What are Association Health Plans?

Association Health Plans (AHPs) have existed for decades, and are basically a way for small businesses to get affordable healthcare. Even though they have the word “plan” in them, they are not healthcare plans. Instead, an AHP refers to a large group of small businesses and sole proprietors banding together to increase their insurance purchasing power.

The small businesses in an AHP may all be in the same industry or the same geographical location, but either way, they can use their combined size to get healthcare coverage as if they were one large employer. For an insurance company, the larger the pool of people they are insuring, the less of a risk it is – so they can charge less per person.

Once you join, AHPs function much like traditional insurance. You will get the familiar insurance card and will have access to the insurance company’s set network of healthcare providers. Premiums will be set the same way they are with all insurance plans – AHPs could, at one time, use a small group’s health status to decide how much to charge, but they are no longer allowed to do so. However, unlike ACA marketplace plans, with AHPs there are no metal tiers to choose from, and AHPs can also choose to be more flexible with their enrollment periods than ACA plans.

Working Owners

man working closely on a kitchen faucet. — *You don’t need to have a formal, incorporated business to be a “working owner”: you can do handyman work.*

Up until 2018, only small businesses that had employees were able to join AHPs. But, following an executive order signed by President Trump in 2017 (and some legal battles over new AHP rules), people now defined as “working owners” can also join AHPs. These “working owners” can also get coverage for their spouses and dependents through AHPs.

When it comes to AHPs, a “working owner” is seen as someone who is both an employer (since employers are the ones who can become members of AHPs) and an employee who can use the AHPs insurance plan. And you don’t need to have a formal, incorporated business to be a “working owner”: you can do handyman work, teach piano, drive for a ridesharing company, or tutor students in your spare time. Even if you have a regular full-time job, but don’t have health insurance, you can join an AHP based on your “side hustle.” To become a member of an AHP, you simply have to be earning money from the work you are doing and meet one of the following criteria:

Work for an average of 20 hours per week or 80 hours per month as a sole proprietor or self-employed person. You can spread these hours over multiple paid, self-employed activities
Earn as much as the cost of the plan coverage for the working owner and any other dependents added to the plan

The Disadvantage of AHPs

If you are a sole proprietor, or someone working at multiple unincorporated side jobs, and have been struggling to find affordable insurance, the possibility of being able to access group health rates can seem pretty exciting. But there are definitely critics of AHPs. Some claim that they weaken the entire ACA by drawing young, healthy people away from the marketplace, leaving older, sicker people to drive up prices.

male and female gender signs connecting at the circles — *AHP plans can base their premium rates on gender and other factors.*

But even if the stability of the ACA marketplace doesn’t worry you, you might be concerned about the main disadvantage for those getting an AHP policy: AHPs don’t always provide full coverage. Under the new rules surrounding them, AHPs are now treated like large employer policies and, as such, they do not need to follow a lot of the rules of ACA plans. The premiums may be cheaper, but the savings sometimes come at a price: large employer policies (and AHP policies) do not need to cover the ten essential benefits that ACA plans need to cover.

AHP plans can also base their premium rates on age, gender, and industry. So, in addition to worrying about whether you’re getting the coverage you need, you also need to check into how each plan is priced and make sure you’re getting the best deal.

Health insurance can seem like a wild, wild world sometimes. So much to know, so many possibilities, and so many pros and cons. While you may be going it alone in your job, you don’t need to go it alone when searching for the right plan for you. EZ.Insure is here to help and will offer you your own knowledgeable agent who can help you sort through all of the noise. We’ll get you instant quotes for free, so get started with us today. Simply enter your zip code in the bar above, or to speak with an agent directly, call 888-350-1890.

Could You Be Looking Forward to an Insurance Rebate?

When we pay for health insurance, we want to know that our money is going where it should be going. Contributing to premiums can be expensive, and until recently, we’ve had to trust that insurance companies were doing the right thing and putting those premium dollars towards getting the best care possible. Thankfully, insurance companies are now required by law to spend a certain percentage of premiums on medical costs as opposed to administrative costs. If they don’t, you will receive a medical loss ratio (MLR) rebate.

Background of the MLR Provision

a calculator and pen sitting on top a pile pf papers with numbers. — *Insurance companies are required by law to spend a certain percentage of premiums on medical costs. If they don’t, you will receive a medical loss ratio (MLR) rebate.*

Before the Affordable Care Act (ACA) was passed in 2010, insurance companies could decide for themselves how much of your premium dollars went towards medical costs and quality improvements, and how much went towards their administrative costs. If an insurance company had particularly high administrative costs, then you were stuck paying their bills and getting less in return. You had no recourse, and most likely, no way of knowing.

While some states had minimum standards before the ACA, there were no nationwide standards, and little review or enforcement. However, the ACA set a standard maximum percentage of premiums that insurance companies are allowed to put towards their own administration, marketing, and profits. Insurance companies are now also required to publicly report their percentages in each state where they operate. What’s more, if they don’t meet these standards, you can look forward to getting a MLR rebate.

The Standards

So how much of your premium dollars need to go towards actual healthcare? If you are a small employer (less than 50 people), then 80% must be spent on care and improvements. If you are a large employer, that number rises to 85%. That means that up to 20% of small group plan premiums still goes in the pockets of the insurers, but you can rest assured that it will never be more than that.

The Rebates

Insurers failing to meet the standards must pay a rebate based on a 3-year average of their financial data. While most seem to meet the requirements, many rebates have been paid out to policy holders since 2012. In 2019, insurers returned $312 million to the small group market, which broke down to an average of $1190 per employer. Most of that (93%) was given back as a lump sum. So if you do receive this money, what do you do with it?

What Do You Do with an MLR Rebate?

If you do find yourself with one of these MLR rebate checks, it is your responsibility as an employer to use it a certain way. There are a few steps you should follow when figuring out how to deal with this rebate:

Determine which plan the rebate applies to – generally, the rebate only applies to one plan that an employer has offered (such as a PPO or HDHP), and can only be given to employees who are participating in that plan.
Determine how much of the rebate relates to employer contributions vs employee contributions towards the plan’s premiums – if you are contributing to your employees’ premiums, then you can keep the same percentage of the rebate as the percentage you have contributed. The rest is considered “plan assets” and must benefit your employees. So, for example, if employees contribute 50% of the premium, then 50% of the rebate would need to be used for the benefit of plan participants.

Determine who will get the rebate – distribution of the rebate only needs to be “fair” and “reasonable.” You don’t need to spend all your time figuring out exactly how much each employee contributed and give them each an exact percentage. You can make it easy on yourself and give a flat amount to everyone. You can also decide to only give the money to current plan participants if it will cost you too much to distribute it to everyone who ever participated in the plan.
Determine how to distribute the rebate – you have four choices of ways to give the rebate to your employees:
- Cash
- Premium reductions
- An added benefit
- A premium holiday

Thanks to provisions in the ACA, you can now feel a little bit more comfortable knowing that your premium dollars are being put towards the health of you and your employees.

Anything that adds transparency to the insurance market is definitely a good thing. And so is a little bit of money back in your pocket!

Survey Says: Find Out What Benefits Employees Want

If you run a small business, odds are you’re on a tight budget. But you’re still looking to recruit and keep the best employees. So you may have to make choices when it comes to the compensation you offer your workforce. Should you pay them a little bit more? Should your benefits package be more generous?

drawing of a blue wallet with cash sitcking out of it. — *If you are on a tight budget considering ways to make employees happy, syrvets show they would prefer health insurance over more pay.*

While your first instinct might be to think most people would choose extra cash, most employees would actually choose more perks, most notably healthcare coverage. It is worth your time to ask your employees what perks are most important to them, and to survey them about their healthcare priorities.

How Valuable Are Benefits?

Consider this: various studies have been done asking employees whether they would prefer better benefits or more pay, and the results are clear. The tests might be different but the results were the same: around 80% chose benefits over money. Employees feel happier with their job and are more likely to stay (or join your team) if they are offered perks that improve their lives and make them feel valued.

Some of the things you can offer are relatively low-cost, such as more vacation time, more flexible hours, or work-from-home options. However, the most coveted benefit is also the most expensive: healthcare.

What Employees Want Most

young caucasian woman in light vlue button up with side braid and both thumbs up. — *Healthy employees who feel valued are going to be more productive and loyal.*

If your business has fewer than 50 employees, there is no law requiring you to offer group health insurance. However, studies about employee benefits also show that what workers want most is health insurance. While paid time off was an obvious second-runner up, a majority (at least 40%) said that healthcare was their top priority in all studies.

So if you’re feeling pulled in all directions financially, this is a clear indication that your money is best spent on offering a group health plan to your employees. After all, healthy employees who feel valued are going to be more productive and loyal – not to mention there are perks in it for you, too (like tax advantages).

Take the Time to Ask

As stated above, it just so happens that the most desirable benefit is also the most expensive. But there is an often overlooked way to find the best plan for your employees: a health benefits survey. If you find out what your employees’ wants and needs are, you can then find a plan that is as tailored to them as possible. You will also get more accurate pricing if you know exactly what you are looking for, and will save money by cutting out any unnecessary extras.

Making an Employee Healthcare Survey

How do you go about making a healthcare survey for your employees? The first thing to remember is that, because of HIPAA (Health Insurance Portability and Accountability Act), you cannot ask them specific questions about their health. The survey must also be anonymous. Think questions related to the type of coverage they want. Here are some examples:

paper with green checkmarks on it and lines with a pencil over it. — *Make an employee health insurance survey but make sure to not ask specific questions about their health.*

How important is it that your employer offers health insurance to you? You can then ask them to rank their answer based on a number scale or from “not important at all” to “very important”

How much would you be willing to spend each month for health insurance coverage?

Would you prefer paying more each month for insurance but paying less when you see a doctor? Or would you prefer paying less each month and more when you see a doctor? You may be able to offer them a high deductible health plan that includes a tax-advantaged HSA.

What type of network of doctors and specialists would best meet your needs? You can ask them if they would be comfortable with a smaller local network instead of a larger or even nationwide network.

Are there any doctors or hospitals that you would specifically like to be included in your healthcare network?

How many family members would you like to cover with your plan?

By taking the time to ask the simple questions above, you will have a good idea of where to start when looking for a plan to cover your employees. Offering the right benefits might seem like an expense or a headache, but it can make all the difference in finding – and keeping – the right employees. And remember, EZ.Insure is here to help you every step of the way with finding the right plan for you and your employees. We can connect you to your own personal agent who will steer you in the right direction – for free! You will never be hounded by endless calls and you will always get the most accurate information. We promise everything will be quick, easy – and did we mention, free? To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing or calling 888-998-2027.

Can Your Bottom Line Benefit From A Workplace Wellness Program?

Looking out for your employees’ health can mean looking out for your bottom line. You’ve probably heard how huge companies like Google and Microsoft offer unbelievable employee perks, including wellness programs with everything from on-site gyms, to chiropractors, and massages. You may not be able to provide your employees with “nap rooms” and in-house chefs, but you can still offer a smaller-scale version of a workplace wellness program. These programs may help you reduce healthcare costs and create a happier, more productive workplace, as long as you follow the rules laid out by the Affordable Care Act.

cigarettes on a table with a redcircle with line through it — *Workplace wellness programs help employees get healthier and offer programs to quit smoking.*

What Is a Workplace Wellness Program?

A workplace wellness program encourages employees to live healthier, fitter lives. Some insurance companies offer them, and some are completely designed by employers. It’s no secret that our country is dealing with multiple health issues like diabetes and obesity epidemics. Offering incentives for employees to look after themselves can help to keep rising healthcare costs down. These programs combine things like:

Health screenings
Programs to quit smoking
Diet and weight loss programs
Diabetes management programs
Monthly seminars

Employers can reimburse employees for gym memberships or even offer rewards like cash or reductions in their health insurance premiums.

Types of Workplace Wellness Programs

There are lots of different ways you can implement a wellness program, but generally there are two types. These are:

Participatory wellness programs – these programs are the ones that generally include seminars and health screenings offered at work, or reimbursements for gym memberships. They might not offer a reward for participation, or, if they do, employees will not have to meet any goals or conditions to get the rewards.
Health-contingent wellness programs – employees who participate in these need to meet specific goals to get their reward. They can either be activity-based or outcome-based. For example, employees could commit to walking a certain amount per week (activity-based), or employees could reach a goal of quitting smoking or reducing their BMI (outcome-based).

The second type of program is a little more controversial since they could exclude some employees who have physical limitations that would make it hard to participate. So are there rules for these programs? Yes. The Affordable Care Act (ACA) lays out guidelines for how they can be used.

Wellness Programs and the ACA

The ACA is on board with the use of workplace wellness programs: it actually created incentives for employers to use them. If an employer decides to offer a health-contingent program, employers can offer a reward that is equal to up to 30% of the total cost of medical coverage (including both employee and employer contributions). That amount goes up to 50% for programs that help employees quit smoking.

This 30% limit is one of the rules put in place by the ACA. There are other regulations, as well. For example, employers need to give an opportunity to get a reward at least once a year, and the full reward needs to be offered to everyone fairly.

This brings us to one of the main rules. In order to be fair and not discriminatory, “reasonable alternatives” have to be offered to employees who cannot participate in the same way as others because of a medical condition. Employees in an activity-based program need to be offered an alternative activity if, say, they are pregnant, ill, or have recently had surgery. And, if an employee in an outcome-based program doesn’t meet their goal, they need to be offered a way to still get their reward, perhaps by working with a health coach.

Why Have a Workplace Wellness Program?

money floating in the air. — *Insurers will offer discounts on premiums if you offer employees a wellness program.*

According to the Centers for Disease Control (CDC), almost half of all companies in the U.S. offer some type of health promotion or wellness program. There must be a reason why so many employers, large and small, are giving employees access to these programs. And there are studies that show the benefits go beyond employee satisfaction. Wellness programs can make sense financially for employers, even those running small businesses. Some of the reasons to consider one include:

Some insurance companies offer discounts on premiums for employers and employees that participate in wellness programs
Some studies claim that these programs can actually change employee behavior surrounding their health. While it’s hard to fundamentally change people, offering them education, motivation and social support (as well as concrete things like gym memberships) might help them to live healthier lives. They might quit smoking, lose weight or lower their cholesterol, all of which would lower their risks of serious health problems. And being healthier obviously means lower healthcare costs. In fact, the journal Health Affairs found that medical costs fell by $3.27 for every dollar spent on wellness programs.
Healthier employees not only have fewer costly health problems, but they may also be more productive. A study by the journal Popular Health Management found that smokers, people with unhealthy diets, people who don’t exercise, and those with chronic pain are actually less “present” at work, which could be costing employers money.
Other studies show that healthier employees miss fewer days of work. The study by Health Affairs found that absenteeism costs fell by $2.73 for each wellness dollar spent.
A workplace wellness program could help you to attract more employees, and might help you keep the ones you have. Offering extras like gym memberships or lower insurance premiums can differentiate you from other employers.

Workplace wellness programs can boost your employees’ health, make your business more productive, and help reduce your healthcare costs. Provisions in the ACA allow you to give rewards to your employees for looking out for their health, but you need to be careful about how you offer those incentives.

Should You Go for Gold?

Silver or gold? If given the option, which would you choose? You’d probably be tempted to immediately answer gold. But when it comes to group health insurance, it’s not that easy. It turns out that the group health plans known as “Silver plans” are far more popular than “Gold plans.” So when is it worth it to go for gold?

The ACA Marketplace

family of 4 in a bubble being held by caucasian hands. — *People can now go to this “marketplace” and shop for the plan that is right for them,*

The Affordable Care Act, otherwise known as the ACA or Obamacare, was signed into law in 2010. It mandated that health insurance exchanges be created in each state. It changed the way insurance worked. People can now go to this “marketplace” and shop for the plan that is right for them, choosing between different metal tiers of coverage (Bronze, Silver, Gold, and Platinum).

Under the ACA, small employers (businesses with 1- 50 employees) can also benefit from this marketplace. In the past, it could be challenging for small business owners to find multiple options for group insurance. But now they can shop around to choose between the same metal tiers as individuals can.

What is a “Metal Tier”?

Just like with individual plans, the metal tier options available to small businesses are Bronze, Silver, Gold, and Platinum. While it may sound like it, the different tiers do not indicate different levels of care.. After all, under the ACA, all plans must cover at least the 10 essential health benefits. What the metal tier actually represents is the cost-sharing split between the employee and the insurance company, meaning how much they will pay versus how much the insurance company will pay for medical care.

Employees with Bronze plans will pay the lowest monthly premiums, while those with Platinum plans will pay the highest premiums. However, premiums are not the only cost to consider: there are cost-sharing requirements, as well, including:

Deductibles – the amount you need to pay for medical care before insurance “kicks in”
Coinsurance – the percentage the insurance company will pay for services after you have met your deductible
Copays – the amount of money you are responsible for, over and above what your insurance company pays – for example, it may cost you a flat copay of $35 to visit your doctor

The metal tier offers coverage within different premiums, copays, and deductibles. Usually the silver plan is preferred.

Because Bronze plans are the lowest tier and have the lowest monthly premiums, they have the highest cost-sharing requirements, while Platinum plans, on the other hand, have the lowest out-of-pocket costs. The cost of premiums and these cost-sharing requirements varies between the metal tiers: for example, with a Bronze plan, employees will pay 40% of costs (with the insurance company paying 60%), while with a Platinum plan, the split is 10% / 90%. That being said, there is an out-of-pocket limit for every plan, which for 2020 is $8,200 for individuals and $16,400 for families. The out-of-pocket limit varies and will probably be highest for those with Bronze plans.

Silver Versus Gold Plans

The most popular plan among employers is the Silver plan, around 50% of employers choose this type of plan. Coming in second is the Gold plan, with almost 30% of employers choosing that type of plan. Leaving out Bronze plans with their high out-of-pocket costs, and Platinum plans, with their high premiums, let’s look at Silver and Gold plans.

With a Silver plan, employees will pay 30% of costs, and with a Gold plan they will pay 20%. These numbers are really dependent on how much healthcare they need throughout the year. For example, if an employee only uses their plan to see the doctor for an annual visit plus one or two other minor visits, they will be paying far less than 20% or 30%. But if they end up with a serious illness and need hospitalization or long-term care, they will be paying far more.

a pile of blocks of gold stacked on top of each other. — *Gold plans are perfect for people with chronic conditions or are in higher risk categories or have children in sports.*

It is understandable, then, that many employers choose Silver plans as a one-size-fits-all option. The premiums are lower, and you might be banking on an able-bodied, working-age group of employees who will use medical services an “average” amount. In this case, the 30% cost sharing doesn’t seem too daunting.

When to Go for Gold

If lower monthly premiums are important to you as a small business owner in order to attract employees, then Silver may be the way to go. But when is Gold worth it?

Simply stated, a Gold plan is worth it for people who expect to use their health insurance. They are perfect for people with (or who have dependents with) chronic conditions or are in higher risk categories for things like the flu – or even those with very young children or children who play sports.

Remember, because of HIPAA (Health Insurance and Portability Act), you cannot directly ask employees about any specific health conditions they may have. You can, however, send out an anonymous survey and ask your employees what they are looking for generally in a healthcare plan. You may find that they are willing to pay more for premiums in order to lower their out-of-pocket costs. If they are worried about being faced with high bills when they need care, then a gold plan might be the right option.

Remember, if you are at a loss at where to begin in choosing group health insurance, EZ.Insure can help. You can start by simply entering your zip code in the bar above to get a quote, or you can contact us by email at [email protected] or call 888-998-2027.

Peace of Mind: Offering Your Employees Cancer Insurance

It is one of the most dreaded words that someone can hear at the doctor’s office: cancer. When facing a diagnosis of this disease, a lot of people’s minds will race as they begin to worry about treatments, prognosis, and their family. But they will also, unfortunately, have to think very seriously about the financial impact of their illness. Since 1 in 2 men and 1 in 3 women will find themselves in this situation, it may make sense for you to offer cancer insurance to your employees.

The Cost of Care

While it’s hard to accurately estimate the average cost of cancer treatment, AARP puts the average cost at $150,000. Chemotherapy can run anywhere from $1,000 to $12,000 per month, radiation can cost upwards of $9,000 per month, and other treatments like immunotherapy can add $10,000 – $12,500 per month.

calculator on a table with papers with a lot of numbers and coins being pinched with wrench — *Chemotherapy can run anywhere from $1,000 to $12,000 per month, which no one can really afford.*

Eleven out of the twelve cancer drugs approved by the FDA are priced at at least $10,000 per month. Even with the typical group health insurance plan, an employee with 25% coinsurance would have to pay $2,500 for a cancer drug that costs $10,000 a month. According to the U.S. Bureau of Labor Statistics, the average monthly salary for U.S. workers is $3,600. If this is the case, then employees hit with a cancer diagnosis could be facing bills that are 70% of their monthly income.

AARP puts the estimated yearly out-of-pocket costs of cancer at around $4,000, and some groups put that number at upwards of $20,000. Unfortunately, these aren’t the only costs that those battling the disease will face. Surveys have shown that 50% of cancer patients were financially impacted by travel costs related to their disease, while a quarter cited hardships due to lost wages. All of this can lead to patients skimping on drugs, falling behind on bills, and struggling to feed their families.

How Employers Can Help: Offer Cancer Insurance

There is a way employers can offer some peace of mind to employees worried that a cancer diagnosis could upend their lives. Cancer insurance is a supplemental policy that helps cover additional expenses that aren’t covered by a typical group health insurance plan. Costs to the employee will vary by age, location, etc but on average they will pay from $8 – $100 a month on top of their normal premiums.

Types of Cancer Insurance Policies

caucasian hand holding a bubble with a stethoscope in it — *There are various cancer insurance options that you and your employees can choose from.*

There are various options that you and your employees can choose from. The main types of cancer insurance policies are:

Expense-incurred policy: a policy that pays a percentage of all covered treatments. These plans usually have a maximum dollar limit. Most of these plans require you to pay out of pocket, and will reimburse you.
Indemnity policy: similar to expense-incurred policies, except each treatment has fixed payout limits.
Lump-sum cash: with this policy, insurers will pay out a predetermined amount of cash, which can be used by the beneficiary in any way they choose.

While the first two types of policies can be helpful in mitigating the overwhelming cost of cancer treatment, a lump-sum cash policy is the most flexible, as the money can be used for anything. Other plans will cover, to varying degrees, such cancer-related costs as:

Copays and deductibles
Procedures and treatments
Doctor and hospital care
Travel and lodging
Everyday expenses (mortgage/rent, childcare, groceries, utilities)

As an employer, you may want to consider offering cancer insurance to your employees as an add-on benefit. Employees who feel they are at higher risk of being diagnosed with the disease, or have families dependent on their salaries, will appreciate being given the choice to expand their coverage.

It is also important to remember that cancer costs working age adults $94 billion a year in lost wages, and cancer patients are 2.5 times more likely to declare bankruptcy as healthy people. It makes sense to offer protection to your workforce, especially since cancer insurance is relatively affordable as compared to other types of benefits.

If you need help with any aspect of offering health insurance benefits to your employees, EZ.Insure can help. Whether it be questions on what plan will work for your company, how much plans are in your area, or how to compare plans, we can do it all for you . Call 888-998-2027 to speak directly with one of our agents, or enter your zip code in the bar above to get free instant quotes. We will never sell your information to telemarketers as others do.

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