Quick Insurance Tips

There are very common, very costly mistakes that self-employed people make regarding their health insurance.  Failing to investigate different options, failing to get the right deductible, failing to investigate the insurance company and failing to research your options on a regular basis can be very costly .  Avoiding these mistakes can keep you from paying to much when you are looking for medical insurance For self employed.

One mistake is in assuming that health insurance policies designed for the self employed will always give them a better rate.  Those who have one, two or three employees will often do better by purchasing separate individual or family policies.  Often, but not always, the best rate will be found through a spouse’s employer.

If you are healthy, you will almost certainly get the best rate by purchasing and individually underwritten policy.  Unlike most group insurance policies, they will look at your health history before deciding whether or not to insure you.  Because they are allowed to say “no” to those who are less healthy, they are able to give better rates to those who are healthy.

Another option to investigate is getting coverage through your spouse or domestic partner’s insurance.  Often these policies are subsidized by the employer.

You may find that only your spouse’s part of the coverage is subsidized.  If this is the case, you should take out a calculator and determine whether or not it makes sense for the whole family to be on one policy or for your spouse to have a separate policy from the rest of the family.

Another too common mistake is to fail to consider high-deductible policies.  A high deductible policy will usually have a low monthly premium.  Again you will need to do a little arithmetic to see what deductible level makes the most sense for you. If your premium goes down two dollars for every dollar that is taken away in benefits, a high deductible policy might be a good deal.

Any insurance company you are considering should be in good standing with your state’s insurance department.  Be sure that there aren’t too many complaints about the company you are considering and that they are approved to sell in your state.

The financial stability of the company is also important.  You may want to check with A.M. Best or another rating agency to make sure that the company has a good rating.  You want your company to be there when you need them to pay your claim.

Health insurance has always been subject to rapid change.  This is true today more than ever.

Health insurance prices are subject to change on a very regular basis.  You don’t want to be caught with the policy that was the best bargain two years ago.  Make sure that you look at your options once a year or at worst once every two years.

You don’t have to pay too much for health insurance or get caught with poor coverage.  To avoid paying too much or getting poor coverage, be sure to look at all your options, investigate moderate and high deductible options and investigate your insurance company.  Finally remember to look at your options again no less frequently than every two years.

Most people want their employer to offer health insurance, however if you are a business owner the benefits of employee retention and recruitment have to be weighed against the rising costs of group health insurance coverage. 

Even if you shop around and compare health insurance rates for a small business, you may find that none of the rates are affordable.  You may be forced to eliminate or reduce coverage because insurance carriers cannot keep prices down in this environment.  Doctors charge more; hospitals charge more; pharmacies charge more.  These costs have to be passed on to the insurance company. The insurance company in turn has to pass these costs along to businesses that purchase group insurance.

Insurance costs are rising faster than general inflation, wages and business income.  There is no indication that this will change in the near future.  This leads to a great deal of unpredictability and makes planning a long term budget for your company difficult.

Offering health insurance to employees in an environment where rates rise faster than your company’s income forces you to make difficult choices.  You can reduce the company’s profits and maintain your group health insurance.  You can eliminate health coverage all together and have angry employees and potentially lose key employees.  You can reduce coverage, which may have the same effect.

If you fail to offer health insurance, you may have a difficult time recruiting new employees.  However, by not offering the coverage, you may be able to offer a more competitive wage.  This may offset the competitive disadvantage of being a firm without health care benefits.

This is a win-win strategy for only a small percentage of businesses.  Employees can often purchase individual or family health insurance at a lower cost than an employer can purchase it.  Group health insurance plans in Los Angeles and in many major cities can cost much more than similar health insurance plans offered to healthy individuals.

Unfortunately this strategy is only works for healthy employees who have healthy families to insure.  Many people have preexisting medical conditions that will prevent them from finding affordable health insurance.

For those that can medically qualify for a private health insurance plan a pay boost equal to the amount your business spends on health insurance is likely to be a boon.  However, other employees may be left out in the cold and harbor resentment against the company.

Your business and your employees may benefit from eliminating group health insurance benefits and using some of the savings to increase employee wages.  This can be great thing if your employees are able to purchase medical coverage through a private insurer at a lower price. 

Unfortunately, this will only happen if all of your employees and their families are healthy enough to qualify for an underwritten private medical insurance plan.  One employee with medical issues can keep this plan from working.  This is true of new employees as well.  Therefore, having a stable workforce is also important to making this work.

In tough economic times, business owners have to make difficult decisions.  Today many business owners are choosing not to offer group health insurance to keep their costs down.  Many business are being forced to chose between losing employees or losing money by keeping their health plan.