The deadline to join the South Carolina Co-op is in a little over a week.
While well-intentioned, we believe doing so would be a bad idea. Really bad, actually.
We detailed some of our concerns when they first got going (most notably, the problem of “adverse selection”). The reason we think it’s a bad idea is because they require a 5-year contract of their members. So if you sign on with them for 2013, you’re roped in until 1/1/2018. If you want out, as we understand it, you will be contractually obligated to pay them anyway.
Do you know where health insurance costs will be in 2017? 2014?
Here’s the thing. It’s commonly understood that, because of all the mandates and requirements of the Affordable Care Act / Obamacare (we discussed some of this here), the price of health insurance is going up. The law mandates certain minimum levels of coverage, so you won’t have as many lower cost options.
And here’s the main point: We’re not sure that a business with 2-50 employees would want to maintain a group health insurance plan anyway.
One of the primary draw of such a plan for many small businesses is the fact that they are guaranteed to get coverage regardless of pre-existing conditions (unlike with an individual health insurance plan). This is the concept of shared or pooled risk (a concept that drives the SC Health Co-op as well). But beginning in 2014, you can accomplish that with individual health insurance policies.
Utilizing individual policies can get you out of the health insurance game completely (assuming you have fewer than 50 employees). Or we can help you set things up such that you can help your employees pay their premiums with pre-tax dollars. Either way… they’ll have the ability to customize their options and you’d have the ability to control your budget.
So why tie yourself down for 5 years when the game is changing so dramatically and unpredictably in 12 months?
What about 2013, then? We’d love to have a conversation about that. We’ve got some other interesting options we can explore. Let’s talk about it.
