We often recommend individual health plans for smaller businesses as they provide several unique advantages. While it’s not the right solution for every company, we’ve found this strategy works very well for many of our clients. The advantages include:
1. Lower costs. Obviously this is a major concern for many small businesses, especially in the current economic climate. Many people don’t realize that individual policies are almost always cheaper than group policies.
2. Increased flexibility/customization. With individual policies you are free from the “one size fits all” approach of a group health plan. Each employee can find a plan that suits their individual needs and preferences.
3. Portability. With individual plans, your employees own their plans and can keep them (minus any contribution you make, of course) if/when they leave your company. This gives greater peace of mind to them (no risk of going without coverage) and frees you from the hassles of COBRA or state continuation.
4. Defined contribution opportunity. The company can offer to contribute a defined amount to each employee’s health insurance coverage. The employee can obviously choose to contribute however much he/she wants to get their desired plan. You can even set this up on a pre-tax basis (though there is typically a setup fee to establish a pre-tax payment system). As the name suggests, a defined contribution plan allows you to dictate your costs rather than the insurance carrier.
In fairness, there are certainly a few disadvantages to utilizing individual plans instead of group coverage:
1. Underwriting issues. Unlike group coverage, at the present time an individual can be declined coverage altogether or can have pre-existing conditions excluded from coverage.
2. Maternity coverage. While maternity coverage is included in all group plans, it is nearly impossible to find a carrier that offers maternity coverage to individuals anymore.
With that said, we’d be delighted to provide you and your team with some quotes on individual health insurance options. There would be no obligation and no pressure from us. Even those who already have coverage might benefit from the opportunity to compare their coverage with other plans to see if their getting the best value. Those who are covered by spouses might also find individual plans to be a better fit for some of the reasons mentioned above.
Additionally, we could provide them with information and quotes on other services that we find many employees want or need, such as dental coverage, term life insurance, accident plans, ID theft protection, and the like. Again, our goal is not to push a bunch of products, but to help you serve your employees by offering them an array of optional benefits they can choose from.
Anyway, all that to say that if you all want or need to move away from group health insurance, we can still help you serve your employees in these important areas. Please contact AC Forrest with any questions or if you’d like to explore these things further.