Updated: May 20, 2021
By: Jacque Neat
Small business owners, with or without employees, have historically struggled to find proper representation when seeking health insurance policies. The structure of an organization and number of employees, determines available options, many of which are not affordable to the business owner or eligible employees.
Individual health insurance policies have been offered for many years; these policies are ideal for self-employed business owners and their families, as well as for those who are not offered affordable employer-sponsored plans. Prior to the ACA, applicants would answer health questions and be underwritten, much like the life insurance application process. Rates were based on pre-existing conditions, age, gender and other factors. If an applicant had pre-existing health conditions, he or she may receive increased premiums or even be declined coverage. The ACA was created to protect those with pre-existing conditions and to create a system wherein rates would not be based on gender or health conditions. At the core, the ACA legislation was intended to bring about coverage for all.
The plans available on the Health Insurance Marketplace, Healthcare.gov, must be ACA compliant, meaning plans must include maternity coverage, free preventive care, no pre-existing condition exclusions as well as other protective plan features. The rates are based on the applicant's age and geographic location. Some applicants may qualify for income-based subsidized premium. But, for many, it’s the only option and subsidies do not apply. Other insurance plans outside of the Marketplace may not include maternity coverage, may have pre-existing condition exclusions, may not cover prescription drugs or may only offer short term policies. It is important to understand what coverage you are purchasing and what exclusions a plan may have.
After years of unraveling the legislations, employers with 50 or more full time equivalent employees were mandated to offer affordable, minimum essential coverage to their employees. Businesses employing fewer than 50 employees can choose to offer employer-sponsored health insurance, but generally may not be required to do so by law. Many small businesses offer employer-sponsored health insurance to remain competitive with larger companies, finding that offering benefits is imperative to recruit and retain employees. Because small businesses lack the power of numbers that larger employers have, benefits cost them more, available plans are limited and employees typically must pay more out of pocket.
According to recent data from the Kaiser Family Foundation (KFF), about 156,199,800 Americans, or around 49 percent of the country's total population, receive employer-sponsored health insurance (also called group health insurance). 20% of the American population is covered by Medicaid; half of these recipients are children. The remaining 31% of Americans are left with the daunting task of finding affordable health insurance on their own. More than 27 million people in the United States have no form of health insurance which is especially stressful for those living with pre-existing conditions.
Most insurance carriers reimburse brokers for client consultation and service; however, in recent years, brokers have received little to no commissions for individual and small business plans, forcing them to charge fees or leave the industry all together. The very unfortunate trickle down effect has left many individuals and small business owners without proper representation in an industry full of complexities and skyrocketing costs.
My passion is assisting small business owners navigate health insurance for themselves and their employees.