*This blog contains new information as of Nov. 1*
The individual health insurance market, the place where many self-employed individuals purchase medical insurance is — candidly — a mess. Many Land Stewardship Project members are adversely affected by the current state of this market: premiums exploding, coverage choices dwindling, provider networks shrinking. What are the options?
Small Group Insurance Market May be an Option
In the current marketplace, if your business (farm or non-farm) is incorporated and domiciled in Minnesota, with between one and 50 employees/partners/owners, you can purchase your insurance as a small group rather than an individual plan.
There are several advantages to using the small group market in 2017:
• Less expensive: Many group plans are running about 25 percent less in cost than comparable new individual policies.
• Broader networks: Group plans include larger networks of doctors, hospitals and clinics that are covered.
• More plan choices: Group plans provide more options, from low-deductible co-pay plans to high-deductible health savings account (HSA)-eligible plans.
For my wife and I, our plan is more than $400 cheaper per month by enrolling as a group through my business, rather than via an individual contract.
Eligibility for a Small Group Plan
To qualify for a small group plan, you must either be incorporated as a business or have an employee who receives a W2 (20 hours/week average).
Preferred One will allow an incorporated business to buy a small group plan, even if there is only one person in the group. They are the most flexible in getting coverage — except in southeastern Minnesota (see below).
*Update as of Nov. 1: In southeastern Minnesota, Medica is allowing single-person small group plans, with criteria just like Preferred One.
Health Partners is a good choice for a couple, but one spouse has to be the “owner” of the business and the other take W2 income from the business.
Specifics for Different Carriers:
• Preferred One: If you are an LLC, S Corp, or C Corp, you can purchase a group plan as a 1-person group through Preferred One. You must have been incorporated for at least six months. One important item, though: Preferred One does not write new company contracts if you domicile in the southeastern part of Minnesota.
For you sole proprietors, if you incorporate by Nov. 1, 2016, you would be able to change to a small group plan May 1, 2017. A rough estimate of the cost for incorporating as an LLC is $750 for the legal work and filing fees.
• Medica: Medica is writing 1-person groups in southeastern Minnesota. The criteria is the same as with Preferred One -- you must be incorporated as a business, and you can get on a small-group plan after you have been incorporated for 6 months.
• HealthPartners: There needs to be at least two eligible people for a small group contract with HealthPartners. A married couple can get a group plan if one is the owner, and one is taking W2 income. A parent farm owner with a son/daughter working the farm as an employee could also be a valid group, for instance (provided the employee is covered). HealthPartners will write small group contracts statewide (even though they have stopped selling individual plans outside the Twin Cities metro area).
• Blue Cross and Blue Shield (BCBS): BCBS will not write a married couple, even if they both work in the business. They will write if there is a non-spouse employee, and again, the employee needs to be covered. Also, they will write if there is a bona fide partnership between two or more people who are not spouses.
A small group plan will not be an option for everyone, but it may help some LSP members. Self-employed people who are not incorporated or do not have an employee will have to look at the MinnesotaCare program or a subsidy through MNsure, if you qualify (information on guidelines for those options here). If you do not qualify, then I’m afraid you are getting hit very hard.
As you look for a new insurance plan, I recommend working with an agent who is familiar with small business benefits and is licensed with all four insurance carriers to help you find the best option. Many agents who do mostly property/casualty insurance and not employee benefits insurance might not be familiar with every detail. Ask other small business folks for a referral.
Hopefully you find this information useful. To be fair and disclose fully, I have been the insurance agent assisting with the benefits for LSP employees since the organization started. My wife and I have been staunch supporters of LSP since the beginning. I wanted to share this information for the benefit of fellow members of LSP, and I am happy to talk with you if I can help with your situation. I can be reached at firstname.lastname@example.org or 651-738-1197.
Charlie Prokop is the President of CSP & Associates, Inc., in Lake Elmo, Minn.