Hard-to-Insure Find Novel Way to Get Coverage

[question everything]

MAY 27, 2009

Hard-to-Insure Find Novel Way to Get Coverage
Group Health Plans Available to as Few as One Employee; How to Prove You're Legit

By KELLY GREENE
WSJ

People who have lost their employer-provided health insurance because of a layoff, early retirement or other reasons are turning to a little-known strategy to get coverage: forming a small business, or using an existing one, to buy a group policy. The strategy is used by groups as small as one person, and is particularly useful for people with chronic health problems -- so-called pre-existing conditions -- that insurers refuse to cover or that result in steep premiums. Group health plans, under federal law, are required to cover such conditions, as long as the individual doesn't go uncovered for more than 63 days.

Getting group coverage isn't always simple or cheap. In fact, it may cost more than simply buying an individual policy. Rules for qualifying as a group vary from state to state, and insurers frequently slap surcharges on "groups" of just one, two or three individuals. Still, some small-business owners are discovering that they're already candidates for group coverage -- but don't realize it until an insurance agent, accountant or financial planner points out the option.

(snip)

A person, a couple or a collection of individuals generally can qualify for group coverage if they can prove they have an actual business. That can include freelance, contract or consulting work they may have been doing on the side while holding down another job. The rules, though, vary across the country. Most states allow businesses with at least two employees to form eligible groups, though they may have different rules for the number of hours a week employees must work to qualify. Some allow one of the owners or employees in a "group of two" to waive coverage, meaning a "group" could actually wind up being as small as one employee. And in about a dozen states, sole proprietors can qualify for group health-insurance coverage.

(snip)

Once you establish a legitimate business as a limited liability corporation, S corporation or other legally recognized entity -- or you at least file a tax return reflecting self-employment income -- you can shop around for quotes, typically with help from an insurance broker who specializes in employee benefits. Group coverage isn't necessarily a bargain. The smallest groups -- those with just two or three members -- often get hit with a surcharge of about 30% over what a larger group would pay... That's because the insurers "know those are businesses doing it because they are people with pre-existing conditions."

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http://online.wsj.com/article/SB124338117660756415.html (subscription)


Printed in The Wall Street Journal, page D1

[Why Syzygy]

1. DU! Group insurance plan!!!

Democraticunderground is LLC! :bounce:

[dflprincess]

2. And remember, that insurance broker who helps you shop around?

She or he will be getting a cut of every premium check you write to your insurance company. - Another expense we won't have if we go to single payer.

[Wednesdays]

3. K&R

:kick:

[Shagbark Hickory]

4. They'll jack up the rates so high the surgery will be cheaper paid in cash.