Why Small Employers May Want To Drop Group Health Insurance to Give Employees Better Coverage!

I started this blog because I know that healthcare is important to all of us. I believe with all my heart that every American should have access to affordable, high-quality health care.  But healthcare costs consume nearly 18% of our country’s gross national product, and that percentage has been climbing steadily since World War II. It’s a far cry from when I started in the health insurance business shortly after college. At that time, the government did not play too much of a role in regulating it, but with each passing year, government continued to get more and more involved. Then, in March of 2010, President Obama signed into law the “Patient Protection Affordable Care Act.” Minor changes were implemented in the first four years of its existence, but on January 1st, 2014, the majority of its provisions went into full force. Fact is, more changed this year in health insurance than in the prior 30 years combined!

My $40,000 Kidney Stones
For most people, routine doctor visits and many prescription drugs are quite affordable. But beyond those two items, other services can quickly wipe out the bank accounts of the vast majority of us. I take good care of myself and I have been blessed with excellent health all of my adult life. However, I recently had an attack of kidney stones.  My initial emergency room visit, consisting of some drugs and a CAT scan to figure out what was causing my severe pain, set me back $8,000 on my high deductible health plan. But then, it got worse. I needed a 60 minute outpatient procedure to get the stuck stones out. I’ll spare you the painful details, but by the time I paid the doctor, the anesthesiologist, medical assistants, the hospital, and had some follow-up doctor visits, my total bill skyrocketed…to over $40,000. Ouch!

The $200,000 Chevy
To show you just what has happened to medical costs, here are some comparisons that will blow you away. When I started in the insurance business, the monthly insurance cost for a family of four for a $50 deductible plan was $40/month. That same plan today would cost a whopping $2,000 or more each month! To give you some additional perspective, here are some examples:

·       If the cost of cars had risen at that same pace, a new Chevy would cost $200,000 in today’s dollars  

·       Gas would be $26.00/gallon

·       A modest, three-bedroom home costing $350,000 at today’s price would cost $2,000,000 

The Health Premium Handoff
In the last 60 years, employers have shouldered most of the cost of providing health insurance for their employees and their families.  But most employers (especially those with less than 50 employees) have found they have had to raise deductibles and pass much of the cost off to their employees.  Since 1999, wages have gone up 50%, while employees have been asked to pay nearly 200% more for their health plan for themselves and their families. That’s a lot for employees to absorb.

It’s Counterintuitive, But Your Group Plan is Adding to the Angst!
I have made it my mission to become the most knowledgeable insurance professional in California about the Affordable Care Act as it pertains to small employers. At the beginning of 2013, I began researching the new law thoroughly, and made a shocking discovery.

I found that, by sponsoring a group health insurance plan for employees, an employer is most likely doing his or her employees a disservice!  

Group health plans for employees made complete sense before the Affordable Care Act, but the new law has turned those good intentions upside down! And once I began comparing plans, benefit-for-benefit, cost-for-cost, I found out why. In most instances, individual health plans cost less to purchase than group plans.

Under the new law, everyone can now buy an individual health plan regardless of pre-existing conditions. And having a group plan option available at work prevents employees from getting premium assistance.  That means, for the majority of California families, having a group plan option is standing in the way of families being to buy affordable coverage!

For example, an employee, age 45, with a family of four, making a combined family income of $80,000/year, would save over $12,000/year if their employer would simply cancel their group health plan.

This fact opens the door for every American to have access to high-quality, affordable health care. And in my next post, I’m going to show you more about how companies are saving tens of thousands of dollars a year in health care costs, and helping their employees save big as well.

The new health care law is the reason I have designed my company to help employers help their employees capture these significant savings.

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