THE BLOG
11/13/2016 11:35 am ET

Small Biz Health Insurance Deal Beats Obamacare

If you're one of the millions of Americans unhappy with your choices and prices this year under Obamacare, there is a possible alternative that could give you the same kind of top-flight healthcare plan offered by many businesses to their employees - with a wide choice of physicians and hospitals, and excellent prescription benefits.

That's because of a little-known "quirk" in the Affordable Care Act that allows small businesses a chance to offer employees - even if as few as one employee enrolls - a job -based plan that is equivalent to the best deals offered by major insurers.

This Special Enrollment Period or SEP occurs each year from November 15th through December 15th, for coverage to start on January 1 of the following year. All insurance companies offering coverage on or off the marketplace agree to accept all small businesses that apply for coverage during this SEP. That means major insurers like Blue Cross Blue Shield and Humana, among others, must accept even small businesses that might have just one employee!

In many cases, the small business plans offer better benefits and lower costs than plans available to individuals on the Obamacare exchanges - especially now that many insurers have dropped out of the state exchanges, or raised prices and limited participating providers.

The concept is attractive to business owners, because they do not have to contribute to the cost of employees' healthcare. Instead, the employee pays the premiums - on a pre-tax basis, lowering the true cost of paying for this healthcare policy. And, because the premium cost is an employee deduction, the business owner saves on payroll taxes.

Best of all, because this small business incentive program is part of the Affordable Care Act, there is no impact on cost or acceptance because an employee may have pre-existing medical conditions.

Before you think about "creating" a small business this month to take advantage of this offer, be aware that the government will be checking that the business is truly in existence. But even if only one employee of a small business enrolls in the health insurance plan, the coverage must be accepted by the insurer.

The plan chosen by the business may not be attractive to all the employees. For example, if an employee with a low income decides that the Obamacare exchange plans, including subsidies, will cost him or her less than the company's plan, the employee can buy one of those exchange plans. Remaining employees - even if only one -- can get the small business plan.

How do you find these small business plans? You'll likely have to go through an insurance broker.
Allen Wishner of Flexible Benefit Service Corporation (www.FlexibleBenefit.com) works with thousands of brokers helping their small business clients set up health insurance plans. And there's a year-end crunch, Wishner says, because business owners are suddenly facing unacceptable choices on the insurance exchanges.

One of those brokers, The Health Insurance Shoppe , (www.TheHealthInsuranceShoppe.com) located in Chicago, has registered insurance agents that will help business owners find a plan, and identify employees that might be better off with the subsidized exchange plans. Business owners know that they might be the only one covered under the plan - and still qualify for the small business deal created by the Affordable Care Act.

Since each state offers different "exchange" plans, you must consult with a health insurance broker in your state to find out your options. But hurry. The December 15th deadline is looming. It takes some time to process your application. That's The Savage Truth.

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