Re: benefits & highly compensated employees - Posted by Frank Chin
Posted by Frank Chin on July 31, 2003 at 05:32:27:
I still have my health insurance under the “C Corp” which has one employee, “me”.
What sparked my review of getting insurance thru the active business with 8 employees is the passage of a new law in NY that allows insurance companies to “surcharge” rates for one employee companies by as much as 20%. My insurance plan applied for the surcharge, but was rejected for the current year. They can try again next year.
I’m told that “technically”, I can go into a group of “2 to 50” for my active business as long as I can submit federal or state withholding returns documenting the number of employees. I can then enter the plan even if eventually I was the ONLY ONE signed up, as I offered the plan to everyone who turned it down. The process of offering the plan to everyone is also the satisfy the “anti discrimination” requirement of federal law.
While insurance plans are “state specific”, I know that even here in NY, the guidance from health insurance brokers vary widely. A freind of mine, a computer consultant who operates a one man company, was placed in a “union plan” because his broker didn’t know any better.
You might try checking with several brokers, and try trade associations in your area to see what’s out there.
When my frind and I compared rates, I was shocked that I was paying the same rate as he, legitimately, compared to the shady way he was done.
Having said that, finding plans for “one employee companies” is difficult, as most standard plans here are for “2 to 50”, and beyond 50 employees, the firm is big enough to negotiate a plan of its own.
In my case, my broker found an agent that negotiated plans for “one employee companies” from two insurance companies in my state, and in turn offered it to its clients through a group he organized. Two years ago, he had four plans for “one employee companies”
The agent has a WEBsite:
The group is called “ABLE”, and you’ll have to check the plans under ABLE. Also you’ll note that plans for downstate NY is quite expensive, compared to upstate, where plans cost half as much.
Keep in mine that the plans are for my area, and you’ll have to find plans for your state, and your area.
Then, other business people I know use MSA’s, with super cheap plans, not state approved, for catastrophic coverage as health insurance.
I read an article in a local paper that highligted the problem with the super cheap unregulated plans. Several business owners went to the hospital, and the plan ran out of money, and they found themselves personal liable for the hosptiable bills, running into tens of thousands of dollars.
Under the laws of NY state, health care providers are forbidden to go after patients if they are covered under “state approved insurance plans”, and if the plan runs out of money, all health insurance companies are surcharged to make up the payments, and hopitals and doctors are required to take a part payment.
This later aspect is very important to me from the “asset protection” view as I don’t want to get a super cheap unreulated plan and find myself liable for large hosptial bills.