Small-Business Owners Have Broader Health Care Choices

Small-business owners might have more options than they did several years ago to offer more affordable health coverage to workers, the Wall Street Journal reports.

Not-for-profit agencies and lawmakers "have paved the way" for employers to combine their finances to purchase cooperative plans, while some states such California, Massachusetts and Pennsylvania now provide subsidies and credits to employers that offer health care or charge penalties to businesses that do not, according to the Journal.

The Journal examines four coverage options that small-business owners "might find feasible":

• Cooperative coverage plans, which allow small businesses to band together to receive reduced rates when purchasing health insurance.
  HealthPass, a cooperative in New York state, reduces the administrative burden on employers and offers access to more than 30 coverage choices from four coverage providers that pay for the costs.
• Group coverage for independent contractors that are affiliated with larger employers. Some contractors might be able to buy into the parent company's group plan, which often offers less-costly coverage. According to the Journal, "group rates can be found in less obvious places, too," such as Costco Wholesale, which in some states offers small businesses health care and dental care coverage programs at lower premiums if the companies purchase an executive membership for about $100 annually.
• Enlisting the help of insurance agents, who might be able to help small-business owners sift through options. Services from agents often are offered at no charge because they are paid by insurance companies. Agents often propose "employee-elect arrangements," which offer small businesses a range of insurance coverage plans and provide employees that require less coverage with less-costly plans, the Journal reports. According to the Journal, under such an arrangement, employers typically pay 75% to 80% of the cost of coverage, while the employees pay the remaining cost and any upgrades.
• Consumer-directed health plans, which include a high-deductible plan in combination with a health savings account or health reimbursement arrangement. Under such plans, workers can invest money set aside for health care in mutual funds and withdraw the funds tax-free (Badal, Wall Street Journal, 11/26).