My partner's son-in-law is beginning to work for him (and us) full time remodling and rehabbing houses, having just quit his day job. He and his wife are in their 20s and have a 1-year old baby. I'm trying to figure out the most affordable way to get health insurance for his family. (It might also be the case that we need to get insurance of our own next year, so I'm curious about this subject for that reason as well.)

We have at least two decisions: first, could either have him get his own contractor's license and get his own small business insurance, or insure him under our business. And second, we'd need to decide which company would best insure him using one of those methods.


I have a quote from Costco's Executive membership insurance plan which would give respectable coverage at $350 a month for his whole family (see benefits list below.) Not being very familiar with this area, I'm not certain how good a deal it is...

What all do you think?

Have you had good experiences getting health insurance with any particular companies? (What about Dental?)

Any web sites that you'd recommend on this subject?

There was one thread here at http://fatwallet.com/forums/messageview.cfm?catid=52&threadid=219812 on "tips", but that's all I could find..


Costco plan details run as follows (this is for the Spokane area only):

Lifetime Maximum $1,000,000 per person

Annual Deductible $500 (Family max 3x individual)

Out-of Pocket Maximum (calendar year) $3000 (Family max 3x individual)


After the applicable copay/deductible is satisfied, and any applicable referral pre-authorization requirements are met, benefits will be paid as follows:

Hospital Inpatient Semi-Private Room and Board, ICU, CCU & other Special Care Units, Ancillary Hospital Services 80%

Maternity Care Covered as any other medical condition

Emergency Room Service $100 copay per visit; waived if admitted to hospital

Hospital Outpatient/ Ambulatory Surgery 80%

Physician's Services

Office Visits $25 copay per visit

Second Opinions $25 copay per visit

Physicians Hospital 90%

Laboratory, Radiology & X-ray (Includes Mammography) 90%

Preventive Care

Routine Well Adult/Child Care $25 copay per visit

Pediatric and Adult Immunizations 90%

Mental Health Care

Inpatient care: 7 days per calendar year 50%

Outpatient care: 12 visits per calendar year 50%

Chemical Dependency Maximum benefit per 24 consecutive month period is $11,285 for inpatient and outpatient combined

Inpatient Care 50%

Outpatient Care 50%

Prescription Drug Benefit Supply Level 30-day Costco and Other Plan Pharmacy

Generic $20 copay

Preferred Brand-Name $30 copay

Non-preferred Brand Name 50%

Prescription Drug Benefit Supply Level 90-day supply at Costco only

Generic $40 copay

Preferred Brand-Name $60 copay

Non-preferred Brand Name 50%

I happen to have alot of consumer info on this subject since I have been buying my own for many years. I have more than I posted here, but it is a good start for everyone.

Here are some multiple-insurance company sites for cross-comparison;

site 1
site 2
dental ins

Here is a form I use to shop for this. I print this out on a sepate sheet for each ins. co. and the fill out line by line for each quote;

Individual major medical PPO- no HMO, no hosp/surg only, no short term, no ob
Rating AM BEST
Deductable
Co-ins=(x% plan pay/x% we pay up to $x)
Maximum Out-of-Pocket $ incl deductable
Co-ins for nonPPO use=%
Office visit, lab Copay- no #visit limits
Outpatient Pharmacy card Copay=$ generic/$ formulary brand/$ nonformulary
Lifetime Benefit Maximum
Wellness=incl.physicals, mammo,paps?
Exceptions-like no transplants/ open heart?
Worldwide use?
PPO Network name
Physical exam required?
Cost per month
Administrative fee per month
Application fee
Life ins necessary?
Billing monthly or discount for annual
Rate Guarantee time
PreExisting condition exemption time

Next, here is an article I found years ago explaining the mess. I don't remember where I got it.

Shopping for Individual Health Insurance

If you live in the wrong state, have any type of illness, or are too young for Medicare, too rich for Medicaid, or too broke to pay steep premiums, you might be shut out of the health-insurance market. None of those factors will stop you from getting group health insurance through most employers, but they can entrap those who buy their own policies. This group includes the self-employed and people who retire early and lose their group health coverage before they're 65 and old enough for Medicare. If you need to buy your own individual or family policy, you're entering a perilous market in which good advice is scarce.

Needing to buy your own health insurance makes you one of the unwanted children of the insurance marketplace. In employer group policies, healthy and sick people are mixed in the same pool, and premiums paid by healthy people help cover the claims of those who are ill. But with individual insurance, there's no one to subsidize those who need care. As a result, insurers say that even high premiums are often insufficient to cover the cost of care when policyholders get sick.

The good deals often vanish when people get sick or injured and begin to file claims.
These strategies create traps for consumers, who may have to struggle to stay insured.

NO COVERAGE FOR EXISTING ILLNESS
Individual insurance may not be available if you are sick.
Most individual policies are medically underwritten. That means carriers look closely at an applicant's medical record and turn down people whose conditions pose too much risk. Most companies deny coverage to people with serious conditions such as cancer, diabetes, coronary artery disease, or multiple sclerosis. But they may also turn down applicants with ailments like hay fever and ear infections. To underwriters, covering people with medical problems is like insuring a burning house.
One way to do that and keep the premiums lower is to exclude coverage for conditions people already have. They also examine the prescription medications applicants take. If their drug expenses are as high as the premium, they are denied coverage.
When a company does accept a person with medical conditions, chances are it will exclude coverage for those illnesses through a waiver or a rider. If you have asthma, for example, a carrier may exclude coverage for that disease, or for all lung conditions, or for the whole respiratory system. Unlike the more familiar pre-existing conditions clauses for new members of group insurance policies, which often exclude coverage for three or six months, these waivers are usually permanent. There is no coverage for as long as you hold the policy.
Sometimes insurance companies will add a surcharge for insuring a person with potentially expensive conditions. In insurance jargon, this is called rating up and may increase premiums by 20 to 100 percent. If you're overweight, an insurance company might rate you up. The more overweight and outside the norms of the height-and-weight chart, the higher the surcharge.

GAPS IN STATE REGULATION
Some insurance companies sell health policies that appear to be group coverage when in fact they are not. Carriers set up a master policy under what's called a group discretionary trust, in a state that has little or no regulation over the types of policies that can be sold. The carriers then go into other states and sell health coverage, but the policies are governed by the regulations--or lack of them--in the state that holds the master policy. Legitimate associations, including professional societies, are not set up only to sell insurance.
Some insurers also use associations as a device to escape rate regulations. These policies give the appearance of being a group product, but in reality they are individual products. The only place you hear about them is in your insurance agent's office.
Many of these associations take on the appearance of legitimate groups by offering discounts, newsletters, and other benefits. Sometimes it's hard for consumers to separate real associations from phony ones.
Consumers get into trouble with some association policies when they become ill. Here's what happens: A company offers an attractively priced association policy to entice the cream of the individual market--healthier people who are not likely to generate expensive medical claims. But once policyholders start filing claims, some companies may selectively target them for individual rate increases, a practice called reunderwriting, or they may raise rates for everyone who has the same policy.
When premiums rise, policyholders who are healthy find other, less expensive coverage. For sick people left with the old policy, what insurance companies call a "death spiral" may begin: Premiums climb until policyholders are forced to drop coverage, or until the insurer cancels the policy. Those sick policyholders may have no options. Individual coverage is a one-shot deal, if your health deteriorates, you can't get it again.

UNDERFINANCED RISK POOLS
Nearly 150,000 Americans get health insurance through their state's high-risk pool--the only place where those in the worst health can find a policy. In the 29 states that have such pools, the trick is getting in.
Risk-pool applicants must usually have at least one--sometimes two--rejection letters from a regular insurance carrier in the state. In some states you can qualify if a regular market carrier offers a policy with a premium that is higher than what you would pay in the risk pool.
Some risk pools also take people who have been offered insurance policies with exclusion riders that limit their coverage.
If you qualify for a risk-pool policy, you usually have to wait six months to be covered for a pre-existing medical condition. In some states the wait can be as long as a year.
Some risk-pool policies have low lifetime limits--the maximum a policy will pay over a policyholder's life.
Policies may also have low annual maximums. In California's pool, it's $75,000. Someone with a single severe illness or several serious chronic conditions could easily run out of coverage.
But for many people, the biggest problem is the cost of the premium. The pool is not designed to be an affordable program.
Some pools cap enrollment, creating waiting lists for those who need this insurance. California's pool had a waiting list of 7,000.
Lack of money is at the root of the high cost and restrictive coverage of risk-pool policies. Even though policyholders pay high premiums, those premiums don't cover the cost of insuring the very sick people who are in the pool. So pools must rely on additional money from general tax revenues, taxes assessed on insurance companies, a tobacco-products surtax, or special funds such as the tobacco settlement. In most state legislatures, it's a struggle to get additional money.

FALLING THROUGH THE CRACKS
When Congress passed the Health Insurance Portability and Accountability Act (HIPAA) in 1996, it mandated that all states provide a place of last resort for people to buy health insurance--a kind of safety net for people seeking coverage. HIPAA did not, however, come close to solving the problems people face and essentially left a dismal marketplace unchanged. The law did not ensure, for example, that everyone needing health insurance could get a policy regardless of health status. HIPAA set minimum standards for providing coverage of last resort, but it let each state devise its own rules. The result has been a hodgepodge of regulations that differ from state to state and provide varying levels of assistance for consumers.
Only 11 states and the District of Columbia guarantee all residents the right to buy health insurance no matter how sick they are. Twenty-two states guarantee a policy to residents who are uninsurable simply because of their health, as well as to people who have satisfied HIPAA's complex rules. That means they must have left a group plan, paid their own premiums for COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage, and applied for new coverage within 63 days after leaving the group plan.
The most restrictive states--such as Alabama, Arizona, Delaware, and West Virginia--permit only residents who have satisfied HIPAA requirements to buy what is called a guaranteed-issue policy, that is, a policy you can buy regardless of any medical condition you have.
Several states limit the amount carriers can charge for policies of last resort, but even these limits produce some very expensive policies, which can be as much as twice the average rates charged by carriers in the state. So if you qualify for a guaranteed-issue policy, you may find the premiums out of reach.

Shopping for your own policy
There is no national standard for coverage and premiums vary widely in the individual market. Most states impose only minimal regulation on benefits and premiums. Individual policies are also underwritten, meaning that premiums vary according to an applicant's health status, age, and gender.
Exclusions and limitations are common in individual policies. Most policies offer no coverage for prescription drugs. Many do not cover maternity care, mental-health conditions, or substance abuse. Some policies require large amounts of cost sharing: high deductibles, co-insurance, and co-payments.
Paying more doesn't always buy more. Some very expensive policies had far lower coverage indexes than those with cheaper premiums.
Premiums go up as you get older because medical costs tend to increase as you age. In many cases the steepest rate increases occur at older ages. Premiums also rise because health care is more expensive each year. Annual rate increases of 25 percent or more are not uncommon for these policies.
RECOMMENDATIONS
To buy your own health-insurance policy, begin by investigating those sold by at least four or five carriers in your area. Interview agents and find one who offers policies from several different companies. An agent can help determine whether you're likely to pass the insurer's underwriting requirements. Document in writing your communication with any agent or company in case of future disputes.

First consider the policies sold by the local Blue Cross Blue Shield organizations in your area. They tend to offer the most coverage for the premium you will pay.

If you are a member of a legitimate association that offers insurance, it may be worthwhile to consider its policies. But if you can buy a particular company's policy only by joining an association set up for the purpose of selling insurance, be aware that the insurance may not be regulated by your state insurance department, and that you could face large future rate increases or cancellation.

Ask your agent or the carrier whether your company is likely to reunderwrite you; that is, look at the claims you have filed and raise your premium or eventually cancel your policy.

When you've chosen a policy, call your state insurance department to ask whether it has jurisdiction over the policy you're considering. Give regulators the name of the policy and other particulars. Ask if there are limits on the premiums the company can charge.

Look carefully at exclusions, and understand the limitations (services covered but only up to a certain limit).

Examine the co-payments for various medical services and the co-insurance required for hospital stays. Paying 20 or 30 percent of a large hospital bill means significant out-of-pocket expenses.

Some insurers offer a drug discount card for an extra premium. The older you are, the more the card costs. Some of these cards provide only a 15 percent discount. If you don't need a lot of medicines, you may be better off paying on your own than paying a premium for a discount card.

Many individual policies are written as preferred provider organization (PPO) contracts, which means higher expenses if you go out of network. Make sure doctors and hospitals that you use are on your PPO's list.

If you're turned down for health insurance, investigate your state's requirements for obtaining a policy of last resort.

Most physicians and specialists question below before accepting patients.
1. Who is the insurer?
2. HMO/PPO

Check with the physicians if Costco is acceptable.

Buy cheapest and acceptable insurance.

sorry....double post

Dave, I think $350/month for an entire family is pretty good. When I was let go, COBRA was $300/month just for me. Fortunately, I never used it and found a job within 6 weeks. My girlfriend is paying close to $350/month just for herself. We are in the NY/NJ area. My brother is paying $300/month in Atlanta just for himself also. Those co-pays are $10 higher than our plans which are $15.

I often do not elect dental coverage for myself. I find that I am paying close to $180/year for the coverage and my dental costs are like $150/year for regular maintenance. Even a small filling last year didn't bring me over the premiums. I'll probably skip it for 2 years and then elect it again for just 1 year.

Bump to keep this topic current. I'll be focusing on this again soon--thank you for all the excellent replies thus far!

He'll be paying $4200/mo for premiums; if he's not likely to go over $500 in any one year, he might want to look into an HSA (Health Savings Account - formerly known as MSAs)...
Go for a higher deductible, like $4200; if the premiums go down to 2100/yr (a guesstimate), take the other 2100 he would have spent, and put it into an HSA instead - it's just like a self-directed IRA, you can invest in mutual funds, stocks, bonds, etc, it's pre-tax dollars and earnings accumulate tax-free until 65!

Of course, the main thing is medical expenses; if the expenses are less than $500, they will be fully paid out of the HSA (you get a VISA check card for convenient access), and the remainder is still yours to invest and accumulate tax-free, whereas with the other plan you would be paying $500.

If your expenses rise up to 2100, they are still fully paid (when the other plan you would be paying $500 plus co-insurance); so if your expenses go up to $2600 you are still money ahead. (Higher than that in the first year, and you might pay more - but in the second year, the contributions from the first year would have accumulated (plus earnings) so it quickly becomes very advantgeous unless you have major medical expenses every year)

I wish I'd known about this in 1996 when it started, I could have accumulated probably $10K by now, and that's just on an individual plan! (Family plans allow for higher deductible and higher percentage of contribution)

CastigatRidendoMores said:

<< polaris said:

<< sloppy1 said:

<< I am surprised that this thread doesn't have more postings and views. I guess that most people here get their health ins directly from their employer and don't have to shop around.

Here is one more important link for finding a local health ins broker Finding a local health ins broker >>

I own an S Corp and had to deal with this myself. I have the BCBS HMO, and pay quite a bit for it(rates have risen 36% in three years). I called a few places and got rates for various plans from Tufts, Harvard Pilgrim, and BCBS and all of the prices were pretty much the same.

If you are healthy, you can get by with a high deductible plan. Of course, a plan like this could be a deal-breaker if you intend to hire employees at some point... >>

My BC/BS went from 145 3 years ago to 255 this month... just now discovered the HSA concept, and I could get my BC/BS down to 127 (4200 deductible)... but checking out eHealth (as mentioned here - thanks!), they quoted me $59 for Golden Rule Insurance (AMBest-rated: A) with a 5000-ded... I'll put the extra $196 I would have spent each month into my own HSA instead! (Actually I'll probably do the full $216 permitted me as an individual, since it's tax-free..) This HSA concept is really cool, I don't know why people are saying "it's only for the rich" - I'm certainly not (yet..)

(I'm a sole owner S-corp currently, but I think you can offer HSAs as a health coverage option up to 50 employees?) >>

I would seriously caution against buying health insurance from Golden Rule. They intentionally keep initial premiums low and increase premiums significantly in 2nd and 3rd year. In my case, they increase premium by 80% on the first policy anniversary and 100% 8 months later (did not even bother waiting for annual renewal). Once I called them to cancel the policy, they transfered me to 2 high pressure salesman (cs and manager) that made illegal theats of reporting preexisting conditions to MIB. It did not work in my case since I have none but the pressure they applied was tremendous. They continued making ach withdrawal attemps from my checking account for 3 months after that until I contacted state department of insurance.

Cannot say anything about paying claims since I never submitted any.

Glad I found Blue Cross plan in Asia for +/-$700 a year and no copay/ded.

Thought I'd bump this to give the guy a chance to answer and because my friend is considering quitting her job and becoming an independent contractor. She'll need some kind of insurance and these health accounts sound interesting. She's young and in good health and should be easily insurable.

Great ideas so far!

DH, when you do need to get insurance on your own, have you considered getting the cheapest barebones policy (probably less than $100/month for the 3 of you) and using it only for the beenefits of the "negotiated rate" and for catastrophic illnesses?...would costcos plan really be worth $2500-3000/year more?