Editor’s Note: As of 5/26/2016 InHealth Ohio is being liquidated by the Ohio Department of Insurance. More information is available here.
How a business owner should approach health insurance is one loaded question. An issue of increasing complexity, it’s not something a business owner or entrepreneur should tackle on their own.
To help demystify the process (at least somewhat), The Metropreneur spoke with insurance provider InHealth Ohio and Eric O’Brien, a broker with Mosaic Employee Benefits, who specializes in individual and small group health insurance.
Both vehemently encouraged small business owners, entrepreneurs and individuals to reach out to either of their organizations or someone with experience in the industry when trying to get health coverage. Understand what exactly your policy says, and your options and legal obligations. This advice – it’s often free. Brokers are paid commission by insurance companies, not by you.
In part one of our healthcare guide, we’ll outline what the requirements are for offering insurance, and what to do if you’re an individual looking for coverage (or a business owner who wants to steer your employees int he right direction).
Do I need to offer insurance to my employees?
First things first. Is your business legally obligated to offer insurance?
“If you meet the full-time equivalent of 50, you have to provide insurance,” O’Brien says. Many people think full-time equals 40 hours/week, but employees are considered full-time at 30.
If you have under 50 full-time equivalent employees, you are not legally obligated to offer health insurance, however many businesses choose to as an attraction and retention tool. That opens a small business and its employees up to a number of options (more details on that in part 2).
If an employer doesn’t offer benefits, an employee still needs insurance. While most plans have entered catastrophic territory (aka generally only beneficial if something really bad happens), in that one instance something serious does occur, it’s better to be insured. Not to mention, it’s the law. Each year a penalty is imposed on uninsured individuals. The fee was only $95 in 2014, but will triple in 2015 to around $300 and again in 2016 to around $1,000.
Takeaway: If your business has under 50 full-time equivalent employees, you’re not legally obligated to offer insurance, over 50 and you’re legally obligated. And yes, you still need insurance even if your employer doesn’t offer it.
Options, Options, Options
Again, individual needing insurance should seek advice from a trusted and knowledgeable source, not just rely on the healthcare.gov exchange.
Among the insurance changes that the Affordable Care Act implemented, it also created health insurance co-ops like InHealth Ohio to provide access, innovation and competition in the marketplace.
“InHealth Mutual is a non-profit insurer, we’re built for members by members,” says CEO Jesse Thomas. The provider offers quality, affordable insurance that’s responsive to the needs of is members. Instead of stockholders expecting a return on investment, InHealth funnels all of its surpluses back to members by either lowering premiums or adding additional benefits.
Policies through InHealth Ohio cover the 10 essential health benefits outlined by the ACA, but also focus on wellness, offering services like acupuncture because its members expressed interest.
Being a co-op, InHealth Ohio can develop policies based on member feedback. It’s how they arrived at their 2+2 plan. Each policy holder gets two free visits to primary care and two free visits to a behavioral health specialist.
“The target audience for us is individuals under the age of 65…and those who are 138 percent of the federal poverty level and above,” Thomas says.
In the year and a half since its inception, InHealth Ohio is providing insurance to about 22,000 – 23,000 individuals, of which about 11,500 are families and individuals, and the additional 11,000 from small businesses.
InHealth also offers a wide ranging network that’s broad enough to be easily accessible to 95 percent of the people in the sate. O’Brien points out that skinny networks have emerged as a way to make plans more competitively priced. While perhaps a better price, skinny networks make exclusive deals with a much smaller network of providers, meaning if you need to go to the doctor or hospital, you’ll probably have a more difficult time finding someone in-network.
Much of O’Brien’s work at Mosaic goes towards matching individuals and families with the right insurance, whether they are approaching him as an individual or at the referral of a small business. Not all policies are created equal, and he takes the time to educate them on what a policy really means and explore different options. Sometimes just $20 more a month can really make a break a year in terms of benefits.
O’Brien says InHealth Ohio is one of the best insurance providers in the state because of its broad network. They are also slightly more affordable. Thomas says their average premium is five to seven percent lower than its competitors, and in sates with co-ops (there are 22 across the nation), premiums come down by an average of nine percent.
Takeaway: The marketplace is hard to navigate, get help finding the best policy for your needs. Co-ops like InHealth Ohio are bringing a new and seemingly appealing option to the market.
Stay tuned for part 2 of how to approach health benefits as a small business owner. We’ll actually get to that whole small business offering benefits part…