NYS Small Group or Individual Health Plan?

ebbrown · 10-21-2009, 06:35 PM

This thread continues a topic I started earlier.

My small non-union condo has a super and some other full-time staff. We want to get health insurance for our super, but can't afford to cover anyone else. Group coverage is out because the NYS minimum group is two people/class.

Another suggestion has been sole proprietor, although the super would have to register with the city clerk and that would probably cause more problems. And may simply not be worth the rigmarole.

I assume we'll end up buying an individual private policy for him and he will have to pay tax on the imputed income.

Any thoughts on the sole prop or individual private. BTW, VolAgent and ABC were dead on in their prior comments. Thanks, all.

Full Throttle · 10-22-2009, 04:08 AM

You could have the super buy and individual policy, but the avoid the tax effect you could set up a 125 plan that would allow the super to pre-tax their his (or her) individual plan premiums (saves you the FICA, him the FICA & income tax associated with it).

MedicarePlanSolutions · 10-22-2009, 04:40 AM

NYS is a TERRIBLE place to do health insurance. I live in NY and sell life here, but only focus on health in other states because the products just make more sense. There are a handful of plans you could get him on, but it'd depend on things like what county he's in and a some others. Feel free to e-mail me if you'd like, I can get you pointed in the right direction.

somarco · 10-22-2009, 03:36 PM

Don't know much about this. Looked at it a few years ago when they contacted me about taking the concept to GA.

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ABC · 10-22-2009, 06:07 PM

Originally Posted by Full Throttle

You could have the super buy and individual policy, but the avoid the tax effect you could set up a 125 plan that would allow the super to pre-tax their his (or her) individual plan premiums (saves you the FICA, him the FICA & income tax associated with it).

This is not good. Once you set up a section 125 it can be interrupted as an employer sponsored health plan.

I know guys do this all the time for individuals but from a broker standpoint you want to shift the risk of setting that up. Have some of those Aflac agents set up a 125 with their plan so that they are responsible.

Look just sell an individual plan and move on.

I am not an currently selling in NY. I had 3 groups for a handful of years and told them to get other representation because I could not keep up on NY laws on small group.

MedicarePlanSolutions · 10-23-2009, 10:01 PM

Originally Posted by Full Throttle

You could have the super buy and individual policy, but the avoid the tax effect you could set up a 125 plan that would allow the super to pre-tax their his (or her) individual plan premiums (saves you the FICA, him the FICA & income tax associated with it).

Individual plan in New York? They don't really exist. The closest one can probably find is some carries would let you 1099 the super and he could get his own small group plan, but they'll want to see some paperwork proving that he's a 1099 so it'd have to be done legit.

ABC · 10-27-2009, 02:28 PM

Originally Posted by MedicarePlanSolutions

Individual plan in New York? They don't really exist. The closest one can probably find is some carries would let you 1099 the super and he could get his own small group plan, but they'll want to see some paperwork proving that he's a 1099 so it'd have to be done legit.

I thought they had individual health plans in NY?
Oxford sells a personal policy and so does Empire......Right?

somarco · 10-27-2009, 03:49 PM

IFP's exist in NY. Not much to choose from, but they do exist.

YouGotMyMoney · 10-27-2009, 04:41 PM

Correct, however quite a few are only for sole proprietor's.

MedicarePlanSolutions · 10-28-2009, 12:28 AM

Hence the "don't really exist". If you are low income or a sole prop there are some ways around it. You can get individual policies that are either junk (like AIM) or obscenely expensive. But you're not going to find individual products like Assurant, ICA, etc that let folks get coverage for less than $400/month. It's guaranteed issue on small group so there is no health underwriting and premiums are through the roof.

somarco · 10-28-2009, 07:26 AM

NY is a GI, community rated state which drives the premiums way up. These are two provisions in health insurance reform that will have the same effect on individual health insurance nationwide.

ABC · 10-28-2009, 09:12 AM

I had clients that on the small group side from NY.

After 3 years I flat out told them that I can not service them. I had the biz with UHC then they bought Oxford so my 3 groups then switched over to Oxford. The rates where way high and then the mini cobra thing became an issue. So when an employee termed I would send a copy of the entire bill from the DOI stating what the mini cobra was.

I still have some group dental plans in place and one group LTC.I was able to get the LTC because I was working on Midwest comp which was much lower than NY comp.

If we every have interstate health insurance New Yorkers would save ton on premium.

MedicarePlanSolutions · 10-28-2009, 09:24 AM

Originally Posted by ABC

If we every have interstate health insurance New Yorkers would save ton on premium.

My heart warms a little when I heart of interstate health insurance purchase. If my wife and I had to pay for health insurance we'd have to get the small biz insurance and it'd be over $600/month. If we lived two hours south of here it'd be $170/month with Assurant. If GI takes effect I don't think it'll lead to more people having health insurance, if anything I think less people would have coverage. That is, unless the public option was the only GI plan and the government subsidized the premiums to make them reasonable for folks to enroll in it, but who wants the government managing their healthcare? Presumably no one with any experience in the field would want that unless they're a total dumbAl.

somarco · 10-29-2009, 07:50 AM

What is this fascination with interstate sales of health insurance? Even if it happens, there will be NO savings. None.

There are primarily two reasons for pricing differentials from state to state. Network availability and mandates.

When an OH (low cost state) sells in NY (high cost state) their premiums will adjust for the higher cost of care automatically. If they don't they are toast.

If NY is going to allow non-res carriers to sell their product without imposing NY mandates, the carriers already selling there will demand, and get, the same ability to offer plans without mandates. When that is done there are no more savings.

States like NY, ME, MA and other GI states with a LOT of mandates limit the number of plans, and carriers, by creating a harsh environment. Until the rules of engagement are changed, selling across state lines is not going to provide any relief.

MedicarePlanSolutions · 10-29-2009, 08:02 AM

Originally Posted by somarco

When an OH (low cost state) sells in NY (high cost state) their premiums will adjust for the higher cost of care automatically. If they don't they are toast.

If NY is going to allow non-res carriers to sell their product without imposing NY mandates, the carriers already selling there will demand, and get, the same ability to offer plans without mandates. When that is done there are no more savings.

States like NY, ME, MA and other GI states with a LOT of mandates limit the number of plans, and carriers, by creating a harsh environment. Until the rules of engagement are changed, selling across state lines is not going to provide any relief.

The reason why it'd be great is because you're taking for granted that the state will put the same expectations on the carriers from out of state, which is extremely unlikely. As much as the state of New York would LOVE to regulate the plans, if they're out of state they wouldn't be able to. The value of buying across state lines for a lot of folks is that a company that can underwrite them will give them a better deal then one who's flying blind on their risk. The value of being able to buy across state lines is that we'd be able to take advantage of plans that aren't available here. Again, if my wife and I lived in PA or VA for example, our health insurance premiums would be less than $200/month. In new york, for less coverage, it'd be well over $600. The reason for the difference is Assurant or ICA or any other carrier can say "young married couple with no health conditions, we don't have to charge them as much because they're not as much of a risk", as things sit right now, that's just not an option for anyone living in the state of New York. Even though a carrier may charge a bit more for New York zip codes, they'd still be able to underwrite which would drive premiums down quite a bit. So maybe a couple like my wife and I would pay $225 instead of $180, but that's still a bargain compared to anything else here. That make more sense?

somarco · 10-29-2009, 09:29 AM

As much as the state of New York would LOVE to regulate the plans, if they're out of state they wouldn't be able to.

This can only happen if the states ability to regulate plans is usurped by the federal government. Of course that would impact not only health insurance, but life insurance, HO, auto, commercial lines, etc.

As someone who lives in a state that lacks GI mandates (but has plenty of others), I can tell you consumers can't make up their mind from the 3,000+ plans available from the top 6 carriers. Adding in another 10,000 plans is not going to make it any easier.

NY has always been a difficult state for carriers, and always will be. I don't know why any carrier agrees to write business there.

But for you to get your wish, all the regulation which the feds delegated to the states would have to be revised. Of course Obamacare makes GI a national mandate so there goes your argument that buying across state lines will improve your lot.

FWIW, Wellpoint did a study, released a couple of days ago, showing the impact of Obamacare on premiums.

Increases ranged from 6% in NY to 199% in OH.

Welcome to Obamaland!

ABC · 10-29-2009, 09:35 AM

The GI states would find great value in Interstate health plans.

The other states that have high mandates on coverage would also find the savings in premium in the double digits.

Then if you wanted a certain thing covered then you could buy a policy from that state that mandates it.

In Indiana Autism is covered as any other illness. Every family in the country that is dealing with autism would look at buying a policy from Indiana.

In Illinois Fertility is covered as any other illness. So then couples having problems getting pregnant would seek a policy form that state.

The person that is not interested in those coverages could buy a policy from Ohio and save 10% on their premium.

There would be serious issues in the beginning with doctors charges but it would work out in the long run.

300 plus carriers fighting for business in each state would be huge.

Marco I really don't understand why you dis like this approach to health insurance?

somarco · 10-29-2009, 10:16 AM

Introducing more carriers will mean nothing. As indicated before, consumers can't make up their mind already. More plans, more carriers won't work.

In order to sell across state lines mandates will have to be eliminated. That means the autism mandate will go away when an IN plan is sold in OH.

If mandates are not eliminated then you get adverse selection. Anyone wanting a policy covering autism, or IVF, will simply look for that plan and ignore the others.

Won't be long before the carriers put 2 and 2 together and raise the rates for everyone, in state and out of state, to cover the increased risk of adverse selection.

Having 300 carriers fighting for a relatively small piece of the market does not make for a good business model. Blue has lost market share in GA but still have probably half the individual market. The other half is spread between Aetna, GR, Humana, Time and Coventry. Other players like World, Imerica, Celtic may share 5% if that.

Even though Blue is not competitive, they still write more business each month than any other carrier. Most folks can get a better deal from the other carriers but they want Blue "because most docs take it".

Medical Mutual (an OH carrier) operates in GA as Consumer Life. The amount of business they write here is miniscule and most folks won't buy, even if they have a better value, because they never heard of Consumer Life.

I don't see other carriers making much headway either if they try to come here.

If a carrier enters the state and only writes a handful of policies all it takes is one big claim to skew the LR on that block. If they can't come in and rather quickly pick up 5% market share or more they will not be able to remain competitive and will have to pull out.

I have seen it too many times where carriers enter the market and then have to retreat.

The only ones who can afford to travel across state lines are already doing so. The health insurance business never has been good for smaller players and even less so going forward.

Aetna entered the GA market a little over 3 years ago and is just now gaining some momentum. Cigna came here early summer and is still trying to get some traction. If carriers of that size with deep pockets can't (or won't) come in with a splash, what chance does a smaller carrier have of making it?

None.

It is not that I have anything against peddling across state lines. More that the business model won't work.

It was tried years ago in the group market with MET's and MEWA's. That failed too. No reason to believe this will be any different.

ABC · 10-30-2009, 01:05 PM

Marco
You make valid points about networks.

I think it would have a huge impact on premiums for people that are healthy.

The national carriers already have deep network penetration. If the regional carriers continue not being able to compete we are going to end up with just a handful of carriers for the entire country. Then we really see price fixing.

I think the interstate approach could open the doors to the regional carriers picking up more business and then they could work on creating their own networks in each state.

At this point I dam near feel like a captive agent as it is.

10 years ago when I got into this industry you could switch a group mid year and save them money. That is not the case anymore.

MedicarePlanSolutions · 11-02-2009, 10:06 PM

Originally Posted by somarco

This can only happen if the states ability to regulate plans is usurped by the federal government. Of course that would impact not only health insurance, but life insurance, HO, auto, commercial lines, etc.

But for you to get your wish, all the regulation which the feds delegated to the states would have to be revised. Of course Obamacare makes GI a national mandate so there goes your argument that buying across state lines will improve your lot.

FWIW, Wellpoint did a study, released a couple of days ago, showing the impact of Obamacare on premiums.

Increases ranged from 6% in NY to 199% in OH.

Welcome to Obamaland!

For the ability to buy health insurance across state lines the feds wouldn't have to trump the states on regulating insurance, the plans would just have to be regulated by the states in which they're licensed, regardless of where the insured resides. It's not a perfect solution, but I think it could help a lot of folks who don't have more affordable options. I don't like the Obamacare model, but I think young healthy people should be able to buy health insurance for less than $400/month.

With respect to the different plans, there was talk of standardized options. I don't think the government should mandate all plans fit certain models, but if they (or the industry) put together models like Medicare Supplements so folks could compare apples to apples and that might help too.