Let’s take a look at four common options.
Three of our four options are insurance products and one is not. Three are compliant with the ACA and, therefore, will keep you from paying the 2.5% shared responsibility payment from the IRS. One will not, but it’s quite inexpensive.
Small group health insurance (ACA compliant): If your business is properly configured, this is the preferred option as you can choose from a PPO, HMO or EPO. The best news is that your PPO will likely include both MD Anderson and Texas Children’s. Premiums for small group health insurance are 100% tax deductible and can also have side benefits. Offering these to current and future employees is a great way to solidify your team.
Family health insurance or Individual health insurance (ACA compliant): If your employer doesn’t offer coverage or you are self employed, this is one option. For 2018, this type of coverage only has four insurance carriers in the Greater Houston area and all four offer only HMOs. Good news though; one of the HMOs does not require a referral to see a Specialist, so you won’t notice much difference vs. a PPO when you actually use it. If you’re self employed, they are tax deductible and can provide solid protection. A downside of this category, unfortunately, is that rates have risen considerably year over year and are not necessarily the best choice for health insurance coverage. Preexisting conditions are covered from day one, so this may be the best choice for those affected with them.
Temporary health insurance or Short Term Medical Insurance coverage (NOT ACA Compliant): A temporary policy can be a solid idea if the following math works in your favor. Price a temporary policy vs. a comparable family or individual health insurance policy. The temporary policy will always be less expensive. Then calculate: (Difference*12) / .025 This gives you the amount of adjusted gross income you need, while factoring in the 2.5% IRS penalty, in order to justify buying a family or individual health insurance policy. If you likely won’t exceed this number, seriously consider a temporary policy. Currently short term medical plans can only be in force for 90 days, but can be renewed subject to simplified medical underwriting. The 90 days is likely to be extended to 12 months fairly soon though. This will make this option even more attractive. These plans do not cover preexisting conditions so are only suitable for those who have none.
Medishare Plans (ACA Compliant): While these plans are not technically insurance, they are compliant with the ACA law and will absolve you from the IRS penalty. These plans have a 2 year waiting period on preexisting conditions, 6 month wait on surgery and a few other drawbacks. Not my favorite option. These can be good for those who do not need or want health insurance, but simply want to avoid the 2.5% IRS penalty.
No matter your situation, we at Selected Benefits will be happy to help facilitate a solution. Just reach out to us at 866.270.6209 for a free consultation and together we’ll start the ball rolling.