Health Insurance for Entrepreneurs
CBS 3.28.11
Question:
Dear Entrepreneurs,
I have a friend in NYC who is working on a start-up and would like to leave his job soon so he can concentrate on his venture full-time.
However, he is concerned about losing health insurance coverage for himself and his children.
Is there a special insurance pool for entrepreneurs that he could tap into? Or any other ideas on how to manage this affordably?
Thanks in advance; have a good day.
Answers:
1. A couple of options come to mind.
Freelancer's Union has some (relatively) reasonably priced plans for people buying their own insurance http://www.freelancersunion.com/
Another option that might apply if you fit the requirements is Healthy NY. I believe they have a tool on their site that can confirm if you're eligible: http://www.ins.state.ny.us/website2/hny/english/hny.htm
2. When I self employed back in 2005, New York State had a program that offered cheap health insurance to entrpreneurs as long as their venture is in "startup" mode. The state determined eligibility on the basis of operating income, which had to be less than $24k at the time.
HealthyNY. It was managed by Aetna when I was a member.
4. Your friend should look at the Freelancers Union, www.freelancersunion.org. They have an excellent healthcare plan, perfect for people like your friend. I used it at one point when I was "in between" things.
6. If your friend is currently working for a medium to large business, he should be able to qualify for COBRA, which will allow him to purchase coverage for up to 18 months through this current employer, at their full price.
There are also a few insurance companies that sell coverage to individuals - Blue Cross is usually one of these. There may also be coverage available through Freelancers Union. You do have to be more careful of non-group plans, as they may be more likely to deny coverage, or retroactively claim pre-existing conditions. Because of this, many entrepreneurs try to get coverage through their spouse's employer.
7. I am an associate with Aflac.
We could develop a reasonably priced portfolio of policies to cover your friend and his family for Accidents, Hospitalization, Dental, and "everyday" doctor's visits (minor illnesses).
Your friend may contact me directly and I will be very happy to take a quick medical history, create a package that works for him and his family, and write the policies before the end of the week.
Rob Smith
Columbia Business School, 1995
resmith95@gsb.columbia.edu
rsmith.aflac@gmail.com
202.352.7498
8. Contact my health insurance broker Ken Krill ... I have copied him on this email. Mac
ken@thevarsitygroup.com
9. I suggest using a benefits broker. I've gone through this, and it is exceptionally confusing to navigate without professional help. And with a broker you may end up paying less. I've received excellent service from Scott Martin's firm:
Scott L. Martin
President
211 East 43rd Street, 18th Floor
New York, NY 10017
p.212-818-9570 ext.224
f.212-818-9572
c.917-887-6868
scottm@martinbenefits.com
11. You can contact www.advanco.net
13. The key is for your friend to keep insurance in force. In NY a health insurance company has to offer you insurance regardless of pre-existing conditions if you have been insured within a certain amount of time (you should check but I think it is 60 days). Insurance in NY is extraordinarily expense. No way around it. He should not be surprised to pay in the realm of 1,500 per month. Just go to ehealthinsurance.com. The best thing possible is if he can get on COBRA.
14. PRO BONO/DISCOUNT SERVICES FOR SMALL BUSINESSES
http://www.nyfirst.ny.gov/ResourceCenter/Data/ProBonoDiscServ_SmBiz.pdf
15. When I worked for myself I used Healthy New York for sole proprietors.Very affordable, high deductible, and overall okay, but not great.
http://www.ins.state.ny.us/website2/hny/english/hny.htm
17. Your friend should check out HealthPass (healthpass.com) which offers health insurance to sole proprietors and small businesses in NYC.
In the past I have also use ehealthinsurance.com . However, HNY was a much better value.
19. Dear Shireen et al.,
I'm an insurance broker working on these issues everyday, including health, life, disability, pension and tax issues as well as property and casualty insurance (including New York's mandates, e.g., Workers' Compensation--if your friend hires someone else) for small and large businesses, including many entrepreneurs.
For New York State (I'll assume for the moment your friend lives and works in New York), there are several group coverage possibilities for health insurance. One or more may apply to your friend's case.
As someone noted, COBRA may be available. Generally, COBRA health insurance coverage can last up to 36 months depending on the circumstances and COBRA covers employers with at least 20 employees.
New York has mini-COBRA, meaning that Federal COBRA coverage of 18 months is extended, for all employers, no matter how small, for almost all group health insurance contracts.
If your friend is eligible to continue health coverage under federal COBRA for 18 months, then he or she can continue coverage under state continuation coverage for an additional 18 months. He or she would have up to a total of 36 months of coverage when combining the COBRA and state continuation benefits.
I'd be happy to speak with your friend regarding his or her specific situation. Frankly, there are a variety of laws and plans that may apply, and it's worth having a specialist tailor a plan to meet his needs, budget, plans and what continuation coverage might be available to him.
Best regards,
David A. Guterman, Certified Financial Planner®, Trust and Estate Practitioner®
Guterman Organization
CBS '93
"Planning with a Bias for Action" (TM)
1875 Century Park East, Suite 1950
Los Angeles, California 90067
1763 Fairfax Avenue
Los Angeles, California 90019
email dguterman@alum.mit.edu
tel 323-312-8260 fax 323-386-9600
20. trinet.com is one of the best options covering all benefits and HR related areas. Many of my friends in the start-up world use this service.
22. I've recently set up a company and got insurance myself as an employee through ADP and Oxford. The rate is satisfactory but not great, but the coverage is excellent. I am currently the only one in the company getting coverage.
Depending on certain factors, it can make great sense for small companies to use a PEO (or professional employer organization). I spoke with the Ambrose Group, and their health insurance rates were probably a full 20% lower for equivalent coverage. However, it would only make sense after a certain threshold number of employees (around 3-4), due to their flat fees for "membership" in the organization.
23. I looked into a PEO last year but they all had a minimum number of employees before they would pick you up. It was not an exhaustive search. Note that offerings, regulations, etc vary by state. In NJ if you have two employees you can get a group policy that is relatively inexpensive (about 50% of the individual rate.) For NYC Freelancers Union is a good deal.
I worked with the agent below to get the policy, after I filled out the Healthy NY forms - he was excellent to work with and I highly recommend him:
Douglas R. Bulla-6E
Empire BCBS Small Group Sales
11 Corporate Woods Blvd
Albany, NY 12211
(p) 1-800-662-5193 Opt 1, ext 7123
(f) (518) 367-5102 or (518) 367-5279
(e) Douglas.Bulla@EmpireBlue.com
Here is the website for Healthy NY:
http://www.ins.state.ny.us/website2/hny/english/hny.htm
as a friend of dan friedman's i'm happy to try to help.
(we are dan's insurance broker)
ask your friend to call bill gross, CLU
in my office.
212-620-4040 x 17
he deals with groups and start-ups all day.
of course it probably helps if your friend has 1 more person in the picture,
but bill might be able to work around that.
there are affinity groups...
Jack Gross, CPCU
Gross & Co. Insurance
307 Seventh Avenue
New York, NY 10001
212.620.4040 Ext. 11
F 212.620.3999
jack@grossinsurance.com
25. Your friend will most likely take up COBRA from his old firm, but I’d suggest talking to Susan Combs, president at Combs & Company (she’s CC’ed). Combs & Co is a full-service insurance brokerage firm and she specializes in small businesses (she does all our insurance). Better to be informed by someone who knows all the changes.
scombs@combsandco.com
26. More than happy to help you out. Let me know what your schedule looks like and we can set up a phone call to answer any questions you have.
Susan
Susan L. Combs
President
Combs & Company
If you don’t know insurance, know your broker.™
*Please note our new Life & Health Office address!
Life & Health Office
38 East 29th St, 9th Flr
New York, NY 10016
Property & Casualty Office
90 Broad St, Ste 1503
New York, NY 10004
D: 646.736.3737
C: 646.202.0500
F: 646.365.4564
scombs@combsandco.com
www.combsandco.com