Health Insurance Options for Nurse Entrepreneurs
One of the questions I get most often from nurse entrepreneurs is:
How do I provide health insurance as a business owner?
Whether it’s just for yourself or for your employees, providing health insurance is a critical piece of owning a small business. Unfortunately, it’s also one of the most complicated.
When you break it down, there are basically five options for health insurance. Let’s look at each one to help you get a better idea of which might work for your business.
Option #1: Health Insurance Marketplace
The Health Insurance Marketplace is the option most people are familiar with. This is the government run website that makes it easy for individuals, families and small businesses to find, price shop and buy a limited selection of ‘marketplace approved’ health insurance plans. The drawback to the Marketplace is that your options are limited (in Texas, for example, you can’t even get access to a PPO on the Marketplace), and plans are still rather expensive for the coverage you receive. For most people, I recommend avoiding the Marketplace. However, if you have pre-existing conditions and don’t have any employees that would give you access to Option #2 (see below), the Marketplace or Option #5 (see below) might be your best bets.
Option #2: HR Software Service Platforms
The second option is to use an HR software service platform like Zenefits or Gusto. For my office, I use Gusto. I’ve used both and find I prefer Gusto over Zenefits for their customer service and user interface.
With these platforms, you get access to plans that you wouldn’t have access to otherwise – the cream of the crop as far as traditional health insurance goes. In Texas, for example, I can get access to PPOs like Blue Cross Blue Shield and United through either of these platforms and offer it to my employees. Another perk is that you can offer FSAs, HSAs, dependent care savings accounts, dental insurance, vision, and other types of benefits through these software service platforms.
One thing to note is you need at least two employees to opt into coverage to qualify for these plans. So, if you don’t have any employees, this won’t be an option starting out.
Option #3: Health Share Plans
A third option is health share plans. These are not health care or health insurance. But they are an affordable way to plan for unforeseen medical expenses. Boiled down, medical cost sharing plans are groups of like-minded individuals that agree to come together and help each other pay their medical expenses. Everyone pays in a certain monthly share amount (similar to an insurance premium), and for your own expenses, you are responsible for covering an “annual personal responsibility”, or “unshared amount” (like a deductible). Then, the rest of your medical expenses are shared among the group from what they have paid in – in many cases up to $1 million per incident.
This is a nice option for people who are healthy and who have no preexisting conditions since health share companies can exclude you for certain pre-existing conditions.
Health share programs received an exemption under the ACA if they were faith-based, so you’ll note that many of the companies in this space have some sort of faith affiliation (ie. Liberty Health Share, Christian Health Ministries, Medi-Share, Samaritan Ministries, etc.)
However, as of this year, there are some newer non faith-based players on the scene, which include KNEW Health (founded by functional medicine physician Dr. James Maskell) and Sedera Health.
Option #4: Direct Primary Care Membership
A fourth option is a direct primary care membership. You may have heard about these recently in the news, but there’s actually no insurance involved with this option. Instead, you pay a monthly retainer fee directly to a provider that covers most of your primary care services like wellness exams and sick/injury visits. It does not, however, cover a hospitalization or specialty appointments – just primary care.
These plans are more affordable, ranging from $50 to $125 a month depending on your age. Family plans are often discounted. An ideal setup might be to combine this with a health share plan or supplemental insurance to cover accidents or big medical issues like cancer. If catastrophe strikes, you don’t want to be on the hook for those costs.
Option #5: A New Spin on Traditional Health Insurance
A fifth option is offered through companies like Oscar Health and Vista 360. Instead of the more traditional health insurance plans we’re used to seeing, these companies take more of a patient-centered approach and are more wellness focused (just take a quick look at their websites and you’ll see what I mean!). Many offer incentives for meeting certain health metrics – including cash in some cases!
These plans are more affordable than traditional health insurance and often offer convenient care options like telehealth. The downside is that you are often limited in which providers you can see.
Be Sure to Avoid This Costly Mistake
As you consider all your options, I want to help you avoid the same costly mistake I made in my practice. If you have employees that you want to offer benefits to – this was always important to me – then you might want to consider paying a flat monthly fee towards their health insurance instead of covering a percentage.
When I first started offering health insurance to my employees, I covered 90% of their monthly premium. My employees loved it, but this was a mistake for two reasons.
First, since the employees were only covering 10% of their premium, they would always choose the most expensive plan because they knew they weren’t going to have to pay much out of pocket. Of course, these selections hurt the company’s bottom line. One employee with a spouse and a few kids can cost a couple thousand dollars a month. (And especially when you’re just starting out, that’s a big chunk of change to take away from the business itself.)
The second issue was that it was difficult for me to predict what my expenses would be before my employees selected their plans or declared their dependents.
Now I offer to pay $500 towards my employees’ health insurance with them covering the rest. With this setup, it’s easy for me to calculate how much health insurance will cost me because it’s a flat monthly fee I’m paying toward my employees’ plans.