Karen and Bill started a business three years ago. They kept their health insurance through Bill’s previous employer, but COBRA ends September 30th.
We were asked to help them decide if they should buy a policy for just their family of three or a group plan for the business, which employs 10 people.
- The COBRA premium for Karen, Bill and their son has been $1,600/month; the cost of similar coverage would be about $980/month.
- Unlike premiums paid for individually owned insurance, group premiums are deductible.
- Of their 10 employees, four are part time (ineligible) and two are under age 26 (stillcovered by their parents).
- The single premiums for the other three employees average $378/month; the businesswould only be required to pay half that. If uninsured now, they are taxed 2% of their income. If they’re buying on their own, it is with after tax dollars and, their Marketplace subsidies are less than the 50% their employer will pay.
In short, through a group contract, Karen and Bill can insure their family and 3 employees for the same amount as their COBRA premium. And, reduce everyone’s taxes to boot.