30 Second Insurance Tips©

Tip #292- Coming Full Circle (That Didn’t Take Long)

Early in 2014, The Edward Widget Company figured they would drop their group health plan, taking advantage of The ACA’s guaranteed issue provisions (i.e., individuals can buy their own coverage without regard to pre-existing conditions).
Trouble is, Ed and his five employees’ earnings disqualified them from receiving premium tax credits. Then, in May of 2014, IRS made it clear that under Notice 2013-54, employers were prohibited from paying for individual policies with pre-tax dollars.
And now, for 2017, insurers remaining in the individual market are only offering so called limited or narrow network plans that exclude one or more health systems.
Neither Widget or his employees are happy.
Here’s a solution; a small group plan (also guaranteed issue) with a comprehensive network of providers and 2-3 plan design choices.
Employees willingly trade $400/month of taxable income for the tax free premiums of an employer sponsored group plan. Any share of an employee’s premium in excess of $400 can also be pre-taxed under a Section 125 Premium Only Plan (POP).
Employees buying coverage through the group (we only need two) have better choices and lower taxable income. Widget’s costs are defined and yield lower payroll taxes.
Sayeth Yogi: “It’s like déjà vu all over again.”
P.S.  Need to make health insurance decisions for 2017 now? Confused? Wondering what will happen to The Affordable Care Act under a Trump administration? I don’t have all the answers but since I spend most Saturday’s in our Mequon office, here’s an invitation to a coffee klatch from 10:00 until Noon next Saturday (12/3). If nobody shows up, I’ll get over it. If you all show up, I’ll be in big trouble with the Mequon Fire Department! (And you might have to bring your own coffee.)