Harry bought a business with a mix of 15 W-2 and 1099 “employees,” half of whom get coverage through a working spouse or parent; the other half in the individual market.
You know, the individual market that’s constantly in the news these days; that no one seems able to ‘reform!’ Each year networks shrink while premiums and out of pocket costs “skyrocket.” Other than those who qualify for generous premium tax credits, most individuals buying their own coverage just aren’t very happy.
We’ve pointed out to Harry the benefits of a group plan:
- far more plan design and PPO network – often broad; i.e., all inclusive – options
- new enrollment platforms that simplify the administration of benefits and HR
- premiums paid by Harry are deductible; by employees, with pre-tax dollars
- Harry can define his contribution; 50% of the single (only) premium is the minimum
- you only need two W-2 employees to elect coverage; then 1099‘ers could opt in too.
Generally, in the individual market you have to wait for the year-end Open Enrollment Period to buy or change coverage. Employers like Harry can buy or change coverage at any time, without regard to pre-existing conditions.