This is a common question from our clients and the answer is ever changing. As a local, Houston based, health insurance broker, we have shifted our focus primarily based on the federal government’s inability to resolve the issue.
In years past, we were more focused on the individual and family markets, but now we are reaching out to all of our existing clients to explain the benefits of purchasing a small group health insurance plan so long as their business and/or source of income is properly structured to do so.
Let me give you an example in the form of a Husband/Wife real estate brokerage team with two dependent children. The simple solution, up until a few years ago, was to purchase a family plan on either the Marketplace or “Off the Exchange”. While one can still do this, premium rates have skyrocketed and one can no longer purchase a PPO plan on the private market. This can be problematic especially if your preferred physicians or hospital is not in the HMO or EPO network. In the local Houston area, many of our clients who use Texas Children’s physicians or who are currently going through cancer treatment at MD Anderson can no longer find those providers in any of the area HMOs.
So what can you do? Let’s go back to the family of four with the Husband/Wife real estate brokerage team. If they do not already have one, they need to form an LLC with the Husband and Wife as co-owners (percentage of ownership is not important). This will easily allow them to form a small group plan and the kids can be dependents on either Mom or Dad’s side.
The advantages of this are as follows: 1) A PPO can now be purchased which will more than likely include their preferred doctors and/or hospitals. 2) The entire family’s premium is 100% tax deductible through the LLC which is generally not so with a family policy 3) Monthly premiums will be 20-30% less if they purchase an HMO or about the same if they purchase a PPO and 4) You will now have an advantage over other employers if you decide to hire new employees in the form of group health insurance coverage for your workers.
There a just a few items to consider before going this route. In general, insurance carriers will not allow you to add your Spouse to an existing LLC or corporate entity as an Owner for insurance purposes, so it would be more efficient to just form a new LLC with both as Owners from the date of formation of the corporation. Alternatively, you could add him/her as a full time W2 employee to an existing corporation without issue.
If you would like to explore forming a Texas small group insurance plan, you will definitely need a Broker and we’ll be happy to help. As always, our services are no cost to our clients and we are paid directly from the insurance carriers. The rate you pay will be the same whether you use a Broker or not, so there is no reason to not use an experienced Broker.
You can reach us at either 866.270.6209 or via email at email@example.com