In the Trenches: When Nobody Will Insure Your Employees – Small Business Center
I have been trying for months to find a way to provide health insurance to my employees, and I have finally given up. It’s simply not possible, and that is just ridiculous.
Cranky on the Web – Nobody Will Insure My Employees
49 comments on “Cranky on the Web – Nobody Will Insure My Employees”
I feel your frustration. Because of your situation, you may have valued employees who may now seek other jobs – bummer. Because hopefully Obamacare will soon be gutted or fully repealed, you might bite the profit bullet and go with some of your expensive options until a more reasoned health plan is brought forth from government in 2016. You have an outstanding business model that has grown in reputation and following.
Good luck, and I hope you can continue to prosper and attract/hold good employees in the long term.
Sincerely, “All Day Ray”
rayuribe – Gutted or fully repealed? That will in no way help the situation at all.
If Obamacare is gutted or repealed, the options are only going to get worse.
You might try Trinet . My company used to manage our own health insurance plan for our employees but every year the premiums would increase 10% or more. Trinet has enabled us to a join a much larger pool and, although our rates do increase, it’s at a lower rate.
They also handle our payroll and other benefits. We have employees in several states and Trinet has helped keep us sane dealing with all the paperwork. We’ve been using them for something like 5 years now.
They’re a great solution for small and medium sized businesses.
Contact me and I can tell you more.
Tony – Trinet is one of the PEOs I’m talking about in the article (though I didn’t mention them by name). What they offer seems nice, but it’s quite costly. Doing the math, I’m better off just increasing wages, paying taxes on it, and then letting people buy their own health coverage. At least, that’s how the math is working right now at this size. I don’t find myself spending much time on payroll and benefits, so that’s not an issue I’m trying to solve. But so far, Trinet is the only option I’ve found if I want to provide healthcare as a company.
I use a PEO. Most of my employees in Florida and I found one in Florida that could take care of everything needed. In the beginning I thought the cost of using the PEO was expensive as compared to me processing payroll and providing workers comp insurance direct but in the end the time the PEO saved me turned out to be more valuable to my business than the cost savings of doing it myself. As mentioned in the article they have much more buying power than I could ever dream of having and took care of my employees very well.
I have a certain amount of transient or part time workers during busy seasons and the PEO made the hiring and release of those workers a snap. Simple to bring them back with a couple clicks on their web site.
Can’t say enough good about my PEO and although it’s more expensive as pointed out in the article I was able to roll those costs forward into my products and services and that small increase was actually well received by my clients.
Graydon – How big is your business? The reason I ask is that many of the PEOs I’ve reached out to have a 10 person minimum and we don’t meet that. Trinet is the only one so far that hasn’t had that limit. There are a million PEOs out there though, so maybe I just need to keep looking.
I have 4 people for most of the year but it tops out at about 20-24 during peak periods. I do not know if my PEO has minimums or if they look at the year and feel I have covered spend to make it worth their time. Also I need to mention my PEO started out as a very small local operation but grew over time. I figure I have been with them for about 12 year give or take.
Guess you can thank “Obbummer Care” for this! Incredible that you want to do the right thing and can find no way to do it. At the very least you should send a letter and thank the guy at 1600…maybe he has some better ideas!
In the mean time each of your employees is going to need to apply thru their state exchanges and you can reimburse them a set amount (another bummer as its taxable & and as an employer you get zip). Again maybe the genius at 1600 can “be clear” about this great idea of his.
Thanks for trying so hard to do right by your employees!
Nannakathi541 – I couldn’t disagree more. I don’t talk politics on the blog here, but the problem is that the Dems wanted to do it one way, the Republicans wanted it a different way, and in the end, they settled on a half-assed solution in the middle, as is always the case. Had a single payer system been created that took the burden away from the workplace, then nobody would have to deal with these kinds of issues. But of course, a lot of people think that’s the worst idea ever, so instead, we get a bad middle-of-the-road solution. Good job, government.
I don’t disagree. Poorly designed and unequal access! To late to undo this monster, but it needs to be fixed! And frankly I don’t care which party does what as long as it gets done.
The original article and the small business difficulties in many forms are playing out around the country, while old men in Washington who hardly know what the Internet is, makes rules that can’t possibly work in this new world we live in.
How can you say the Affordable Care Act was a compromise between parties when not a single Republican voted for it? Why would Democrats have had any reason to offer the slightest compromise? To whom did they offer such a compromise? Your reasoning makes no sense. The ACA has nothing whatever to do with a “solution in the middle”.
I believe ACA changed the rules and created an uneven playing field. Never said there was any compromise or middle ground. However the issue that Cranky has written about and his company of 4 employees would likely have had trouble buying insurance before ACA too.
Joyce
fd – Of course it was a compromise; everything in politics is a compromise in a democracy (except for those who refuse to compromise, in which case gridlock ensues). The Dems, frankly, should have powered through with something more complete, but they didn’t. Perhaps it was cowardice or perhaps it was an attempt to truly build consensus, but it was a mistake. This is better than what we had before, without question in my mind. But it didn’t go far enough.
American Civics 101 – The United States is a republic not a democracy.
Why would you thank Obamacare for this? Obamacare added another option for health insurance, which doesn’t help Cranky, but it doesn’t hurt either.
Don’t your employee’s have access to insurance through the ACA?
Hush with facts!
I think if you read the article, you will note the the business has employees in multiple states and not enough in any one state to meet the insurance company requirements for group coverage. They would also like to take advantage of government (tax?) incentives but due to being a small business with employees scattered seems to be running into road blocks. Additionally employees likely would like the premiums to come out of paycheck “pre-tax” and how do you do that if you have 50 employees in different state exchanges???
Very complicated for a small business trying to do the right thing while watching their own expenses….
Ingvar Trigvie – My employees do not. In the article, I linked to my previous post on this subject, which is here:
http://quickbooks.intuit.com/r/healthcare-and-benefits/in-the-trenches-health-insurance-challenges-for-a-nontraditional-business
That’s why I can’t get anything for my employees.
Get the quotes from the PEOs. I found that the savings in medical costs that they can get offset their fees. Get multiple quotes as prices vary greatly between the companies once you add in all of the costs
From Karin’s Computer
Very loaded post. What state? Number of employees? Full time or other situation? Did you check with your state’s SHOP market via a insurance agent?
ShoNuffHarlem – In this article, I linked back to the original post I wrote with details of the business:
http://quickbooks.intuit.com/r/healthcare-and-benefits/in-the-trenches-health-insurance-challenges-for-a-nontraditional-business
Though I don’t think I mentioned number of employees. I have 3 full time and 1 part time as of now. And yes, I’ve gone through every possible method imaginable including a broker and Covered California. No dice.
What a political minefield! This shows the ACA hasn’t gone far enough. Leaving it up to the states isn’t enough. The exchanges need to be on the federal level. The ACA doesn’t yet recognize that companies are more and more going virtual beyond physical boundaries. Insurance exchanges need to do this as well.
Andrew mondt – Amen to that. While I personally think single payer is the right way to go, a federal exchange would at least fix this problem for me so it would be a big improvement. This is definitely a big hole in the program and as you say, companies are going virtual more often so it’s a hole that’s going to grow bigger.
Would a better system be one where the tax implication is removed completely? No pre or post tax dollars to worry about. Otherwise, I’d choose single payer over the crony socialist/capitalist hybrid monster we have now.
Eric – If taxes are in the equation, there is an easy solution for that.
You should be able to, as an employer, provide tax free money to pay directly for individual plans that employees arrange. Really though, this is just such a messy patchwork of ideas. I really think it should be decoupled from employment entirely and should be considered a basic right.
But of course, there are plenty of people who hate that idea (until they become senior citizens at which point Medicare magically becomes the greatest thing ever).
Have you tried TriNet or Administaff? They pool many small businesses together to provide more purchasing power for benefits. I used Administaff for a previous small startup and they saved us money. The rep I used has gone on to TriNet. I can connect you with the rep I used if you’d like.
Haj – Yes, Trinet. It’s just very expensive for what I need. But so far, it’s the only option I’ve found.
We should have just made Medicare universal but that would be socialism…..sigh. Your employees should be thankful for the freedom and liberty they now enjoy by being uninsured. Yea ‘Murcia!
Obama wants to insure your employees. He wants to make them vote and gather food stamps, make tractors for the people’s farm, etc. etc.
You can’t be the only employer in this virtual world with this problem, you would think some insurance company would go after this business as a sort of group employer co-op as long as all workers were in the USA.
The state-by-state regulation of the insurance industry was in place way before Obamacare. It’s been the norm for decades because that’s how the industry and state regulators like it. Over the years, there have been many attempts by the federal government to regulate the insurance industry and they’ve routinely been beaten back by tradition and the special interests that benefit from the status quo. People fear any kind of change, especially when they benefit from the way things are done.
Wow, I had no idea Cranky had some many unenlightened readers. Sure this sucks, but to disregard the good things the ACA has done is mind-boggling. (No more Pre-existing conditions, extending your plan if you leave your job, and the millions now covered with health care.)
I agree we should go even farther, but the tea-partiers are holding us back. The exchanges need to be on the federal level. I fully agree the ACA doesn’t yet recognize that companies are more and more going virtual beyond physical boundaries. Insurance exchanges need to do this as well. I thought Republicans were pro-business, but apparently they are only pro-“big business”.
Cranky, this might be off topic, but how on earth are you classifying someone who works in another state as an employee instead of a contractor? If they work in another state, they are most likely given enough flexibility in their work to where they would be considered independent contractors and not employees.
I am about to relocate from one state (my employer’s HQ state) to another and will be working from home. Do you think that should be making me a contractor? I am doing the same job as before.
Jim – Where you live has nothing to do with your status as an employee vs an independent contractor. The people who work for me have set hours just as if they were in my state. You can see California’s rules on this here: http://www.dir.ca.gov/dlse/faq_independentcontractor.htm
But it doesn’t matter what state you’re in.
It’s not that you CAN’T get insurance. You just don’t want to pay for it because it is expensive, I have a small business in Texas so I know.
Sorry Brett but this is part of the cost of small business.
Let me expound on that a bit.
Brett, it’s not that no one will provide insurance for your employees. It’s just that no one will do so at a price you are willing to pay. You CAN find insurance for them…I know, because I do. I have a small business in Texas, and I pay for individual health insurance plans for my employees. It’s EXPENSIVE to say the least, but to say “no one will insure my employees” is quite false.
No one OWES you insurance at a reasonable price, any more than anyone owes you internet service or telephone service. It costs what it costs, and if you can’t make money on the business, it is on you or your business model. Large companies have a big advantage…that’s just reality. Believe me, I know. But we as small businesses also have some advantages in that we can be very lean and nimble, and avoid large overhead costs.
And before any of you jump on the political bandwagon, keep this in mind. I’m a Democrat. A very lonely suburban Texas Democrat, but a Democrat nonetheless. I support the ACA, and I would rather have single payer as well. I think we SHOULD have universal health care. That said, it’s not reality right now, and high health insurance costs are a business reality. That reality affects what I can pay my employees. It’s their reality too.
But again, no one owes me, Brett, or any other business subsidized health care costs. If you can’t afford to be in business, go back to work for someone else. Just business reality.
John G – I’d suggest actually reading the post before you make a false accusation. Nobody will provide my employees with insurance at any cost.
The issue appears to be that I am a California company but my employees are elsewhere. And nobody will insure that. You might want to back off from your rant until you understand the facts here.
Buy them individual policies Brett. Then it doesn’t matter where the company is located.
The cost is not any different from a small business group policy.
This is the way I do it. The insurer doesn’t care who writes the check, and I write it off as expense.
Brett if you need more info email me and I’ll tell you who I use. With individual policies it doesn’t matter that you are in CA. It’s just that these policies are pricey.
John G – What you are suggesting is illegal. Employers are not allowed to pay for individual plans. The only option is to increase wages and then let people know that they are on their own for healthcare. For more information on this topic: http://www.dol.gov/ebsa/faqs/faq-aca22.html
First, I pay for individual plans for my employees in Texas…I have for years…and neither my CPA nor the IRS has ever said a thing about it.
The link you gave shows that you can’t give employees money in lieu of coverage. What I read doesn’t indicate that you cannot simply buy individual policies for them.
Lastly, the ACA doesn’t apply you anyway. You (as I do) have less than 50 employees. The ACA provisions are intended to make employers provide health care coverage to a basic level…but small employers are exempt from that requirement. So if you want to pay for individual policies for your employees, you CAN do it.
If you have literature that specifically bars a small employer from buying individual policies for their employees I’d love to see it. What you posted is not that.
John G – I’m sure you have been doing this for years, and others have done the same. That’s because it used to be legal, but that changed when the ACA went into effect. If you don’t like that source, how about this one from the IRS…
http://www.irs.gov/pub/irs-drop/n-15-17.pdf
It very clearly states that you as a small business can’t do this, but the penalties won’t be enforced until June 30 of this year to allow people time to transition. If you continue doing what you’re doing, you can be liable for some very hefty penalties.
Can you just make direct payments to the insurance company of each employee. The employee can get the Affordable care act individually and you can pay each if the insurance companies directly. Peace B, Hotz
billhotz – There is nothing that allows you to put pre-tax money into an individual health plan as would be the case if we were just paying for an employer-based plan. (There are some who try this, but the IRS says no.) So we would just have to increase wages and pay taxes on that. Then it would be up to the employee to decide to put that money toward healthcare.
I feel your pain Brett. And soon we will all feel more pain when this post gets picked up by the left/right blogs and the yahoos who could care less about flying issues pile on with their ideologies…