Another Health Insurance option for Individuals and Self Employed in Washington available soon

Lifewise Health Insurance Plans of Washington will soon give the self employed in Washington State one more good option when it comes to choosing a health insurance plan for themselves and their families.

For the past two years Lifewise has not been that competitive in the eyes of many health insurance brokers with respect to their rates compared with other health insurance options for the self employed and individual consumers in Washington State. However, starting in 2010 they are offering one particular health insurance plan which will provide good preventative and catastrophic coverage combined with a first of its kind prescription drug benefit, and for a very reasonable cost.

This combination of catastrophic health insurance combined with prescription coverage is something new to Washington State. Whereas before, the self employed and individuals had to choose either a catastrophic plan without prescriptions, or a much more expensive comprehensive plan with prescriptions, now they are able to have both Catastrophic coverage combined with a prescription plan. Formerly, the only other option was to add a separate drug plan from Assurant Health (if one’s health qualified them for it) to whatever other plan was chosen. This was cumbersome and complicated, as consumers had two health insurance plans to manage as opposed to one.

This new offering from Lifewise, called WiseEssentials RX will be available on January 1st for 2010. It will be offered with three deductible choices, $1,850, $2,500, and $3,000. Especially attractive is the $1,850 deductible option, as on that plan the Diagnostic and Lab Work is not subject to the deductible, potentially saving the average consumer several hundred dollars or more a year. One caveat is that the drug coverage does not include all prescriptions however, as the plan is limited to strictly Generic Drugs. Keep in mind though that not all Generic Drugs are inexpensive, as many of the most common still cost several hundred dollars and aren’t available for the much advertised $4 Generic price many chain drugstores advertise. In addition, most (but not all) drugs do have generic counterparts today.

This new Lifewise WiseEssentials RX plan is well designed, fills a previous void in the market, and will provide yet another option to choose from in the wide variety of health insurance plans offered to self employed and individual consumers here in Washington State. Thanks Lifewise!

Small Business Health Insurance Plans don't alwasy provide a financial benefit

While it sounds counter intuitive for a small business to forgo their “Group” health insurance plan and replace it with individually owned employee policies, in many cases it makes sense both financially for the company, as well as for most of their employees. Here’s why this may be true:

“Group” Status: A widely misunderstood belief is that only traditional “Group” plans can be expensed as a company cost. That is no longer true in Washington State. Now, with the proper tax plan documents (a specific HRA plan document under section 125 of the IRS tax code) a small business can reimburse, and thus deduct as an employee benefit expense, premiums their individual employees pay towards their own individually owned health insurance plans.

Cost: There used to be a substantial price break for small business when they formed a group insurance plan. Not anymore. Here in Washington State, rates for both small group community pool plans as well as individual health insurance plans are based on the age of the person(s) joining the plan. Over the last several years, the price of the Small Group plans has gone up faster than the rates for the individually owned insurance plans, leaving the individual health insurance plans priced less than the fairly comparable Group Plan options. In addition, the small changes in the way individually owned insurance plans operate have also given them a considerable cost advantage.

Employees can “own” their plan: With individually owned health insurance, unlike “Group” plans, employees are able to choose and own their plans. When they leave the company, change jobs, or become unemployed they don’t lose their coverage like they do with a “Group” plan, but simply take their insurance with them. In the current economic climate one can certainly see how beneficial this can be!

Less Administration: With no “Group” Plan, the small business has no renewals each year to go through, no participation requirements for employees on the plan, no minimum financial percentage required from the business, etc, the list goes on and on! Plus, the business can still decide who is eligible for the new plan and when they are eligible with the same criteria they used before.

Here is an example of how it can work. ACME Company drops their Group Plan which costs $400 per month per employee and now pays a set $300 per month towards an employee’s similar individually owned health insurance plan. Right away they save $1,200 per employee per year. In addition, the company can “give” part of their premium savings back to employees to cover the first dollar costs (such as copays, part of a deductible, etc.) and still save money! The employee now has greater choice to choose which plan they want (they are no longer tied to just one company plan), and now can receive first dollar coverage towards their health expenses! The company benefits from having a specific dollar amount they will provide to each employee, thus their cost is fixed and doesn’t go up each year unless they decide to increase it! It’s a win-win for the business and the employees.

This is a basic description of how not having a Small Business Group Health Insurance Plan can be beneficial, but there are many pitfalls and caveats to be aware of. Small business owners should always consult My Health Insurance of Washington when putting any type of “Group” or non-Group plan together.