Karen and Bill started a business three years ago. They kept their health insurance through Bill’s previous employer, but COBRA ends September 30th.
We were
asked to help them decide if they should buy a policy for just their family of three or a group plan for the business, which employs 10 people.
the COBRA premium for Karen, Bill and their son has been $1,600/month; the cost of similar coverage would be about $980/month.
unlike premiums paid for
individually owned insurance, group premiums are deductible.
of their 10 employees, four are part time (ineligible) and two are under age 26 (still covered by their parents).
the single premiums for the other three employees average $378/month; the business would only be required to pay half that. If
uninsured now, they are taxed 2% of their income. If they’re buying on their own, it is with after tax dollars and, their Marketplace subsidies are less than the 50% their employer will pay.
In short, through a group contract, Karen and Bill can insure their family and 3 employees for the same amount as their COBRA premium. And, reduce everyone’s taxes to
boot.
