The Power of Small In American Health Care Finance

By Bill Rusteberg

Want to escape punishing government oversight of your employee health plan? Want to reduce or eliminate your second largest company expense? Become a small employer and be happy.

The government defines small employers as ones with less than 50 employees. These employers don’t have to comply with the Affordable Care Act. They can do whatever they please when it comes to providing employee health insurance – it’s a freedom large employers don’t have anymore.

Small groups are:

  • Not required to offer health insurance
  • Not required to pay for health insurance
  • Not required to cover pre-existing conditions
  • Not required to cover pregnancy or other life style condition

Small employers outnumber large employers. And the number is growing.

According to the 2020 Employer Health Benefits Survey by KFF, 45% of small firms don’t offer health insurance benefits. Some of those providing health care coverage offer non-traditional, non-ACA compliant plan designs incorporating direct primary care, cash pay models and financial assistance programs.

Ignoring traditional managed care plans and associated government mandated benefits, groups both large and small incorporating direct primary care and tax funded financial assistance programs routinely enjoy employee rates below $200 per month. These common sense plans cover 80-90% of one’s health care needs.

In cases of employees needing more care, which averages 5-10% of any given population, accessing the individual health insurance market exchanges/marketplaces solves their needs. Pre-existing conditions are covered immediately. Many, 60% or more, will qualify for government welfare in full or in part. Government reporting shows more than 90% of the 15.7 million people enrolled in individual health plans through the exchanges/marketplaces nationwide are receiving government welfare assistance.

There is a lot to be learned from small group strategies.

Large Groups Are Adopting Small Group Strategies

Its obvious to anyone with half a brain that it pays to be a small employer in these days of mounting government interference in health care. Large employers are taking note. Some are dividing their company into multiple corporations each of which employ fewer than 50 employees. Others have purchased traditional small group insurance for plan members through one of their two corporations as a dumping ground for high cost claimants leaving the healthier plan members on their large group corporation’s health plan.

The Case Of A Small Group Rescue

A 200 life case in College Station, Texas has done exactly that. They have two corporations, one with 195 employees and the other with 5. The later has high cost claimants while the former doesn’t. Their 195 life self-funded group will never experience lasers and will enjoy lower claim costs. This silent practice of transferring high cost claimants through the pockets of someone else is more common than you think.

Government Mandates – Loopholes To The Rescue!

Loopholes abound under the “you have to pass it to know what’s in it” Affordable Care Act. With their financial backs to the wall more plan sponsors are looking for help navigating the complicated maze of Loop Hole City.

Hardwired insurance advisors and their lawyers are standing by ready to save desperate plan sponsors from financial ruin and bankruptcy brought at the hands of an out-of-touch political ruling class and their bureaucratic lackeys in Washington.