source for health ins for very small group?

[Guest jmarini]

I am the office manager for a company with three full-time ees. We currently have group health ins (a PPO w/$25 co-pay and $1000 ded) w/AMS and our premium seems extremely high: coverage for male age 67, male age 61, female age 44, plus spouses, will be $4,000/month as of our 8/1/03 renewal.

We have one ee in TN, one in TX, and one in NM (ah, the wonders of the internet!).

I am getting quotes from an independent insurance agent in Texas and another independent agent in Tennessee. Neither seems particularly confident, however, that they will get much of a reduction in premium. Does this premium seem normal? I've found several sources that refer to health care costs averaging $5000-$8000 per year per ee. I know "average" is a very broad term but we're getting ready to pay $16,000 per year, which seems like a huge difference.

We're open to PEOs, employee leasing, etc. but run into brick walls because we only have three ees. ADP does our payroll but has a 10-ee minimum for group health. Does anybody have any suggestions? Thank you!

[GBurns]

Have you tried Blue Cross? Their rates should be better and some have a plan than allows coverage in other states.

In any case, Shouldn't the age 67 ee be on Medicare even with an employer subsidy?

[mroberts]

To put in bluntly, groups under 10 lives usually get screwed when it comes to health insurance. And especially in your case since the average age of your employees is almost 60. To further complicate matters, each of your employees is in a different state, which rules out any local health plan for small groups where undewriting might not be an issue. Realize whatever statistics you're looking at are taking companies like IBM, United Airlines and other mammoths into the equation. These companies probably have an average age in the low 40's and have maximum leverage when negotiating their renewals. Are your premiums extremely high? Yes, but looking at the situation, I'm not surpirsed where they are.

One option you might want to look at is having each of your employees go to the local Chamber of Commerce and see if health insurance can be obtained through them via some community plan. Your employees will have to pay for the cost of the insurance out of their own pocket, but you can always make up for it in their paycheck. And if it works, it will definitely be less expensive than $16,000 per year.

[Guest jmarini]

Thanks for the suggestions and we'll definitely explore them. I had talked to my TN agent about pursuing individual health plans instead of a group plan, but he said that pre-existing conditions would not be covered if we all switched to individual plans.

Also, when I said that several sources state that health care costs average $5000-$8000 per year per ee, I should have specified that those figures were specifically for small businesses. For example, the EBRI 2002 Small Employer Health Benefits Survey states that the average cost of health care for employee-only was $3,392/year (www.ebri.org/pdfs/0103ib.pdf). The AARP Small Business Resource Center says that health care for small businesses runs from $4,000 a year for a single person to over $7,000 for family coverage (http://www.aarpsmallbiz.com/index.cfm).

None of these lovely statistics really matter, of course, if we can't find anyone to quote us those prices but it's frustrating to read that something is supposed to cost about 1/3 of what everyone is quoting us. Thanks again for the suggestions and others are still welcome!