January 25, 2012


Our guest asks:

I am trying to find information on how much a small group or individual insurance plan would cost. The company I am inquiring information for is a small business of 10 employees looking to extend benefits to its employees and interested in the cost both to the employer and the employee. The company is located in Missouri. I'm interested in (1) a small group plan, or (2) and individual plan that the company would subsidize.

OnlineAdviser responds:

The federal health insurance clearinghouse is a great source of all the available insurance options and pricing for both group and individual insurance. There are two easy options to access all of this this information:
    - www.Healthcare.gov is designed as an online self-serve resource available free of charge
    - OnlineNavigator (www.OnlineNavigator.org) offers personal professional assistance at a flat fee.

In most cases the business would wish to switch from defined benefit plan to a defined contribution plan (like a SIMPLE cafeteria plan) in order to be ready to benefit from the changes coming over the two years ahead that will be triggered by health reform law implementation. The cost to set up an flexible benefit employer-sponsored health plan is about $1,000 for a business to make the switch but this cost is recouped quickly in wage tax savings. More information on setting up a small business cafeteria health benefits is available at www.freedombenefits.org. The advantage of this approach is that it would allow either the group insurance or individual insurance (through reimbursements) as well as additional major medical or supplemental insurance options, if requested, to be set up on a tax-free basis within the employer-sponsored health plan. The article "Step-by-step guide to reducing small business health insurance costs in 2012" gives more detail on the procedure necessary to set up a plan with suitable options for the 10 employees.

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