Health Care Solutions For Real Life

January 1, 2010


"Share Your Story" is a regular feature of Covertheuninsured.org that asks readers to share a personal story about a problem due to the lack of health insurance.  Unfortunately, the column stops short without giving a response that will best address the current crisis.  MedSave.com, a provider of low cost and temporary health insurance, steps in to offer solutions through OnlineAdviser.

Original story posted at http://covertheuninsured.org/stories/index.php?StoryID=41

Story #41  Joe Ceca, owner of "Joe" coffee shop in Philadelphia.  Joe pays the medical expenses of his employees but has no insurance for himself or his employees.  He sometimes goes without medical care that others take for granted.  Even though Joe is basically healthy now, independent studies show that people who are chronically uninsured tend to develop more serious health problems over the long term.

In Philadelphia, the largest health insurance company is Independence Blue Cross / Blue Shield that costs over $450 per month.  Similarly priced programs are offered by Aetna, another popular insurer in Philadelphia.  This same organization has excellent free of low cost health insurance programs for those with incomes less than about $15,000 per year.  But working people at Joes coffee shop are squeezed in the middle, unable to afford the regular coverage but earning too much for the cost-subsidized programs.

OnlineAdviser: Since Joe is already providing some health benefit payments to his employees, he should adapt a Health Reimbursement Arrangement (HRA) to allow all of the payments to be made on a tax-free basis.  This saves on income taxes, worker's compensation payments, FICA, FUTA and even the nasty Philadelphia wage tax!  The total tax savings will be about 40 cents on every dollar Joe spends on health care for the employees.  If we assume, for example, that Joe pays $500 per employee per year in health expenses (this is a typical out-of-pocket health care expenditure for a young worker) then the total annual tax savings would be about $1,200.  The administrative cost of this benefit for five employees is only $300 per year at www.FreedomBenefits.org so Joe will still be $900 ahead on an after-tax basis.  An HRA plan can also be used to reward employee retention since benefits can stockpile month after month and then rollover into the next year.

Joe and his employees need health insurance, but cannot afford the Blue Cross rates.  The best value in Philadelphia health insurance comes from the "Value Plans" - ValueMed and ValueHealth.  Value Med is primarily an outpatient insurance and value Health is a hospitalization policy.  These policies are designed to work together in the same way that Blue Cross coverage integrates with Blue Shield.  The Value plans provide limited benefits but cover the most common medical expenses with no deductible or co-payment.  The policies have a shorter than usual 12 month waiting period before pre-existing medical conditions are covered.  Since this insurance has no deductibles, it may reduce Joe's out-of-pocket costs for employee health care.  The cost is about $150 per month, or about 1/3 of the price of the Blue Cross coverage.  This price should be within reach of all working people.  Assuming a 40 hour work week, the cost of insurance works out to about $.87 per hour for each employee - something they can probably pay for using the coffee shop tip jar alone!

Student insurance policies, short term medical insurance and inbound immigrant policies available on MedSave.com to Philadelphia residents also offer excellent value in the $100 to $200 per month range.  Any of thee can be purchased with HRA plan money or with other funds business or individual. 

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