A Good Listener:

When you’re shopping around for health insurance, you want your agent to be dialed in to what you’re saying about your past medical history. We’ve all heard that the number one cause of bankruptcy in the US is medical expenses. So, your agent needs to respect the 75% listening, 25% talking rule when communicating with you. It’s paramount that your agent asks the right questions to cover all potential exposure points. You’ll know that you have an insurance agent that values you when they’re asking thoughtful questions and focused on your responses. Pinpointing a plan across many carriers takes great listening skills; your agent has a responsibility to ensure that the coverage you have will mitigate the most out-of-pocket exposure for your family if something does happen to you.

Clarity and Knowledge:

An insurance agent that values you will master their product knowledge because they’re aware of the fiduciary responsibility to their clients. The purpose of having an agent is for them to explain your policy options clearly and concisely. As a potential client, make sure you’re asking questions if anything is confusing. An agent that values you will be more than happy to give you the answers you seek. If they are not, they most likely are more worried about the sale and not your needs. Whatever the budget for health insurance, a knowledgeable agent should find some form of coverage for you. They’re genuine in their approach when explaining your policy options. If you’re speaking with an agent who won’t take the time to help you personally or at least refer you to someone who can, they’re limited in their knowledge and most likely commission-minded. Furthermore, you may want to inquire into finding an independent broker. These agents are appointed with dozens of insurance carriers and can build policy options based on your needs and not one company’s products. In this manner, you are exposed to greater clarity through options and choice. An agent who provides value in these ways is friendly, non-combative, and committed to helping you.

Staying Connected:

If your agent has met the above two criteria, it’s most likely a good idea to keep them around. They are now aware of your medical history, and you have both established mutual trust and understanding. An agent that values this long-term relationship will reach out to you periodically throughout the year. Their purpose should be to review the policy and make adjustments if necessary. Your agent should want to know whether or not the policy has provided value. This is also a great time for you to ask any questions. Additionally, if you currently have an agent who issued you a policy but hasn’t contacted you since, you may want to reach out or consider getting a new agent. Your agent should demonstrate these qualities so that you know your family’s health is covered to the fullest extent.

You can, but should you?

There’s a dark stain over the insurance industry for consumers searching for quotes online. Families and individuals are aware they need to carry health and life protection but dread entering their information online, consequently experiencing the bombardment of phone calls that follow. It’s so bad some people would instead go without coverage than speak with a broker over the phone. When in reality, all it takes is working smarter, not harder.

Some people will advise you to buy your own auto, home, health, life, or any other insurance. They will tell you horror stories about the number of calls you’ll receive if you submit information online. They will present a convincing argument, and you’ll be tempted to accept their advice. I urge you to resist that temptation.

It’s no surprise that many people are turning to self quoting websites and applications. The appeal is undeniable. There’s nothing inherently wrong about this approach, and it does save the consumer the headache of having to speak to countless agents. However, should you buy insurance without speaking to a licensed broker? It’s fine to quote yourself and see what’s out there in terms of options, but then proceeding to purchase that insurance without educational guidance is extremely risky for the consumer. When you use past experiences, personal knowledge, and stories heard from friends to make an informed decision on your insurance; the result tends to be medical debt or bankruptcy.

A licensed agent or broker has a fiduciary responsibility to you. They are mandated by state and federal law to undergo licensed certification. While you may not have had pleasant experiences in the past, having a broker perform a needs analysis to personalize the policy is a better alternative. Just like any other profession, some paid attention during class, and others did not. It isn’t appropriate to blanket statement all insurance brokers as untrustworthy.

Here’s your solution to avoid entering your information online. Instead, reach out to family members and friends. Ask them whom they use for their insurance needs and their experience with their broker. If you can’t find a family or friend who uses a local agent or broker; reach out to colleagues and people within your circle of influence for guidance. By doing so, you are acquiring a real person who is aware of your personal needs and whom others trust. It’s an ideal win-win situation between a trusted broker and client. You leave feeling confident in your policy because you are informed, and you’ve supported a local small business owner and their family. It may not be the fastest solution, but should it?

When the world is more efficient, we’re all happy. Quicker load times, faster test results, high-speed internet. The need for convenience and expedience permeates everything we do. There’s relief in knowing you can quote and compare prices without receiving dozens of calls.

However, when you go to purchase your insurance slow down, consult a professional, ask questions, and then fill out your application with the knowledge you’re protected and supported.

Health insurance jargon can be the hardest to understand for consumers. That’s why you have a broker who goes to work for you and explains your policy options with clarity. However, not all brokers work ethically. You may not have an insurance broker who values you and may not elaborate on your policy limitations. The omission of these limits is illegal and should result in the termination of that broker. In contrast, the insured typically doesn’t take legal action, and the broker makes his or her desired commission.

This is not to say that all health insurance brokers operate in this zone of immorality. Just as with any profession, there are good and rotten eggs. Your moral compass and ability to judge a person’s intention is a significant factor – people can typically smell a sleazy salesperson. Below, are the most common limitations obscurely mentioned in health insurance policies. This information should adequately equip you for when you are asking questions of your broker.

Here’s a screenshot from the summary of the benefits of an insurance carrier’s product:

*Note – these limitations do not exist in all policies. Ask your broker.

The list of benefits above is towards the end of the policy summary. Most people are interested in seven factors when it comes to their health insurance:

Deductible/coinsurance/max out of pocket, doctor visits/specialists/urgent care, the network, prescription coverage, preventative/wellness coverage, emergency room fees, and ambulatory services. If your insurance broker goes over those seven things, this is how the policy would look and sound:

• Choice of $500-$10,000 deductible/max out of pocket (1 million in coverage)
• Choice of 70/30, 80/20, or 100/0 coinsurance
• Unlimited $25 copay to doctor, specialist, and urgent care
• PHCS Network (PPO)
• $50 copay for annual wellness/preventative checkup
• ER – subject to deductible and coinsurance
• Ambulatory services (above) – $500 per transport

Most people would agree that those seven things sound fantastic for health coverage. You have all your daily doctor needs taken care of and one million dollars in coverage, right? Wrong, let me show you a scary breakdown if you had an appendectomy while being covered by this policy.

On average, the “Fair Price” for an Appendectomy lies somewhere between $7,000 and $25,000 (may vary due to zip code). If there are complications, it could be upwards of $35,000 or more. Here’s a breakdown of the services and their estimated costs. You can always check on any surgery, and it’s price by visiting Healthcare Bluebook.

• Hospital Services – for a 2-day admission, it’ll cost roughly $9,700.
• Physician Services – the fee for procedure and routine postoperative care costs around $1,400.
• Anesthesia – the price for an average surgery time of 1 hour and 15 minutes costs about $750.

This cost adds up to the lower end of about $11,000 for an appendectomy. If you look above at the example policy, you’ll see that for the entire coverage term an appendectomy will be given a $2,500 coverage benefit. Even though your plan has a deductible, coinsurance, and max out of pocket; there’s a specific limitation for appendicitis. With this knowledge, the insured will be left an $8,500 bill as an out of pocket expense! Keep in mind; these numbers are on the low end with no complications.

Of course, it’s always better to have health insurance instead of going uninsured. With insurance, that remaining $8,500 for the appendectomy may negotiate to a lower bill. Policygenius.com does a great job explaining the functionality of network negotiated rates. Without insurance, you would be paying the almost full retail price for your medical surgery, which is a terrifying thought!

You already have so many priorities to worry about as a small business owner, health insurance does not need to be an added stress. When it comes to covering you, your family, and potentially your employees – these are the options you have at your disposal.

Affordable Care Act:

Commonly known as Major Medical insurance, the ACA has several components. ACA subsidies are determined by gross annual income. It’s often expensive without premium subsidies. The income range to receive a subsidy largely depends on how many people are in your household, your state, and the zip code. Using HealthSherpa.com, you can easily find out if you’ll qualify for any subsidy.

Here are the pros of the ACA:

• Possesses the 10 essential health benefits.
• May qualify for Cost Sharing Reduction on top of the subsidy.
• These plans are guaranteed issue: there is no review of the insured’s health status or pre-existing conditions.
• Broad coverage for many generic, brand name, and specialty drugs.

Here are the cons of the ACA:

• Often expensive without premium subsidies.
• Very high deductibles.
• Many plans limit the insured to a narrow network of healthcare providers. This quick article does a good job explaining all three networks.
• Cannot enroll in a plan outside of the annual Open Enrollment Period, unless you’ve experienced a Qualified Life Event (QLE). If you have, you are given a 60-day window to acquire an ACA plan.
• If you’re traveling outside your state, you only have emergency coverage.

Short Term Coverage:

Short Term (STM) coverage operates similarly to the ACA or Major Medical plans. Nowadays, STM policies have been given options that extend from 3 months to 3 years. If you’re not getting insurance during open enrollment or don’t have a QLE; a short term plan is most likely going to be your best option as a small business owner.

Here are the pros of STM:

• Affordable premiums that can cost substantially less, sometimes even half of what is charged for an ACA plan.
• Even employees can benefit from STM if they’re in between jobs and need insurance coverage. This is a much better choice than paying the infinitely more expensive COBRA.
• STM insurance has a broad network (typically PPOs) of healthcare providers and is widely accepted at many of the top hospitals in the U.S.
• Year-round applications for insurance that are NOT contingent on the Open Enrollment Period.
• As of 2019, the penalty for not having Minimal Essential Coverage is no longer in place.

Here are the cons of STM:

• It does NOT provide coverage for pre-existing medical conditions. (Some guaranteed issue plans do offer prex coverage after a 3-month, 12-month, or 24-month waiting period. Talk to your broker to figure out options.)
• Pre-existing conditions are considered part of the medical underwriting process and can result in a denial of coverage. The National Association of Insurance Commissioners (NAIC) released a great “What You Need to Know” article for health insurance.
• Typically Rx coverage is not built into the STM plans but can be added as a stand-alone prescription drug policy.
• Some benefits, like maternity coverage, are not covered and excluded. However, you may ask your broker if there are maternity policies that can be added to the STM.

Fixed-Indemnity Insurance:

Unlike the other two options, a fixed indemnity (or fixed benefit) policy operates on what’s called a “first-dollar” amount. For more details, United Healthcare does a great job explaining what exactly a fixed-indemnity policy will do for you.

Here are the pros of fixed indemnity:

• Since these policies pay “first-dollar” or a fixed amount for each specific event; they tend to not have deductibles. (Some may if you stay overnight in a hospital.)
• Affordable premiums and most plans include additional wellness benefits such as Teladoc. STM also offers this benefit most of this time through their association.
• Prescription discounts often included and these policies are also not limited to the Open Enrollment Period.
• It can be a good alternative to a short term policy in the event your budget is tight. However, you want your broker to do their research in your state to see how much hospital costs, etc.

Here are the cons of fixed indemnity:

• Pre-existing conditions will most likely not be covered within the first 12 months of coverage.
• Capped medical benefits coverage at a rate much lower than major medical plans. Fixed indemnity plans don’t have what’s called “stop-loss”.
• If your medical expenses do not fall under specific events, then there will be no coverage payout.
• General illnesses like diabetes or conditions such as pregnancy don’t have benefits.

Regardless of what policy you choose to purchase for your health insurance, make sure you have a knowledgable broker who can simplify these definitions and pinpoint which one best caters to your needs. The purpose of health insurance is to prevent probable medical expenses in the future. An in-depth understanding of your policy eradicates needless stress or worry, and allows you to spend more time building your business with confidence.