Wells Fargo Small Business Roundup See entire article
Group healthcare represents uncertain costs--it's an open-ended obligation... With these plans, your premiums increase any time an employee, their spouse or children get sick. Individual plans, on the other hand, are permanent. Once you have one, your premiums can't be raised due to illness or claims history.
In 2005, the federal government made it possible for businesses to offer health reimbursement arrangements (HRAs), which paved the way for business owners to offer individual plans. Through HRAs, you can offer ‘defined contribution healthcare,’ giving your employees a fixed amount of money to buy their own policy, Pilzer says. And your contribution is completely tax-deductible to you and non-taxable to your employees.”
Group plans were once considered much more inexpensive and efficient than individual plans. “Group healthcare represents uncertain costs—it’s an open-ended obligation,” notes Pilzer. “With these plans, your premiums increase anytime an employee, their spouse or children get sick."
State-guaranteed coverage...used to be called ‘state risk pool’ coverage,” states Pilzer. “In almost all states, it’s the same coverage you would buy in an individual policy—so business owners can still offer these people coverage—but it costs about twice the price only for the sick person in your family.