by Michele Newbern Gillis
Staff Writer
It’s great to be your own boss but there are some not-so-great things that come with it.
Like not having health insurance.
“The cost is astronomical,” said George Banning of Coldwell Banker Walter Williams Realty, who works with his wife. “Our annual expenditure is almost $16,000 and has a deductible of $5,750. We have to sell three houses each just to cover our insurance costs.”
His solution: pay it.
Andie Patton, now of the LandMar Group, faced the problem first-hand.
“For years, I had just hoped not to get ill as getting insurance was so difficult and expensive,” she said. “I had a major medical policy with Blue Cross/Blue Shield in case of cancer or big illness. That policy sported a huge deductible to keep the rates low.”
Her solution came as part of a bigger commitment: she got married to a local television station manager, who had good coverage through his company.
Some carry coverage from previous jobs.
“I am retired from AT&T and have dental and medical benefits,” said Susan Pyles of Cornerstone Homes. “The cost goes up every year, and this year not only did the cost go up, but I have to meet a $2,500 deductible to qualify for doctor and prescription copayments. I am healthy, so I guess that is a good thing. I just do not like paying monthly and then, when and if I need it, I have to pay more. I know I am fortunate to have coverage that does not cost an arm and a leg.”
Health insurance is a problem for almost anyone today but it’s more for the typical Realtor who’s an independent contractor.
“A self-employed person needs health insurance as much as anyone,” said Dave Roush, CEO of Insurance.com. “Most people get these types of insurance through their employers, but unfortunately this is not an option for independent contractors. You’re your own boss, but that also means you have to supply your own benefits.”
The National Association of Realtors has taken the issue to Congress.
NAR President Pat Vredevoogd Combs said, “28 percent of the nation’s 1.3 million Realtors have no health insurance and by far the predominant reason given is cost. The percentage of uninsured Realtors is almost double that of America as a whole. This is a serious problem for us.”
NAR encouraged Congress in a meeting last month to examine whether the nation’s system of state-based coverage for individuals has outlived its ability to effectively pool risk on the scale that is necessary to offer an affordable product to the self-employed and small business community.
“NAR believes there are ways of expanding the pool without creating unintended consequences and ways to bring more and better competition to the state markets,” added Combs. “We believe the lack of uniformity and the complexity in state mandates have increased costs and contributed to the withdrawal of insurers from states where they once operated. Non-employer groups need to be allowed to develop affordable and uniform national insurance programs tailored to the specific needs of their small business and self-employed members.”
According to Insurance.com, options for independent contractors may be limited to individual health insurance coverage purchased directly from a provider or group coverage purchased through a professional association or civic group.
“Individual health insurance covers medical expenses on an individual basis,” said Roush. “When you apply for individual insurance, your ‘risk potential’ may be evaluated through a series of medical questions and/or a physical exam in order to determine whether you qualify for health insurance and how much it will cost.
“Individual insurance is typically more expensive than group coverage but it may also provide more freedom to customize the policy to suit your personal needs. Most people get group health insurance through their employers, but you’ll have to look a little harder to find group coverage.
“Trade and professional organizations sometimes offer group insurance coverage, as do some civic groups and churches. With group coverage, the premium from group
insurance is calculated based on characteristics of the group
as a whole. All eligible members of the group can purchase insurance coverage under the plan, regardless of age or physical condition.”
Joan Galletta, employee benefits consultant for JP Perry Insurance, helps find health insurance for independent contractors who don’t have access to group insurance.
Watson Realty has had its employee benefits for their administrative staff and other insurance coverage with JP Perry Insurance for a long time and now the company is helping agents find coverage as well.
“We help the Realtors find appropriate insurance through the individual market,” said Galletta, who is also the Florida Association of Health Underwriters’ state legislative chair. “We find out what their particular needs are, including if they are in childbearing years or if they have any physical ailments or chronic conditions. What insurance carrier will cover them on an individual policy or what plan is going to suit them best, and what that plan will cost, depends on the person, their health and their needs.”
Some real estate companies offer health insurance through an independent broker and others allow the agent to become an employee, which entitles them to benefits, such as health insurance.
“Prudential will begin offering its associates a group health insurance plan that is proving to be a huge benefit to our agents,” said Christy Budnick, executive vice president of Prudential Network Realty. “The plan will be a la carte and the agents will be able to log onto our Intranet site to obtain estimates and purchase the insurance.”
In the past, they offered an option through a financial planner with Prudential Financial but it was not a group plan. Those who needed a group plan went to sources that were recommended by Prudential and others to find insurance that met their needs.
Exit Realty found a way to help its agents.
“Health insurance for independent contractors like Realtors is a serious issue,” said Brent Fonner of Exit Realty Experts. “Steve Morris, CEO and founder of Exit Realty Corp. International, realized this issue and purchased a mortgage brokerage called Alta Financial.
“Exit Realty agents have the opportunity to become loan originators and employees of Alta so they are eligible for very affordable Blue Cross and Blue Shield health insurance. Blue Cross offers several different plans for the individual family or the entire family. Deductibles vary depending on the plan chosen.”
Walter Williams of Coldwell Banker Walter Williams Realty said his Realtors can become employees of the company after they meet a certain performance level and are then eligible for benefits through the company. It gives them health insurance, the company’s 401(k) plan and other benefits.
“We allow our independent contractors to become employees of the company and therefore they can participate in our health plan,” said Williams. “We also have an agreement with a local company, Mantay and Company, that will provide insurance for independent contractors.”
Colliers Dickinson’s agents can join the company’s group plan.
“Those who need insurance as independent contractors are on our plan,” said Beth Lipko, office administrator for Colliers Dickinson. “The others are usually covered on their spouse’s plans.”
Even the Florida Home Builders Association is recognizing that getting health insurance is hard.
“Florida Home Builders Association is offering a mini-medical program through their subsidiary, Florida Home Builders Insurance,” said Portland Stuart, membership director for Northeast Florida Builders Association. “It’s not catastrophic so things like a heart attack are not covered, but it will cover regular doctor visits, prescriptions, annual exams and things like that.”
An independent contractor’s company has to be a member of NEFBA to be eligible for the plan.
“Their Realtors who are independent contractors could then join NEFBA as an affiliate member for $160 a year which also gives them a Sales and Marketing Council membership,” said Stuart. “Then they are included in the NEFBA membership as an affiliate they are eligible for this program. For a single person, health insurance through Blue Cross and Blue Shield is about $300-$400 a month. This plan is $60 a month.
“It’s not ‘catastrophic’ but they will save on doctor visits and prescriptions.”
The majority of people either have access to group insurance or can qualify for an individual policy. But, what happens to those who can’t get either?
“In some states, individual insurance is guaranteed issue, which means if you apply for it, the carrier is required to issue the policy,” said Galletta. “It’s not that way in Florida and it shouldn’t be. In states that have tried to make individual policies guaranteed issue, insurance carriers have simply stopped doing business because you’re telling them that they have to write a bad risk.
“The answer to the problem of access to individual health insurance for people who are ‘uninsurable’ is for the state to create and fund a ‘high risk pool.’ Florida is working on that. Legislation has been passed creating the Florida Health Insurance Plan, a state subsidized high-risk pool.”
Independent contractors who don’t belong to a group or get turned down for an individual policy are currently out of luck.
“It is still being decided how the state is going to fund the Florida Health Insurance Plan, our ‘high-risk pool’. Florida is one of only six states that does not have some mechanism for providing access to health insurance for high risk individuals,” said Galletta. “Thirty- three states currently provide this through ‘risk pools’. The other 11 states use other types of programs, such as Medicaid buy-in or guaranteed issue individual coverage, to address this issue. Florida needs to pass legislation to fund the Florida Health Insurance Program.”
Galletta said there is some good news for independent contractors.
“We now have carriers in our state that will issue an individual policy on someone who is not in perfect health,” said Galletta. “The premium is ‘rated up’ but they can still buy insurance. Instead of saying this is our product and these are our guidelines and if you don’t cut it, we won’t insure you, some carriers will now cover the individual, but at a higher premium. This is called ‘rated up’.”
What are some other local independent contractors doing?
Many have found insurance through various independent brokers such as Standard American, Humana, Blue Cross and Blue Shield, Aetna, Cygna and Golden Rule, a United Healthcare company.
“I have Standard American and I got it from an independent insurance broker,” said Regina Sooey of Watson Realty. “I did not have trouble getting insurance because I am young and healthy and have no prior problems. I pay $140 a month, but the coverage is very light and I have high co-pays and not a lot of extra benefits like dental/vision or prescription. I think I have some discounts on those things. My insurance covers the catastrophic stuff and my yearly doctor visit.
“The other good thing is that I don’t have to choose from a list, as I can use anyone anywhere. Since I am young and healthy, I don’t need a ton of heavy coverage. If I thought about insuring a whole family with kids, I’d probably have to do more research because I’d want better/more coverage.
I used to have Humana, but it kept going up every month, until it got over $220 and I figured I could handle less coverage for more money. Make sure to read what it covers.”
David MacInnes of Beachside Mortgage Services said he found a Health Savings Account to fit his needs best.
“For those in good health, try a Health Savings Account,” said MacInnes. “Most insurance agents can help you look through the different plans. The HSA allows you to save money tax deferred, coupled with a high deductible insurance plan. You have the benefits of insurance negotiated prices or a cash discount from your health provider. It also puts the onus on you to find the best bargain from a dentist, optometrist or pharmacy.
“This should be the direction of health insurance in this country, so the earlier you start the more money you have saved. As your savings account grows, you can adjust your insurance from 100 percent coverage to an 80/20 plan to save even more on your premiums. If you have to switch to another type insurance, the HSA remains to pay medical payments until you exhaust the account. It is a little nerve racking to start, but four and a half years down the road, I couldn’t be happier with my plan.”