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Health Insurance for Small Business Owners— DC and MD Specific: The Basics | Friday Chatter

October 2, 2020

Oh boy… this is a post I NEVER thought I would be writing! AND right up top, I’ll let you know this: I’m not an insurance professional, never have been, never plan to be, and am only writing this post from my personal experience and notes as I researched my own health insurance plans. Know that this is not advice and you should research each poing on your own. This is simply a sharing of knowledge, tips & tricks I have picked up on my own adventures through various health insurance systems. Always consult a professional. ALWAYS research insurance in your own state.

This is the side of being a small business owner and entrepreneur many don’t see… the technical, the scary, the big decisions, and the totally not fun. That said? It is also TOTALLY necessary. Today, we’re talking all things health insurance!

Another disclaimer: the internet is weird, so if you are reading this well into the future: This was written in September of 2020, so know that if you are reading this significantly beyond this date, you should research for the most updated information! I’m hoping that by the time you’re reading this, the system is easier and more affordable with a higher standard of care… so much so that you won’t even need to use a post like this to begin your insurance research process… but that’s a post for another day! 

As a small business owner, I’m my own employer which means… I’m in charge of determining a lot of official and logistical things which includes which health insurance I have access to! While this is great and offers a degree of flexibility (with a pretty large price tag tbh…), it is also pretty stressful. When I was faced with searching for my own private health insurance earlier this year, I really wished that there was a guide that made this stuff a little easier, or at least somewhat understandable. Is this that guide? Honestly, no… sorry! BUT I am sharing a few tips, tricks, links, and terms with you so you at least know how to get your search for health insurance rolling!

In all honesty, I’ve been super fortunate to be on my family’s health insurance plan for most of my life. Know that I know just how blessed I am to have had this access and to continue to have the means to purchase private health insurance on my own. This is a privilege that I am grateful for each day.

Now… the reason I needed private insurance? I am self-employed, work a part-time job, and aged off of my parents’ health insurance at 26, resulting in a loss of benefits.

If you know me, you know that health insurance has caused me a lot of stress and grief in the last couple of months… I joke about it a lot (anyone know a single guy with a low deductible and monthly premium? Kidding!!!… but also… 👀), complain about it loudly (Why does this system have to be confusing and expensive?!), but ultimately didn’t have a choice but to figure it out. The truth? It really didn’t have to be as daunting as I made it! I switched plans TWICE in the middle of a pandemic, and I came out on the other side, so I promise you… if I can do it, you can too! That said, about a year ago when I DID start searching for health insurance, I had no idea what to even begin with searching… where to search… how or when to enroll in a plan… what plans would even look like… how payments would work… “I have to pay HOW much each month?!…” basically, I had A LOT of questions.

This stuff can be scary and confusing and expensive, so I’ll help you out while clarifying a few of the basics I wish I knew at the start of this process. Seriously… at the start of this process, I wasn’t even sure what to Google to start my research. Know that many states are different but all allow you to obtain insurance through marketplaces. There are a number of states that allow you to use healthcare.gov to purchase health care. One of my insurance pro friends let me know that it is actually illegal to sell health insurance over state lines which is why it is so important that you are researching YOUR particular state.

Click here for the link to the site that will help you find your particular state’s marketplace. I have lived in DC and Maryland while on private health insurance and both have state-specific marketplaces. For DC and Maryland, I used the following marketplace sites:

Again as a disclaimer before we really dive in… know that I am not an insurance professional, an expert or even super savvy with health insurance. Nothing in this blog post should be taken as official advice. Please consult a professional. These are simply things I’ve learned on my own and thought would be helpful to share with you today as you begin or continue your adventure with private health insurance. Because I only have experience with Maryland and DC, these will be the systems that I share about today! Keep in mind, I am ALSO single and do not have a family, spouse, or dependants on my plan. I also am not pregnant and have no plans to become pregnant soon. Isn’t it wild that these things can influence your private health insurance plan?

Terms to know:

  • Open Enrollment: there are only certain times that you are able to enroll in health insurance plans. One of these times is during the open enrollment period (another is because of a qualifying life event, but more on that soon). Basically, open enrollment is a designated period when you can enroll or change your health insurance plan or benefits program. Keep an eye on your state’s open enrollment period.
    • This year, Maryland’s open enrollment period is November 1-December 15, 2020. You can easily find your state’s open enrollment period by hitting a quick Google search. For this data, I searched Maryland 2021 open enrollment period and got the results I needed!
    • Note: there are some differences in open enrollment periods right now (because ya know… the pandemic), so be sure to check on your state’s parameters
  • Qualified/Qualifying Life Event: this is basically a super fancy way to say that something happened in your life that has allowed you to enroll in health benefits OR allows you to change your benefits outside of the open enrollment period. When I turned 26 outside of an open enrollment period, I was eligible for insurance because of a qualified life event… same thing when I moved states! Each state will define this a little differently, so be sure to check in on what your state considers a qualified life event. Some common qualifying life events include: aging off insurance plans, unemployment or a change in job, birth or adoption of a child, marriage or divorce, permanent move, etc.
  • Special Enrollment Period: if you had a qualifying life event, chances are good, you’ll then have a “special enrollment period.” This is a fancy term to designate the amount of time you’ll have to enroll in health insurance or change benefits after a qualifying life event. It has been 60 days in both instances I’ve dealt with, though this varies, so DOUBLE AND TRIPLE CHECK so you don’t miss the window. Right now, there are also specific special enrollment periods going on with the pandemic.
  • Premium: this is a fancy way to indicate what you’ll be paying each month. Premium = bill
  • Deductible: your deductible is basically the amount you’ll pay for covered health care services before insurance kicks in and starts to pay.
  • Copay: the flat fee that you’ll pay on the spot each time you go to your doctor or fill a prescription
  • In-Network: this is basically the list of providers or healthcare facilities that are part of a plan’s network with which it has negotiated a discount
  • Out-of-Network: this is a doc or physician that doesn’t have a contract with your particular health insurance plan/provider which can result in higher prices. 
  • Coinsurance: this is the portion/percentage of a medical cost you’ll pay after your deductible has been met. Basically, you and your insurance carrier have an agreement that dictates who pays what portion of eligible costs that add up to the total sum.
    • Tip from a pro: one of my IG pals recommends avoiding a plan with coinsurance if it isn’t cost-prohibitive. It’ll be hard to predict how much you’ll be paying. So… if you need a medication or service, you won’t know your out-of-pocket payment in advance.
    • Another IG friend sent a little reminder to keep in mind that coinsurance is NOT the same thing as a copay. A copay is the fixed amount you’ll pay for covered health care services, typically upon receiving the service. With coinsurance, your share of the costs of a covered health care service is calculated as a percentage of the maximum amount your plan will pay for the service. In general, you’ll pay coinsurance PLUS any deductibles.
  • Out of Pocket Maximum: The most you’ll have to pay for covered services in a particular plan year. This amount includes your deductible, coinsurance and copayments. (More details on this here!)
  • HMO (Health Maintenance Organization): this is a type of health insurance plan/network. You’ll have to investigate EACH individual HMO insurance plan yourself, but if you see this as you search, here are a few things you can often expect from a HMO plan:
    • The healthcare network is made up of providers that have agreed to lower their rates for plan members while meeting specific quality standards. You must see a provider within the HMO network with fewer opportunities to see a provider outside the HMO network. 
    • There are also often restrictions for visit numbers, tests, treatments, etc.
    • Some plans may require you to select a primary care physician who will determine what treatment you may need and who may refer you to see a specialist or for a special test. This is called a gatekeeper plan. 
    • There is no coverage for services outside of the network. If you opt to see a provider outside of your network, you would pay the full cost of the service. 
      • Tip from a pro: Keep an eye out for providers like lab service vendors that may fall outside of the network. (As an example: your doctor, doctor’s office and health system may participate in the network, but the “lab down the hall for bloodwork” may be out of network). 
    • Premiums are generally lower (smaller bill each month), and deductibles are usually lower or nonexistent (more covered up-front)
  • PPO (Preferred Provider Organization): this is also a health insurance network. These plans also vary, so look into YOUR specific plan or the specific available plans. That said, these are a few things you can expect from a PPO plan:
    • More flexibility with picking a healthcare provider. In addition, you will save money by seeing participating providers in-network.
    • You’ll have a network of providers, but there are fewer restrictions on seeing non-network providers. PPO insurance will often pay if you see a non-network provider, though it may be at a lower rate. You will be responsible for a larger portion of the cost-sharing, through higher coinsurance, deductibles and OOP maximums out-of-network.
    • You can see the doc or specialist you’d like to see without a referral from your primary care physician. 
    • You may be covered if you see a doc or visit a hospital out of network. That said, benefits will be better if you stay in the PPO network.
    • Monthly premiums are often higher, and it is common for there to be a deductible.

     

  • HSA or Health Savings Account: (Admittedly, I don’t know too much about these! This term is included based on the recommendation of a friend in the industry… sharing their words of advice here!)
    • This has been a pretty big trend in the last number of years. There are specific plan designs (with a minimum deductible requirement) that allow you to open a tax-advantaged savings account to pay for qualified health care expenses. These plans are often offered at a lower premium due to a higher deductible and out of pocket maximum and can be offered in an HMO or PPO setting. The savings account rolls over each year (allowing you to accumulate a balance) and allows you to pay for expenses such as:
      • Medical- deductible, coinsurance, copays
      • Prescription drug
      • Dental
      • Vision
      • With many more qualified expenses linked HERE!

 

There are a lot of other terms you may find through your adventure with health insurance! Click here for the healthcare.gov glossary! This really helped me define some of the terms you’re seeing above! There are plenty of definitions, breakdowns, and specifications for terms you’ll see throughout your research.

Exploring Plans

  • We chatted about this up top, but you’ll need to get into your marketplace. You’ll usually have to create an account, enter some details to confirm your eligibility, and then will be taken to some plan estimates. I used the Maryland and DC-specific networks, but you can also use www.healthcare.gov to connect with your state’s marketplace or to be taken to the application for specific state plans.
  • Once you find your healthcare marketplace and have a general idea of what you are able to spend on insurance each month, it’s time to look for a plan! Something to keep in mind: All plans are not created equally, and it is up to YOU to decide what you need from health insurance. Some plans are medical only, some include vision, some include dental, some require you to purchase dental or vision on your own… Basically, it is a lot, but you have the power to decide what you need.
  • For me personally, it is worth it to pay a little more each month for a lower deductible and a PPO plan. (Especially because…ya know, pandemic and I have some autoimmune issues. This is also what I’ve known most of my life. For others, a higher premium may not be worth it. That said, on the health insurance marketplaces that I was exploring, each plan was ranked and rated which was a really fun system to dive into.
      • Many systems use a star or metal rating system, and some use both! I say some because I know DC and MD systems do, but I can’t speak for all or any other systems. 
        • Because Maryland is the most recent system I’ve used, I’ll review their ranking system. Be sure to double and triple-check what YOUR systems ranking system means as well as the average percentages related to the metal ranking system (hang tight… we’re getting there):
          • Stars: MD defines this as the quality rating out of five stars. A plan with MORE stars performs better than a plan with fewer stars, based on ratings of clinical quality, enrollee experience, and affordability.
          • Metal system: Think of this (kind of??) as olympic metals. In MD, you’ll see catastrophic ratings, bronze, silver, gold, and platinum. These categories are based on the percentage the plan pays of the average overall cost of providing essential health benefits. So… the plan category you choose will impact the total amount you’ll likely spend for essential health benefits during the year. On average (in MD, keep in mind!!):
            • Bronze=plan pays 60% for essential health benefits
            • Silver=plan pays 70% for essential health benefits
            • Gold=plan pays 80% for essential health benefits
            • Platinum=plan pays 90% for essential health benefits
            • Catastrophic plans: are plans often available to people under 30 and those of lower-income brackets… generally, folks with a catastrophic plan are paying more out of pocket for services with a lower monthly premium
  • Consider what type of plan you want, how much you’re willing to pay upfront, out of pocket later, etc. Select a few plans you are interested in and use the compare feature found on the marketplace to compare them. On many platforms, you’ll have the ability to compare plans side by side, so you can see things like copay amounts, what’s covered, what’s not covered, other benefits, expenses, etc. This really helped me narrow in on the plan I wanted and NEEDED.
  • The thing about health insurance is that all of our needs and requirements are different. I can’t offer any advice here, but if you contact an insurance provider, they may be able to help you out. What’s most important with the plan you’re selecting is that it is the right plan for YOU.
  • Start looking at plans and getting estimates early. If you’re like me and aged off your family insurance, the last thing you want to be doing is shopping for plans on your birthday.
  • Plans take a while to process, so know that pre-planning is very necessary. Billing cycles are a little weird (Carefirst… my private provider… doesn’t always debit on the first of the month), so watch your budgeting, and use that auto-pay feature.

Where to find help

  • There are people out there who have a PASSION for this stuff and the desire to help you. Seek them out, ask questions, and AGAIN, don’t be afraid to ask questions
  • When I was starting my “adventure” to obtaining private health insurance, I started by surveying friends. I asked them what they did, how they worked through things, and where they found coverage because I had NO idea where to start. It can be a bit of a weird conversation, but I was lucky enough to have a friend that is an insurance pro who walked me through a lot of it! They let me know where to begin my search, how to find plans, what I should specifically look for, and all that good stuff.
  • I thought shopping for health insurance would be like going to the DMV (miserable, confusing, and even more confusing when you don’t know the answers)… that’s not the case! Fortunately, the agents on the phone lines are SUPER helpful and WANT you to succeed by finding a plan that is right for you. I called the DC and MD lines a number of times throughout the process to ask questions, to confirm details, and then later chatted with my private company when I had to make a few adjustments and bill payments with my move.
    • There are certain parameters and requirements, but some may be eligible for financial aid. Typically, this is addressed within the health insurance marketplace/application.

One last thing to look into from an IG friend! 

  • They were set to age off their parent’s coverage while in grad school. As a family, they opted for a COBRA Extension to keep them on the family plan through school. It was a pretty expensive option but helped because they were a little nervous about the plans offered through school. The COBRA Extension lasts for 18 months which gives them a little extra time to get into the job market, on their own insurance plan, etc. 
  • I don’t have any experience with this option personally and I know there are many specifics and ins and outs when it comes to extensions, but I wanted to include their experience here because I knew it could help someone else! Consider doing some research, talking to your provider, ask all the questions, etc.

Resources:

  • HMO vs. PPO
  • Cigna Understanding Insurance
  • I had a few friends that work in and are familiar with the industry review this post before publishing. They prefer to remain anonymous, but if you’re reading this, know I’m sending you so much gratitude!!

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