Direct Policies Will Be Cheaper

Keith runs a small business and is looking for a solution for health insurance for himself, his wife, and his two employees. Is a group plan a good idea?

QUESTION: Keith from Spring Hill, Tennessee, runs a small business and is looking for a solution for health insurance for himself, his wife, and his two employees. Is a group plan a good idea? Dave tells Keith what he did when he was first starting his business.

ANSWER: There’s no such thing as group health insurance unless you’ve got hundreds of employees. A group of 10 is not a group. When we were running this business and there were 30 or 40 of us, we found it was better to buy 30 or 40 individual policies than it was to try to buy a group plan for 30 people. It’s really not enough of a break.

Here in our state, the state of Tennessee, it’s tough to beat Blue Cross Blue Shield’s rates. You can do it occasionally, so it’s worth shopping. We use Zander Insurance, which is an insurance broker that we recommend for life insurance nationally, and they go out and shop our policy every year. Every year, so far, Blue Cross has been right there with the others—sometimes a tiny bit above or a tiny bit below. We’ve been with them for three or four years. We offer in the group a couple of HSAs—three options—and a PPO. But as an individual in your situation, I’d just go buy direct policies. I think you’re going to find them cheaper.