A new phenomenon has reared its ugly head with some small group health insurance renewals in TN. I’m talking about a nearly $3000 per month premium for family coverage. I have run into several people who are actually paying $2700/month or more for their family health insurance.
About 10 years ago, when family premiums were routinely showing up in the $1200 range, I used to tell folks that this was more like a mortgage payment than an insurance premium. Now, in the $3000 range, I feel like you are paying for a second beach house, but you never actually get the house.
Consider what a $3000 a month premium means:
$36,000 per year in payments (plus your deductible) before you are eligible for any type of major medical coverage. How many families have medical cost that exceed $10,000 per year, much less $36,000?
A $1500 per month savings in premium invested at 5% interest will grow to $237,000 over 10 years.
You are diverting massive amounts of money over time that could/should be going to retirement savings. A $1500 per month savings in premium invested at 5% interest will grow to $237,000 over 10 years, $624,000 over 20 years.
Back when premiums were creeping up to $1200 and higher, I offered strategies to families to lower their costs. We would typically put the employee on the group plan, and then the rest of the family would purchase individual coverage. This typically cut their premiums in half. Now that Obamacare has devastated the individual market for those not receiving a subsidy, this strategy is out. So what to do?
We can still keep most families with group coverage in the $600 to $1000 range for family coverage if they are offered a high deductible H S A qualified account and a Self-Funded plan arrangement. This also lowers the individual employee’s premium significantly as well. If you are not offering this option to your small group in TN, you are missing a massive opportunity.
If you give us a call (Rick Dixon Insurance) at 615-376-8899, I can show you how to lower your health insurance premium with a Self-Funded plan and an H S A strategy.
Remember, the long term effects of paying unnecessarily high health insurance premiums is staggering.