If you own a small business, sooner or later you are going to run headlong into that quagmire called health insurance. I know, I know — Web site catalogs, cash flow, profit margins, advertising and inventory costs are your major worries. But once you leave a corporate environment, health insurance becomes more pressing than ever. It seems like no matter what you do, the expense is outrageous — and if you’re young and healthy, you might be tempted to go without for a while. Take my advice: Don’t.
Consider this: According to a recent USA Today article, daily room charges can run more than $5,000 in some New Jersey hospitals. One serious illness or even an accident can bankrupt you and your small online business.
Additionally, health insurance costs have climbed so high that the evening news is increasingly full of stories about people being duped by scam artists setting up dummy insurance companies, collecting what appear to be discounted premiums and then vanishing about the time you really need the insurance. I’ve even seen one recent estimate — from Georgetown University — that says four of the biggest scams have left at least 100,000 victims with $85 million in unpaid medical bills. And now, I’m even getting spam pitching low-cost healthcare policies. Clearly, it’s caveat emptor out there.
I had been paying more than $400 a month for a single HMO policy with Blue Cross and Blue Shield of Florida, being that our orchid business is located in the Sunshine State. And that’s cheap by the standards of California or New York. But my premiums had been going up steadily, and I began looking for lower-cost alternatives.
Although you have your work cut out for you in terms of research, alternatives do exist. If you conduct your business on eBay, you might consider its group health plan for PowerSellers. If you don’t do business through eBay, there are several health insurance Web sites that provide small business owners an excellent starting point.
Health Insurance the eBay Way
eBay calls it simply “Healthcare Solutions for PowerSellers,” provided by Marsh Advantage America, which designs, manages and administers insurance programs for businesses, associations and affinity groups. HealthInsurance.com — an online collaboration of Seabury & Smith and Kelsey National Corp. — powers the online application process.
eBay make its program simple for anyone with PowerSeller status to use. Just go to the PowerSeller site and enter your eBay User ID to verify your PowerSeller status. Follow the links to the healthcare area. Once you accept the Healthcare Solutions Terms & Conditions agreement, you can review the various plans available in your area (based on local zip codes). The plans vary depending on what part of the country you are in, of course, as well as your general age and health status. The companies are pretty much name brands.
You can apply for the plans you want right then and there, enrolling yourself and all eligible family members, including spouses and dependent children “as defined by each individual carrier.”
There’s a new feature that lets PowerSeller entrepreneurs offer coverage to employees, and eBay says the discount health service plans recognize domestic partners as eligible family members.
A PowerSeller’s relationship is with the individual carrier or carriers, not eBay, so billing and customer support will all be handled directly with the carrier. Each individual carrier provides its own customer support, which you access through a central toll free number.
This is not really a traditional group health insurance plan, however. eBay says in its FAQ that “it is impossible for insurance carriers to treat PowerSellers as a traditional insurable group, so Marsh Advantage America has negotiated a series of individual plans. Because of the large number of PowerSellers, Marsh Advantage America has been able to convince underwriters to make the policies available on a simplified underwriting basis in most cases.”
eBay also reminds PowerSellers that: “Healthcare insurance is a very complicated issue — varying greatly by state and type of coverage. In the Healthcare Solutions program, Marsh Advantage America has worked to find plans that are available in as many states as possible along with providing for the unique situation of a small business owner. PowerSellers are not employees of eBay, and therefore, the insurance coverage cannot be supplemented as in many employer/employee relationships.”
The eBay health insurance offering has not been wildly successful, probably because the rates are not all that low. The quotes I got were average. eBay’s plans for the offering’s future are also not entirely clear. “I can say that the program is obviously voluntary and while some PowerSellers have signed up for it, the numbers are still small,” says eBay spokesman, Hani Durzy. “We continue to look at ways that we can tweak the program to make it more attractive to PowerSellers.”
David Steiner, who follows eBay on a regular basis for AuctionBytes.com, suggests that if you’re thinking about buying insurance through the auction giant’s program, you might want to compare it against other offerings. “You can probably find a better deal than what eBay offers its PowerSellers,” he said. “Do some comparison shopping.”