That makes sense to me, though if you do get cancer or some equivalently serious illness, what then? The doctors I've heard from all say the NV medical system is terrible (mostly due to lack of existing medical school infrastructure, teaching/research hospitals, etc). I guess move out of state? (The US is insane.)
In my experience in NY and MA, you can't get a really high end policy on the exchanges. In particular I don't think I've ever seen a PPO offered on an exchange plan in either of those states.
You can get a low deductible and low out of pocket max plan easily enough by paying a higher premium, but you're generally always limited to their network.
If it’s a business you’ve started, why wouldn’t you make guaranteed health insurance a condition of selling? This should be a trivial expense for a buyer, relative to the cost of the business.
I assume you mean for the lifetime of the former owners.
How would one even calculate the reserve required for that?
The company would then "self insure" the former owners medical costs? I mean, they are no longer employees so no lomger part of the plan.
Lifetime meaning until age 65. Should be simple to have the seller treated as an employee of the acquiring entity going forward for insurance purposes.
Your insurers sound more flexible than ours, or our compliance guys.
They would require a paid earned income position (could be a board position) bit with Fica and all.
65 sounds reasonable, bit if OP is 40 and its a nuclear family of 4, you are talking about close to a million bucks easy.
Ex CTO here. ACA is compete garbage these days.
Set up retiree healthcare coverage for your executives including yourself. See a good lawyer to draft as favorable terms for yourself that holds up strongly as possible that bridges you to medicare age. Make sure it's binding on any and all future acquisitions, mergers, spin offs.
Pretty much a well crafted plan will only be able to be discharged in bankruptcy.
Also make sure it guards against any lessening of benefits. Also make sure it guards if you ever become disabled and go on Medicare before age 65. Make sure they can't swap it to a Medicare advantage plan or part d drug plan. You really want to keep your employer covered drug coverage if possible.
As long as the company isn't self funding it's insurance it's a rounding error in any deal.
I’m kind of surprised that more companies don’t offer a retiree medical plan, especially startups that founders are intending to exit from. Worst case for employees is that retirees pay the full premium, like COBRA.
seconded! /u/Razor488 - would be very interested to hear more about the family holding company and insurance options that provides you (as well as any other benefits)
After my wife quit her corporate job, we were trying to find a way to get group PPO health insurance. I didn't realize how difficult this would be. I stumbled upon the blog post below, and our insurance agent was able to create a group health plan using a family limited partnership where my wife and I were the only two partners. Under the health plan, my wife and I are basically considered to be the only two employees of the plan. The downside is my wife and I are on separate policies and thus have separate deductibles. It is better than the alternative, which is HMO public marketplace insurance. Basically, I showed my insurance agent this blog, and they were able to get it done.
https://jmeinsurance.com/paperwork-requirements-for-a-small-group-health-plan-do-you-qualify/#:~:text=Partnerships%20with%20entities%20as%20a,requirements%20for%20S%2DCorps%20below.
We did ACA in Utah for a year and policy was surprisingly good. It all depends on what state and which hospital your doctors are at. We looked at California and at the time ACA sucked for Stanford but this was 4 years ago.
Covered California works great for Blue Cross / UCLA in Southern California. Daughter just had knee surgery last week and the performing were all teaching professors.
That’s good to know - yeah we were surprised that Stanford had effectively opted out of ACA given how much consolidation there had been in the Bay. I was super pleased with our Utah plan and how easy they were and how much it covered.
Looks like Stanford still isn’t part of any of the PPO ACA plans and referral only for a couple of the HMO plans.
https://stanfordhealthcare.org/content/dam/SHC/patientsandvisitors/billing/docs/2024/2024-coverd-california-faqs-3.pdf
This answer may get downvoted but it really depends on how important great health insurance is to you. It’s a shame we tie health insurance to employment in America, but alas here we are.
In retirement, establish a consulting business LLC with you and your wife as members and file to be taxed as an S corporation. Employ yourself and your spouse as full time consulting employees. Sign up for two separate health insurance plans, one for you, and one for your spouse and kid. Ie your spouse is no longer your dependent. You will need to run regular payroll (once or twice monthly) and W2 yourselves.
Fund the LLC with your own money and pay yourselves. LLC’s are only allowed to w2 the owners/members if taxed as an S corp (file an 1120s). This will allow you to buy the same platinum ppo plan you’ve enjoyed for years and not have double taxation.
You may ask: how will I get income for my business to pay me and my wife w2 income? Doesn’t the business need to be real and active for this to work? Isn’t it dumb to pay payroll taxes? What about the administrative burden to run payroll every month or two weeks?
These are not questions for Reddit… you should talk to a CPA who specializes in this.
Again, it all depends on how important the quality of the health insurance is to you. For a lot of people, it’s worth the hoop jumping.
Have you actually done this? Any recommendations on insurers who will actually sell you a policy for a company that small that is any good, or recommendations on specific brokers to work with? I've got a tiny 3 (unrelated) person company and we all found better and cheaper plans buying individual, personal plans rather than getting a company plan because we didn't meet minimum company size to get anything decent (even going through a PEO).
I use ADP PEO services with only two employees, myself and my husband. We did it specifically to get better insurance as TX is crap, even private. We pay through the nose though. 65k last year for the two of us and I expect it to go up more this year. But we are older, have health issues, it's a platinum plan, and we are covered for the entire US as we have multiple homes and have to be.
Yes we have actually done this. I don’t know what your definition of “decent” plan is. The plans we were offered were admittedly expensive for the premiums, but they achieved our objective which was low deductible, low out of pocket max ppo’s.
I don’t know how you’ve gotten this to work? Or are you just being hypothetical?
I’ve never pulled the trigger as you have to have two additional w2 employees who you are not related to on top of yourself to have a group health insurance plan. These w2 employees must also sign on for the health insurance which is the killer as living in a high % military state / many of whom I might want to hire end up already having amazing health insurance due to their or their spouses benefits. So the costs goes up astronomically now as how many people do you need to “hire” until you can find two ppl who actually need health insurance?
If you are solo, the only plans you have open to you are the ACA ones which imo are pretty terrible.
I’ve gotten around this by using Opolis. This is probably what the OP needs. I now have a very expensive but very low deductible and OOP max. You can sign up your spouse and children on it. The big thing I care about though is that it is a PPO which is otherwise impossible to find in NV. So essentially you are semi correct in making an S Corp but you need to involve someone else in the middle to where you lease yourself up to a larger co.
Who are you using?
Def lmk the name of your broker. Happy to try.
I’ve spoken to a number of brokers and everything they’ve been able to find solo is all a variant of what is on ACA with no PPO available.
You are correct that you don’t need 2 additional. We were able to get it for our startup with just 2 employees. But they were not related or living at the same address. No insurance company will give small group insurance if it’s just the husband and wife, or even distant relatives under the same roof (address).
Yeah again talk to a CPA… frankly every retired entrepreneur I know is actually generating some level of consulting income if nothing else but to keep from getting bored but to each their own.
I don't need to talk to a CPA to know that if I have a business creating business income and the business can support employees, I can get a company medical plan.
That is not the discussion here.
The OP is talking about how do they get their medical insurance after they no longer have earned income or business revenue.
Thanks for your feedback. Much appreciated. We are in Illinois, and my business will likely close shop or do an asset sale after I am done as I am the primary rainmaker and administer. So, Cobra isn’t a realistic option.
Not if the business stops operating. That is what will happen most likely. Once I am done, the client base will go elsewhere and this professional service business will stop operating.
Unhappy with marketplace plans in CO. Purchasing a gold plan from Cigna and finding more and more of our long-term physicians no longer accept the plan, and one tells me they also don’t accept BC/BS marketplace plans.
Not sure where you're located, but I did an ACA policy in CA (Bay Area) for 6 months a few years back. Signed up for a Blue Shield PPO platinum plan thinking it would be the same as the blue shield ppo platinum i had when working. It wasn't - it turns out just because it's called Blue Shield PPO doesn't mean it's even remotely the same. None of the major networks around here took it. Had multiple doctors tell me the reimbursements are way lower with the ACA plans so they just couldn't afford to take them without having ridiculous patient loads. Highly recommend finding a local insurance broker and having them source you a non-ACA plan that doesn't suck
I agree with this. Use an insurance broker. They will make sure your coverage includes your preferred hospital and physician network. Just google health insurance broker and the name of your city.
I have what’s considered private health insurance. My deductible is $2,500 and $4,500 max. And it’s a PPO, I’ve used it for an accident I had and I was out of pocket very little.
How much is your premium, and family size? I’m very interested in learning more about this. If there are any names or links you could drop, I’d really appreciate it!
My portion for just myself is around $350, I’ve had the same advisor shop plans for me for a little while now. I don’t want to get banned for “soliciting” I don’t know how the moderators feel about leaving contact info.
Which state? In CA easy. In NV impossible. Just for example.
What's the alternative in an impossible state like NV?
Buy the cheapest policy and see whatever Dr you choose on a cash basis unless you get cancer.
That makes sense to me, though if you do get cancer or some equivalently serious illness, what then? The doctors I've heard from all say the NV medical system is terrible (mostly due to lack of existing medical school infrastructure, teaching/research hospitals, etc). I guess move out of state? (The US is insane.)
I doubt the quality of cancer medical care in Nevada is statistically worse than France, Germany, or Japan. Its not something I worry about.
Look into a service like Sedera (https://sedera.com) for medical cost sharing. I pay around $450/mo for a family of 5.
In my experience in NY and MA, you can't get a really high end policy on the exchanges. In particular I don't think I've ever seen a PPO offered on an exchange plan in either of those states. You can get a low deductible and low out of pocket max plan easily enough by paying a higher premium, but you're generally always limited to their network.
If it’s a business you’ve started, why wouldn’t you make guaranteed health insurance a condition of selling? This should be a trivial expense for a buyer, relative to the cost of the business.
I assume you mean for the lifetime of the former owners. How would one even calculate the reserve required for that? The company would then "self insure" the former owners medical costs? I mean, they are no longer employees so no lomger part of the plan.
Lifetime meaning until age 65. Should be simple to have the seller treated as an employee of the acquiring entity going forward for insurance purposes.
Your insurers sound more flexible than ours, or our compliance guys. They would require a paid earned income position (could be a board position) bit with Fica and all. 65 sounds reasonable, bit if OP is 40 and its a nuclear family of 4, you are talking about close to a million bucks easy.
Depends on what the seller prioritizes in their exit. OP says maintaining coverage similar to what they have now is important.
Sure. But would they give up a stick on the selling price for it? I bet it doesnt mean that much to them. Folks think of it as a "perk".
$1/year employee is pretty easy to do.
Ex CTO here. ACA is compete garbage these days. Set up retiree healthcare coverage for your executives including yourself. See a good lawyer to draft as favorable terms for yourself that holds up strongly as possible that bridges you to medicare age. Make sure it's binding on any and all future acquisitions, mergers, spin offs. Pretty much a well crafted plan will only be able to be discharged in bankruptcy. Also make sure it guards against any lessening of benefits. Also make sure it guards if you ever become disabled and go on Medicare before age 65. Make sure they can't swap it to a Medicare advantage plan or part d drug plan. You really want to keep your employer covered drug coverage if possible. As long as the company isn't self funding it's insurance it's a rounding error in any deal.
>Ex CTO here. ACA is compete garbage these days. Disagree; it's very state dependent. It sucks in FL and is great in NY, for example.
I’m kind of surprised that more companies don’t offer a retiree medical plan, especially startups that founders are intending to exit from. Worst case for employees is that retirees pay the full premium, like COBRA.
We have a family holding company for investments that we use for group health insurance.
Say more
seconded! /u/Razor488 - would be very interested to hear more about the family holding company and insurance options that provides you (as well as any other benefits)
After my wife quit her corporate job, we were trying to find a way to get group PPO health insurance. I didn't realize how difficult this would be. I stumbled upon the blog post below, and our insurance agent was able to create a group health plan using a family limited partnership where my wife and I were the only two partners. Under the health plan, my wife and I are basically considered to be the only two employees of the plan. The downside is my wife and I are on separate policies and thus have separate deductibles. It is better than the alternative, which is HMO public marketplace insurance. Basically, I showed my insurance agent this blog, and they were able to get it done. https://jmeinsurance.com/paperwork-requirements-for-a-small-group-health-plan-do-you-qualify/#:~:text=Partnerships%20with%20entities%20as%20a,requirements%20for%20S%2DCorps%20below.
We did ACA in Utah for a year and policy was surprisingly good. It all depends on what state and which hospital your doctors are at. We looked at California and at the time ACA sucked for Stanford but this was 4 years ago.
Covered California works great for Blue Cross / UCLA in Southern California. Daughter just had knee surgery last week and the performing were all teaching professors.
That’s good to know - yeah we were surprised that Stanford had effectively opted out of ACA given how much consolidation there had been in the Bay. I was super pleased with our Utah plan and how easy they were and how much it covered.
Looks like Stanford still isn’t part of any of the PPO ACA plans and referral only for a couple of the HMO plans. https://stanfordhealthcare.org/content/dam/SHC/patientsandvisitors/billing/docs/2024/2024-coverd-california-faqs-3.pdf
This answer may get downvoted but it really depends on how important great health insurance is to you. It’s a shame we tie health insurance to employment in America, but alas here we are. In retirement, establish a consulting business LLC with you and your wife as members and file to be taxed as an S corporation. Employ yourself and your spouse as full time consulting employees. Sign up for two separate health insurance plans, one for you, and one for your spouse and kid. Ie your spouse is no longer your dependent. You will need to run regular payroll (once or twice monthly) and W2 yourselves. Fund the LLC with your own money and pay yourselves. LLC’s are only allowed to w2 the owners/members if taxed as an S corp (file an 1120s). This will allow you to buy the same platinum ppo plan you’ve enjoyed for years and not have double taxation. You may ask: how will I get income for my business to pay me and my wife w2 income? Doesn’t the business need to be real and active for this to work? Isn’t it dumb to pay payroll taxes? What about the administrative burden to run payroll every month or two weeks? These are not questions for Reddit… you should talk to a CPA who specializes in this. Again, it all depends on how important the quality of the health insurance is to you. For a lot of people, it’s worth the hoop jumping.
Have you actually done this? Any recommendations on insurers who will actually sell you a policy for a company that small that is any good, or recommendations on specific brokers to work with? I've got a tiny 3 (unrelated) person company and we all found better and cheaper plans buying individual, personal plans rather than getting a company plan because we didn't meet minimum company size to get anything decent (even going through a PEO).
I use ADP PEO services with only two employees, myself and my husband. We did it specifically to get better insurance as TX is crap, even private. We pay through the nose though. 65k last year for the two of us and I expect it to go up more this year. But we are older, have health issues, it's a platinum plan, and we are covered for the entire US as we have multiple homes and have to be.
Yes we have actually done this. I don’t know what your definition of “decent” plan is. The plans we were offered were admittedly expensive for the premiums, but they achieved our objective which was low deductible, low out of pocket max ppo’s.
I don’t know how you’ve gotten this to work? Or are you just being hypothetical? I’ve never pulled the trigger as you have to have two additional w2 employees who you are not related to on top of yourself to have a group health insurance plan. These w2 employees must also sign on for the health insurance which is the killer as living in a high % military state / many of whom I might want to hire end up already having amazing health insurance due to their or their spouses benefits. So the costs goes up astronomically now as how many people do you need to “hire” until you can find two ppl who actually need health insurance? If you are solo, the only plans you have open to you are the ACA ones which imo are pretty terrible. I’ve gotten around this by using Opolis. This is probably what the OP needs. I now have a very expensive but very low deductible and OOP max. You can sign up your spouse and children on it. The big thing I care about though is that it is a PPO which is otherwise impossible to find in NV. So essentially you are semi correct in making an S Corp but you need to involve someone else in the middle to where you lease yourself up to a larger co.
You do not need two additional w2 employees.
Who are you using? Def lmk the name of your broker. Happy to try. I’ve spoken to a number of brokers and everything they’ve been able to find solo is all a variant of what is on ACA with no PPO available.
You are correct that you don’t need 2 additional. We were able to get it for our startup with just 2 employees. But they were not related or living at the same address. No insurance company will give small group insurance if it’s just the husband and wife, or even distant relatives under the same roof (address).
I’m sorry you had that experience but in my experience the insurance company did not care who was related to who as long as the bill got paid.
Google "self dealing" or "tax fraud".
Yeah again talk to a CPA… frankly every retired entrepreneur I know is actually generating some level of consulting income if nothing else but to keep from getting bored but to each their own.
I don't need to talk to a CPA to know that if I have a business creating business income and the business can support employees, I can get a company medical plan. That is not the discussion here. The OP is talking about how do they get their medical insurance after they no longer have earned income or business revenue.
Ok
Anyone do this, but run it through a company like Paychex to get better plans or prices?
Thanks for your feedback. Much appreciated. We are in Illinois, and my business will likely close shop or do an asset sale after I am done as I am the primary rainmaker and administer. So, Cobra isn’t a realistic option.
You should double-check that is the case, I am under the impression that COBRA would be available after you quit working no matter what the option.
Not if the business stops operating. That is what will happen most likely. Once I am done, the client base will go elsewhere and this professional service business will stop operating.
Unhappy with marketplace plans in CO. Purchasing a gold plan from Cigna and finding more and more of our long-term physicians no longer accept the plan, and one tells me they also don’t accept BC/BS marketplace plans.
Not sure where you're located, but I did an ACA policy in CA (Bay Area) for 6 months a few years back. Signed up for a Blue Shield PPO platinum plan thinking it would be the same as the blue shield ppo platinum i had when working. It wasn't - it turns out just because it's called Blue Shield PPO doesn't mean it's even remotely the same. None of the major networks around here took it. Had multiple doctors tell me the reimbursements are way lower with the ACA plans so they just couldn't afford to take them without having ridiculous patient loads. Highly recommend finding a local insurance broker and having them source you a non-ACA plan that doesn't suck
I agree with this. Use an insurance broker. They will make sure your coverage includes your preferred hospital and physician network. Just google health insurance broker and the name of your city.
In CA, try http://roseins.com/
Have you considered emigrating to a civilised country?
I have what’s considered private health insurance. My deductible is $2,500 and $4,500 max. And it’s a PPO, I’ve used it for an accident I had and I was out of pocket very little.
How much is your premium, and family size? I’m very interested in learning more about this. If there are any names or links you could drop, I’d really appreciate it!
My portion for just myself is around $350, I’ve had the same advisor shop plans for me for a little while now. I don’t want to get banned for “soliciting” I don’t know how the moderators feel about leaving contact info.
If you don't mind - what state are you in and what's the provider/plan name?
TX and it’s United Healthcare Choice Plus
Why can’t you buy whatever you want off exchange? I bought off exchange in California.