by Deborah Jeanne Sergeant

Many people rely upon their employer-sponsored health insurance plan. Farmers operating their own businesses do not have that option. MidAtlantic Women in Agriculture recently presented “Health Insurance Options for Farmers and Small Business Owners” as a webinar led by Maria Pippidis, University of Delaware Cooperative Extension, and Jesse Ketterman, University of Maryland Extension.

Farmers need to plan for healthcare to ensure they have the coverage needed to keep well. “It can protect you financially from an unexpected health issue,” Ketterman said. “Three out of five bankruptcies are associated with healthcare expenses.”

Health coverage plans can vary widely. To satisfy the requirements of the Affordable Care Act (ACA), Ketterman said plans must cover at some level preventive and wellness services; lab tests; hospitalization; prescription drugs; services and devices for injuries, disabilities or chronic conditions; outpatient care; maternity and newborn care; mental and behavioral health treatment; pediatric care; and emergency room services.

“Some short-term plans may be cheaper, but some of these services may not be covered,” he added. “Each state may have different regulations as to what is required and what plans are available.” Location can also matter when it comes to selection of plans. Factors that contribute to which health insurance plan you choose include the state in which you live, Ketterman said.

“You may need to consider multiple streams of insurance coverage to ensure the lowest price and best coverage,” he said. Some people qualify to have their children covered through their state-subsidized Children Health Insurance Program (CHIP), while parents may be covered by a plan partially paid for by the farm. One partner may rely upon the insurance offered by an off-farm employer and the other may need different coverage.

The Health Insurance Marketplace may offer lower cost plans than those purchased through a health insurance provider. Veterans may qualify for armed forces health coverage. There are also Christian healthcare or cost sharing ministry plans and Medicare.

People with few chronic healthcare needs may readily satisfy their ACA obligation. But people with more issues may not have their needs approved by other group members. Typically, people pay up front and must wait for reimbursement to be approved.

Cost sharing plans may have few plans from which to choose and they may not cover family members. The deductibles are often high and they may not cover all that’s needed. Make sure these plans satisfy the requirements of the ACA.

Off-farm, employer-based health insurance and association membership-based insurance usually provides the best coverage, but may have high deductibles and hefty costs. Check with the human resources department to see what is available.

Plans through the Health Insurance Marketplace typically have the least robust coverage but are the most affordable, as they are subsidized for people making 400% of the poverty level or lower. Tax credits offset the cost of the premiums. But fewer plan choices are available than with typical insurance (healthcare.gov provides links to state websites and a subsidy calculator).

The subsidized CHIP program bases premiums on income and family size eligibility guidelines. Coverage includes medical, dental, vision and pregnant women.

Qualifications for Medicaid are based on income, family size and eligibility guidelines, Ketterman explained. “It’s designed for non-long term healthcare needs … It’s possible you could look at CHIP for your children and something else for yourself. You can have different types of plans to cover your entire family.” (Medicaid and CHIP information is at healthcare.gov/Medicaid-chip/childrenshealth-insurance-program.)

Selecting an option depends on multiple factors. Individual factors can also raise or lower the cost. “Smoking is one of those things that can impact cost,” said Pippidis.

She said some providers of private health insurance also sell on the Marketplace. “If the company does both, they could enroll you in the marketplace plan directly,” Pippidis said. “Comparison shopping is important to get the best deal at the lowest price.”

It’s also vital to note that not all providers sell in all states. She encouraged active or retired military members to explore eligibility of health insurance through the Veterans Administration at va.gov/health-care.

For older adults, Medicare, Medicare Advantage and Medicare Supplemental (Medigap) insurance is available. Medicare is for individuals 65 and older or people who are disabled and receiving SSI benefits, Pippidis said. “It provides health insurance coverage for several aspects of healthcare.”

The premium is $148/month for Medicare parts B and D, depending on the prescription drug plan chosen and income. The window for singing up is the three months before and after one’s 65th birthday.

“Even if your Social Security benefit age is over 65, you still need to sign up for Medicare at 65,” Pippidis said. “It pays for about 80% of your healthcare costs. That is one of the reasons there are Medigap insurance plans. You pay a premium each month and those plans wrap around what Medicare doesn’t pay.”

The Medicare C plans, also called Advantage plans, “are privately sponsored insurance programs that are typically an HMO type of plan and usually provides medical, dental and vision. It’s not necessarily available in all areas. What you’d do is either pick Medicare or the Advantage plan,” according to Pippidis.

She noted that Christian healthcare plans or sharing ministries are not insurance. “Basically, there is a group of individuals usually connected because of religious belief,” she said. “It sort of works like insurance in that you’re paying in each month and it’s lumped into a big pot. As there may be an incident where you need healthcare coverage, then you would submit those claims. You would have to pay for that healthcare cost upfront to the provider and take those bills and submit them to the healthcare sharing ministry for reimbursement.”

This may sound ideal for healthy, low use healthcare consumers; however, Pippidis said that farmers should “think about your cash flow, availability and rules about being a member. Many have rules around no use of tobacco, illegal drugs, alcohol and the need to pursue healthy lifestyles. Some procedures may not be allowed at all.”

“Skinny” plans cost less; however, Pippidis said they may not cover all services and can deny coverage to patients with pre-existing conditions. “They typically cover preventive type of things and don’t tend to cover catastrophic type of care,” she said.

Gap insurance plans provide an emergency safety net for areas not covered by other insurance, such as those with a high deductible plan. “You would only use this if you don’t have a major medical policy and want a short term safety net,” she said.

The Small Business Health Options (SHOP) program, health reimbursement accounts (HRA) or additional income may provide ways for employers to help cover their employees. A farm must have one to 50 employees to qualify for SHOP.

SHOP gives choice and flexibility because employers can offer one plan, let them choose from multiple plans, or offer only health coverage, only dental insurance or both. They can choose how much to contribute and whether or not they will cover dependents.

An HRA plan “allows them to make a health insurance purchase independently of you,” Pippidis said. “You’re putting some money aside to help them offset their cost. It’s tax advantaged for you and it can help you set up a way to fund up to 100% of their health insurance costs or X amount of dollars they can use toward their healthcare costs. Anything that the IRS says is an approved, qualified medical expense they can use toward paying those bills. You can’t enforce that they use that extra income towards health care insurance.”

When you go to a broker and you have a small number of employees, you don’t have a lot of negotiating power around the cost, Pippidis noted. The smaller and older the group, the higher the cost.

An independent agent/broker can help employers identify a plan that works best for their situation and the number of employees. “You want to shop around not only for coverage, but also for price,” Pippidis said.