An Overview of Two Health Insurance Options for Small Employers

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Health insurance is in the news, and affordable health insurance coverage is at the top of many members’ lists of concerns. As booksellers express ongoing interest in alternative options for health insurance for their employees, ABA has continued its work in identifying viable options for either group health insurance through the association or for other offerings for small-employer groups. As a result, ABA has identified two small employer options that might offer promise to some members.

Custom Benefits Insurance Group, Inc.

A program offered through Custom Benefits Insurance Group, Inc. (CBIGI) offers affordable group insurance with solid benefits and availability in 30 U.S. states. This is not just a broker for an Oxford or Blue Cross plan, but an independent health insurance company that is not restricted by state boundaries. CBIGI offers a dedicated customer service line as well as a member claim portal.

There are, however, some major distinctions between this program and policies provided by the big names in insurance. First, the network(s) available in a particular area may not be immediately familiar and may require some research to determine which providers are in-network. Second, depending on a bookstore’s location and demographics, some medical underwriting may be necessary before a policy can be issued. Nonetheless, this program has been in existence for more than four years and is an option for bookstores. Any decision about group or individual health insurance should be made based on booksellers’ own research and due diligence.

Booksellers can visit the Custom Benefits Insurance Group, Inc. website for more information and to request a quote.

Professional Employer Organization (PEO)

Another option, a type of service that has been in existence for decades, is called a Professional Employer Organization, or PEO. A PEO is a firm that provides human resources services under which an employer can outsource certain employee management tasks, such as employee benefits, payroll, workers’ compensation, etc. This relationship is known as co-employment: bookstore employees become co-employed by both the bookstore and by the PEO. This is necessary because an employment relationship is required in order to provide certain employee benefits. The bookstore continues to provide day-to-day direction to employees, but by virtue of having many companies’ employees under their umbrella the PEO is able to offer certain benefits to stores and their employees at a competitive, “big-company” price.

Generally, PEOs offer a comprehensive suite of benefits and a range of health and dental insurance plans, assistance with HR compliance, and a robust online portal with a managerial dashboard. This can be an attractive offering for small companies that don’t have the in-house resources for HR. Keep in mind that PEOs charge a monthly fee per employee that detracts from the attractive benefit pricing, and because of the co-employment relationship, there is a great deal of paperwork required in signing up. There are many firms offering this service, such as JustWorks, TriNet, or Insperity. Because of the important payroll and payroll tax implications of the co-employment relationship, ABA advises that booksellers confirm that a PEO is certified by the IRS before engaging in business. Members should conduct their own research and due diligence prior to making a decision about group or individual health insurance.

With the American Health Care Act currently under review by the Senate, the health insurance operating environment and, consequently, options for employers and employees may or may not change. No matter the outcome, ABA will continue its work on behalf of members regarding this issue.

Booksellers with questions about health insurance options for small employers can contact ABA Chief Financial Officer Robyn DesHotel.