58: Health Insurance Options for Entrepreneurs with Karen Ball

EPISODE 58

[INTRODUCTION]

[00:00:02] AW: You’re listening to the Transcend Podcast. I’m your host, Asha Wilkerson, an attorney by training and an educator at heart. This podcast is all about empowering you to build a business and leave a legacy. Here’s the thing, the wealth gap in America is consistently increasing and while full-time entrepreneurship is not for everyone, even a side hustle could change your financial landscape if you’re intentional about using your business to build wealth. I’ve run my own law firm for over 10 years, and in that time, I’ve helped countless California businesses go from idea to six figures. On this podcast, we talk about what it truly takes to build a sustainable business and find financial freedom. Let’s dive in.

Hey, y’all, I’m really excited for this new episode that you’re about to listen to about health insurance options for small business owners. Now, you know that particularly in the black and brown community, access to health care is extremely challenging. And we also know that our communities tend to be less healthy because of where they are located, pollution in the air, contamination in the water, parks not being readily available in our neighborhoods, and all those kinds of things. So, taking care of our health, our body, mind, spirit, mental, emotional, all of that stuff is super important. But I have a great guest for you today to talk about the health insurance aspect in particular. And Karen was great in answering all my questions. So, tune in, take your notes, and then don’t hesitate to reach out to Karen after you’ve heard the episode. All right, enjoy.

[INTERVIEW]

[00:01:36] AW: Hi, everyone. Welcome back to another episode of Transcend the Podcast. Today, I’m super excited because I have Karen Ball here with me today, who’s going to talk to us as entrepreneurs about health insurance options. So, Karen is the owner of Pronoeo Insurance Agency and she is here today. So welcome, Karen.

[00:01:57] KB: Thank you, Asha. Happy to be here.

[00:01:58] AW: Good. I’m so happy to have you here. But I just want to acknowledge too, you we’re also an entrepreneur yourself. So, I’d love to talk a little bit about that before we get into the actual art, if you will, of health insurance. So, how did you decide to become an entrepreneur?

[00:02:12] KB: It was kind of one of those things that happened out of necessity. I had been working in the corporate world, and through whatever circumstances, found myself unemployed. But as I kept looking, I kept doing business just out of my house, and it turned into a business that I’ve been able to grow and develop over the years.

[00:02:34] AW: That’s fantastic. Have you enjoyed it the whole time? Has it been challenging? Has it been – I think sometimes, we start businesses, that based on social media, or the Fortune Magazine, it seems like this really great thing. But reality for me has been a little bit different. But how’s your journey?

[00:02:51] KB: It’s been like probably anybody else’s journey. I mean, I love what I do. So that’s great. But yeah, you have those challenges. Where are you going to find your clients? Where are you going to – how are you going to market? How are you going to do the work and do the administration part at the same time while you grow? So yeah, I’ve had all of those challenges. Slow times, busy times, all of those things. But over time, I mean, overall, it’s great. I love it.

[00:03:22] AW: Yeah, that’s good. I mean, everything you said, it’s typical. That’s what it is, right? There isn’t anything that just goes from 0 to 100 without a couple speed bumps along the way. And every level, every next level of income, every next level of growth has its own set of challenges. But I liked that you said that it has been well worth it for you, as I’m sure it is for many people. So, thank you for sharing that story with us. The first question I have is just, everybody talks about health insurance in United States and how unaffordable it is. Is it really true that health insurance, especially as an entrepreneur is just too unaffordable to actually get?

[00:04:02] KB: No. I don’t believe that is true. There are so many incentives out there. It really depends on your personal situation. You may be somebody who will want to go through California and get the assistance that’s available through that, that makes it affordable. Otherwise, there are many aspects if you have yourself, and at least a W-2 employee that isn’t your spouse, you can do a group plan through your business, and there are a lot of tax incentives that actually make it very affordable.

[00:04:35] AW: Yeah, that’s good. I mean, we talk about on this podcast, building wealth, and using our businesses to build wealth. One thing I also try to emphasize is how incredible it is to be an employer of somebody. It’s a lot of responsibility, but you also get to put money in somebody else’s pocket and guess what, if you hire just one and offer health insurance, now you get to enter a group plan. So, there’s more benefits than just helping somebody else by helping their family out as well.

Okay, so deductions, benefits, things like that. How does a business owner even go about getting insurance for themselves or for their employees? Where should I start?

[00:05:13] KB: You should start with talking to a broker, someone – that’s what I do. We don’t charge for our services. So, it is absolutely well worth taking the time to speak to somebody who knows what’s going on. And just let us ask the questions to help kind of feed out what’s going to work best for you. We know the different angles, the different areas that are available, and so once you meet with a broker, then they can help you make an intelligent, informed decision as to what you want to do.

[00:05:44] AW: Okay, so if you don’t know where to go, you should reach out to a broker because the brokers have all the knowledge, the insider information, and can help us ask questions that we might not even know to ask ourselves, right? Is there anything that we should be doing ahead of time, to prepare for that meeting with a broker?

[00:06:02] KB: Yeah, it’s important to know your numbers, to know what your income – what you project, your income is going to look like for the upcoming year, because that’s the way the government bases everything. So, if you can estimate, kind of where you feel your business is going, that is extremely helpful. And then other than that, it’s just having your personal information or the information of whoever you are going to insure. Name, address, Social Security number, that kind of stuff.

[00:06:34] AW: Okay. So, is it knowing your numbers, does the price of insurance change depending on the revenue that your business has?

[00:06:40] KB: If you are going to purchase it on an individual basis, yes. If you’re doing it as a group plan through your business, no.

[00:06:50] AW: Okay, got it.

[00:06:51] KB: It helps determine what you can and can’t afford, if you know your numbers.

[00:06:56] AW: Right. Yeah, that’s true. You don’t want to bite off a package that’s bigger than you can actually pay for. So okay, that’s good. In all aspects in business, we definitely need to know our numbers, and I’ve said it multiple times, get with a bookkeeper or a CPA, someone who can help you because the last thing –the easiest thing to do is to go in and pull the report from QuickBooks or Wave or some other accounting software, and it’s so much more efficient than thinking, “Oh, I got to call a broker for health insurance”, or for whatever it is, and now you have to go back and do the bookkeeping. Just keep up to date. So, you don’t have to waste time on that later.

[00:07:28] KB: That is sound advice.

[00:07:28] AW: Yes. Thank you. Thank you. One of the things that we had talked about in our preparation for this call was different types of insurance, or maybe where to get insurance. And you had mentioned carrier or exchange, and I’m brand new to this. So, what is the difference between, or what are the differences between the two? And what should people know about those?

[00:07:46] KB: Okay, going with the carrier means you’re going to sign up directly with Kaiser or with Blue Shield, because those insurance companies are the carriers. And that certainly is one way to go about it. If you know that you want all of your doctors from that particular network, you can sign everybody up with that carrier. The advantage of going with an exchange, and the exchanges are in California, we have Covered California, has a small business exchange. And then there’s also California Choice, which is an independent exchange. 

But both of them have a group of carriers under their umbrella. And they’re going to be the same carriers, they’re still going to have Kaiser and Blue Shield and Anthem and the national ones. But the advantage of going with an exchange is that if you want to be at Kaiser but one of your employees wants to be at Sutter or have some other network, you can offer both plans. You can offer more than one carrier if you are enrolled through an exchange.

[00:08:52] AW: Okay, got it. So, just gives you a few more options. The employer is only paying one price, but it gives the employee an option of where they want to receive their services from. 

[00:09:02] KB: Correct.

[00:09:03] AW: Okay. 

[00:09:03] KB: Yeah, it doesn’t change the price that the employer pays.

[00:09:07] AW: Got it. Okay. Yeah. At my teaching job, we have Kaiser, we have Sutter Health, and then something that’s up in Sacramento. So, I’m assuming they are involved in exchange because I get to choose which carrier I actually want to use.

[00:09:20] KB: Yeah. Well, it’s different if you’re a large group, a larger group, because then you can enroll directly with multiple carriers, usually two to three, if you’re a large group, because they require a minimum amount of enrollment. And if your business can meet those numbers, they’ll let you bring in another carrier alongside. But for the small business, and small business is less than 50 employees. So, for a small business, an exchange is a really easy way to be able to offer multiple carriers to your employees, and you can even give them options of levels of coverage and it’s not going to cost the employer anything more.

[00:10:03] AW: Okay. And then does that cost get translated to the employee that what they’re paying per month in the premium for a different level of coverage?

[00:10:10] KB: Yes. Yeah, then the employee has the option to buy up into coverage.

[00:10:15] AW: Yeah. Got it. Got it. Okay, that makes sense. So, when are business owners actually required to carry insurance?

[00:10:22] KB: Not until they have over 50 employees. So, as long as you have under 50 employees, it’s optional.

[00:10:28] AW: Okay. So, people have a little bit of time, but I will tell you that the job market out there is competitive. So, getting good employees and retaining them, might be a little bit easier if there is an insurance plan involved.

[00:10:40] KB: Absolutely. If you want to compete for the top employees, you really should have some benefits to offer them, because that’s what they’re looking for. They found that that’s one of the top priorities when they’re looking for a job is, what are the benefits.

[00:10:57] AW: Yeah. It’s definitely – I mean, I think everything looks different on the employee side than it does on the employer side, right? So, it’s thinking about minimum wage that keeps rising. And I’m like, “Yeah, workers should get $25 an hour as a minimum wage.” And then on the employer side, I’m like, “Oh, shoot, I got to pay $25 an hour.” But I do think that if we’re talking about building good, sustainable, strong businesses, the people you choose to work with, and how you treat and care for those people is so important. Because if you tell your employees or show your employees that you are going to take care of them, that you value them, they will stay with you for a long time, because they have no reason to leave. They feel invested and they feel cared for.

[00:11:42] KB: Absolutely. That’s absolutely true and by having health insurance as one of your benefits, you are building a healthier workforce, so they are not going to be getting sick as often. They will have more access to health care. So, when they do get sick, they go to a doctor sooner, then try to wait it out. And in doing so, you’re going to get more productivity out of your employees, less absenteeism, and actually carrying health insurance lowers your workers comp costs, too. So, you can save, on the back end again, in another area.

[00:12:17] AW: Yeah. I didn’t know that. Yeah, definitely. That’s good to know. So, if you have an employee, you are required by law to have workers compensation insurance. So, if you have health insurance, that also lowers your rates for workers compensation. That’s good. Good, good, good. See, there are lots of little benefits to being a business owner. We don’t know them until we start to ask the question. So hopefully, you all are learning some good questions to ask when you start to do some research on insurance. If there were three things, the top three things that you would tell someone to consider when they’re reviewing their insurance plans, what would that be?

[00:12:50] KB: Okay, top three things. Probably, if you’re looking at either getting insurance or possibly changing insurance. You really want to look at what doctor networks you want to have access to, whether it’s just you or your employees. Everything is so pigeon holed these days. It used to be, if you had any insurance at all, you could go see any doctor you want it. That’s not the case anymore. Everything is narrow networks, and so that really kind of determines what direction you’re going to go. And of course, like I said, know your numbers, know what you can afford, know what your priorities are, and all of that. If you have kids that you want to insure, you want to make sure that you have a type of coverage that is going to allow you to take that boy that climbs every tree and jumps off every fence to the doctor, every time he lands wrong.

So, networks, know your budget. Well, if you have or you know somebody has medications that they take on a regular basis, make sure your medications are covered by that plan. Not all formularies are the same, and there is no requirement by the government that they cover every medication that’s out there. So, that is a big concern, because some companies now, are covering insulin, for example.

[00:14:10] AW: That’s huge.

[00:14:12] KB: Yeah, at a straight $35 copay and other insurances aren’t. It could be hundreds of dollars for your insulin. So, it’s really important to check if your medications are going to be covered.

[00:14:24] AW: That’s really important. So, you said know the doctors and the networks, know your budget, so you know how much you can afford to spend on health insurance, and then really consider medication coverage, because that can be extremely expensive that you might have the doctor’s visit covered, but then things you need after the doctor’s visit might be too unaffordable for people.

Okay, those are good. Those are things that I don’t know that I necessarily would have thought. I probably would have looked at what doctors, but I don’t know that I would have looked at medication and stuff like that. So, that’s useful. Thank you. I’m also someone who doesn’t take a lot of medication, so it’s not top of mind and that’s probably why I wouldn’t have considered it, but that’s important to think of about.

[00:15:00] KB: Yeah. But if you have employees that take medications on a regular basis, it might be something to consider for them.

[00:15:08] AW: Yeah, absolutely. And just as a refresher or reminder, it is required by California or by Federal Law that we have an insurance option, right?

[00:15:16] KB: Correct.

[00:15:17] AW: Yeah. So, it makes sense then to talk to you or someone like you about what the options are for carrying insurance through your business. Yes, I guess I tried to say that as a question, but it came out more of a statement/question, but please go ahead with your response. I didn’t set you up very well, for that one.

[00:15:35] KB: Something that isn’t well known is that you can only receive subsidized insurance from one place. So, if an employer offers their employees and their dependents and spouse coverage, the dependents and spouse cannot go to Covered California and get subsidized health care, even if the employer doesn’t subsidize the dependent and spouse. Now, they are trying to change that. But it has not changed yet. So, if you’re offered insurance by an employer, you cannot – you do not qualify for assistance through Covered California. And if you do apply through Covered California, they’ll make you pay it all back at the end of the year and that could be a very large sum of money. So, that’s something to consider. That’s one of the things I talk to employers about, because if there is one way to circumvent that, is if you go through the Covered California exchange for your small business plan, and you exclude spouses and dependents, then the spouse and dependents can go to Covered California individually and get assistance through there.

[00:16:39] AW: Got it okay.

[00:16:42] KB: Yeah, you can be one or the other, but you can’t be both.

[00:16:44] AW: Can’t have both. Yeah. Okay. I mean, that’s extremely useful, which, again, I think is another point for why you would want to talk to an insurance broker who knows what they’re doing. Just to let people understand, the payment or just how a broker operates, it’s my understanding that you have access to a number of different plans. And then you would help people figure out what plan works for them. But you’re not necessarily incentivized by a particular plan. You don’t have to be loyal to any one plan, because you have all of them available to you.

[00:17:17] KB: Correct. Yes, I’m an independent broker. So yes, I work with all the different companies. I do not charge clients anything for my services, as soon as you sign up for something through me, whatever insurance company that is, will pay me a stipend for helping you enrol and that’s how I’m paid.

[00:17:35] AW: Yeah, that’s good. That’s good. So, is there anything else that you think we need to know as business owners? Looking for insurance in the near future, what else do we need to know?

[00:17:45] KB: I would say, just don’t be afraid to use your broker. A lot of times I see business owners, that they might work with a broker to get set up. And then, they think they can’t contact the broker again afterwards for questions or whatever. We’re here to help the business owner year-round. It’s not just a one and done, and you’ll never see us again, and we’ve moved on to the next person, kind of thing. It’s a relationship that we build. If there’s problems, you call your broker, the broker helps you work through them, either fixes it for you, or helps you find a way to fix it.

Now, that there are a lot of problems. But like today, I had somebody who was trying to download their Summary of Benefits for their employees, and they couldn’t figure out how to do it, and so they called me. So, no problem. I downloaded it, and shipped them off to them, and it saved them a lot of time trying to figure it all out. Use your broker. That’s what they’re there for.

[00:18:41] AW: Got it. Okay. Yeah. And it seems like also, at the end of the year, if somebody wanted to make a change on a plan, they could just go right back to their broker and say, “These are the things I like, or these are things I didn’t like, what else is out there?” And you already have that relationship with them. So, I imagine it’d be easier to make those changes.

[00:18:56] KB: Absolutely. Yeah, because we’ll already have all the information in our system, we can just switch you over.

[00:19:03] AW: Yeah, perfect. Okay. Well, thank you, Karen, so much for your time. If people want to reach out to you, which you all should definitely reach out to Karen and see about health insurance even if you’re not sure that you can afford it yet. I think it’s probably worth having a conversation about. So, where should people or how should people reach out to you?

[00:19:21] KB: Well, they can go to my website at pronoeo.net. That’s P-R-O-N-O-E-O.net. Or you can email me, karen@pronoeo.net. My direct phone number is (707) 293-6108.

[00:19:38] AW: Perfect. You all got a phone number. You’re not getting my phone number, but you got Karen’s phone number, so do not hesitate to use it. Karen, thank you so much. This is something that we definitely needed, that we just don’t have this information often readily accessible. So, we really appreciate you being here with us today. Thank you. Thank you.

[00:19:55] KB: Thank you for having me. Asha. This is fun.

[00:19:57] AW: Of course.

[END]