Health Insurance

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Oct 29, 2007 3:01 pm

The biggest issue I have had since going Indy is getting Health Insurance for me and my family.  After going the Chamber of Commerce Route and their 20% a year increases I am hunting for coverage again.


I noticed where LPL is going to offer a group policy to its brokers and was wondering how that would work.  RayJay keeps telling me that the IRS would term us employees if we did.  Does anyone know about this??


 
IndyEDJ
Oct 29, 2007 5:33 pm

Apparently, LPL doesn't see it that way, as we are going through open enrollment as I write.  The rates may suck, in which case, I'll stay where I am.  I'll let you know when I find out what my rates are...

Oct 30, 2007 9:20 pm

My rate for a family, with the copay 1 option (basically the most expensive option), is $1150/month. I'm currently paying about $1050/month through another provider under a small group plan. I'll be making the switch. I also added $50K in life insurance for $5/month.

Oct 30, 2007 9:33 pm

My rates for a family plan (wife & one daughter) was from $470 to $740/month, depending on what option I chose.  I'm still debating it as I'm currently paying $316/month, although it's just cat coverage ($911 deductible per event, 80/20 on the next $5K).  I have a health license, but I have no idea if these rates are decent...anyone here care to opine?

Oct 31, 2007 8:00 am

the rates lpl's sub introduced do suck. hell an hsa runs about $900/mth! I pay $455/mth for family of 4, limited to 6 dr visits per year for each family member. I'll be staying with what I got.

 
Oct 31, 2007 8:34 am

From what I understand these programs are not underwritten on a 'group' basis for the entire group of all LPL advisers...but rather for each "office" that applies as a group.  That is how they can offer this to us without endangering our status as independent contractors(as opposed to employees).  That is also why the rates may not be so good.

Hey-at least they are offering us the choice.

Oct 31, 2007 12:33 pm
joedabrkr:

From what I understand these programs are not underwritten on a 'group' basis for the entire group of all LPL advisers...but rather for each "office" that applies as a group.  That is how they can offer this to us without endangering our status as independent contractors(as opposed to employees).  That is also why the rates may not be so good.

Hey-at least they are offering us the choice.

 
Absolutely.  For certain, it's a lot better effort than RayJay's white flag.  Thanks for clearing up the mystery...I'd wondered why one firm said it couldn't be done when the other firm was doing it.  I like how LPL at least tries to think outside of the box on these issues...
Oct 31, 2007 9:17 pm

is this why more people don't go indy?

Oct 31, 2007 11:38 pm

I don't think this is the main reason why more advisors don't go indy. I think the main reason is that very few people are capable of, or interested in, running a successful business. Many people are perfectly happy being employees and having somebody else deal with "running the business". Rising health care costs is affecting everyone right now. Not just small business owners (indy reps). Just my opinion anyways.

Oct 31, 2007 11:45 pm

It could be why more small producers don't go indy, but I don't think it will slow down anyone of a reasonable production level.  Let's say I'm a $300K producer...not huge, not small.  If I'm employed and taking down 40%, I make $120K.  If I'm independent, I take down about 2/3 of my gross or $200K on the same production.  Even at $1,000/month out of pocket for family coverage, I'm still miles ahead of where I was as an employee.  That's very simplistic, but I think it illustrates that to most indy candidates of decent production levels, paying for health insurance is a non-issue.

 
On the other hand, I will tell you that paying for health insurance is by far the biggest reason, in my experience, that people delay retirement.
Nov 1, 2007 7:55 am

I have a friend who is an RIA. I have been with my B/D for 2.5 yrs, 15M AUM trailing 160K. He likes what he sees (I started with zero) and wants me to be an IAR with his firm. I would be indy, not employee. He would pay me a draw to begin. I like the idea of fee only discretionary platforms. Health insurance is covered by my wife's great job. Anyone else try this at an early stage?

Nov 1, 2007 8:19 am

newnew,

Here are a few things to consider. 

When you say he would pay you a draw, the key is a draw of what?  In other words, for each dollar in revenue you generate, how much do you keep and how much does he get?

Secondly, what expenses are you responsible for, and what exactly can you expect in the way of support and services for those expenses?

Third, what percentage (approximately) of your business is currently fee based? 


Nov 1, 2007 4:04 pm
Indyone:

It could be why more small producers don't go indy, but I don't think it will slow down anyone of a reasonable production level.  Let's say I'm a $300K producer...not huge, not small.  If I'm employed and taking down 40%, I make $120K.  If I'm independent, I take down about 2/3 of my gross or $200K on the same production.  Even at $1,000/month out of pocket for family coverage, I'm still miles ahead of where I was as an employee.  That's very simplistic, but I think it illustrates that to most indy candidates of decent production levels, paying for health insurance is a non-issue.

 
On the other hand, I will tell you that paying for health insurance is by far the biggest reason, in my experience, that people delay retirement.

First, I'm not an expert on this area, so correct me if I am wrong.  I don't think that the cost of insurance is the limiting issue for a family in reasonable health.  But if you have a member of your family with a serious medical issue, just getting coverage for that condition at all is a serious problem with individual insurance.  Moving from group insurance to group insurance it is not an issue. 


This seems the big benefit to me, and it is a HUGE benefit if I see it right.  I don't think I could get coverage for my son's medical problems unless either my wife or I stay in a group plan.  Therefore, going to RayJay, I would either have no coverage for the one issue I need it or I would have to move to the state plan for the "uninsurables", which I assume is exorberantly expensive.  If I go LPL, I get to keep health insurance similar to what I have now, albeit without my employer subsidizing it anymore.  For me personally, it would be a no brainer to go LPL if I went indy.
Nov 1, 2007 7:53 pm
newnew:

I have a friend who is an RIA. I have been with my B/D for 2.5 yrs, 15M AUM trailing 160K. He likes what he sees (I started with zero) and wants me to be an IAR with his firm. I would be indy, not employee. He would pay me a draw to begin. I like the idea of fee only discretionary platforms. Health insurance is covered by my wife's great job. Anyone else try this at an early stage?



How can he pay you a draw if you are not an employee?  I'm not sure that would wash with the IRS or the DOL...

Nov 2, 2007 5:48 am

good point. lawyers will be involved, but aren't yet. My hope is to do this by June 2008- the word "draw" is perhaps incorrect; I am unsure. The idea is to go indy early with someone to show me the ropes and share office $ and also use his assisant (s).

Nov 8, 2007 11:49 am

If you are looking at going into an existing branch, you might want to work on a percent overide of your business plus desk rent.  For example 15% override to the OSJ and a desk rent for office expenses of $1,500 a month without an SA (BOA).  Bottom line, forget the transition pay and use your own savings to get going.   More money to you in the end.

Nov 8, 2007 9:41 pm

Sorry..I put this on the INDY side of the forum, before I saw this tread...here is my 2 cents.

 
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Nov 13, 2007 10:19 pm

You should all strongly consider the benefits of HSAs.  I have a family of five (myself, wife & three kids).  My premium is only $569 per QUARTER.  Yes, the family deductible is high, this year it is $5600.  If we ever reach this deductible then the insurance covers 100% of expenses above it.  Do the math...these HSA plans are no brainers.  I then have the ability to contribute the amount of the deuctible ($5600) into the HSA account and deduct it from my taxes.  Of course, these plans are for those of us blessed with reasonably good health.

Nov 14, 2007 11:06 am

The HSA's seem like no-brainers, unless you have a monthly prescription. That will quickly eat your savings!

Nov 14, 2007 4:56 pm

I have two monthly prescriptions.  Use generic drugs for both.  Get a three month script on each at Costco for $10.  Hell, I used to pay a $25 copay each month on each script.  Now, if you can't get a generic I understand.  But still, even if you spend $100-$200 per month on scripts you are better off than paying $800 a month in premium so you can pay a $25 copay on your drugs.