Entrepreneurship & Small Business

Health insurance for 1 person small business

  • Last Updated:
  • Nov 8th, 2017 4:18 pm
[OP]
Newbie
Oct 19, 2013
19 posts
2 upvotes
Toronto

Health insurance for 1 person small business

Hi, I established my own company working as a contractor for about 3 years.
Never thought about buying insurance for company so I can use it for massage, dental and also coverage for families until now.
Any recommendation and approximate cost? Thanks
7 replies
Sr. Member
User avatar
Jan 8, 2009
807 posts
66 upvotes
GTA
littleStrong wrote:
Nov 7th, 2017 12:02 am
Hi, I established my own company working as a contractor for about 3 years.
Never thought about buying insurance for company so I can use it for massage, dental and also coverage for families until now.
Any recommendation and approximate cost? Thanks
Traditional plan would be in excess of $300 a month for a family coverage. You can use Brock health as an alternative.
Insurance & Financial Advisor

All posts on this forum are for information purpose only and can't replace your policy contract. Please contact your own broker, agent or company before acting on my suggestions. There is more to insurance than just price!
Deal Addict
Feb 29, 2012
2662 posts
1395 upvotes
Richmond
Check if there are any industry associations you can join that offer group coverage. That's often the cheapest way to get into a group.

But honestly if you're thinking of health insurance as a way to cover routine expenses like the ones you listed, you're dreaming. You think insurance companies are charities? Quite the opposite - they'll charge you double what those routine services cost to make their profit. Insurance is only useful to cover catastrophic expenses that you couldn't afford to cover yourself. At best you might come out slightly ahead if you can manage to get into a group which has much lower average costs than you, such as mostly young people with no families who don't use their health benefits.
Sr. Member
Feb 25, 2007
905 posts
363 upvotes
Ottawa
Agree with the above.

A bit of an explanation.
Employer-provided health insurance exists for 2 reasons.
1. Spread out the risk of huge covered expenses
2. Pay health expenses, small or large, with pre-tax dollars (without the 3% of income limit that applies if you claim health expenses on your personal taxes)

#1 can only work if there is a large enough pool of covered people that the healthy ones (or their employer) pay for the less healthy ones. If you are a sole prop, there will always be the question why you specifically want coverage, i.e. you will be (or appear to be) a poor underwriting risk and so get either very limited coverage, or obscenely high rates, or both.

The alternative is something like Brock Health, which addresses #2. You self-fund your actual health expenses with your corporate money, pre tax, and the "insurer"/processor (Brock Health in this case) pays you back personally, taking a small cut.

Bottom line - you can get the govt to chip in on your massages and dental work, but you can't average it out over an insured pool of one.
Deal Fanatic
Aug 29, 2006
6761 posts
975 upvotes
Brock is the way for a 1 man business since anyone living with you can claim
The Devil made me buy it - RFD. :twisted:
[OP]
Newbie
Oct 19, 2013
19 posts
2 upvotes
Toronto
So there are two options now:
1. Brock Health
2. Group coverage.

So the benefit of Brock Health is for tax reduction because it is considered expenses.
For the group coverage, I belong to an alumni group and did some quote online. The monthly premium for a family of 3 is ranging from $160 to $300 depending on the package (basic/bronze/silver/gold). Is it a normal premium?
Deal Guru
Aug 2, 2010
10949 posts
2176 upvotes
houska wrote:
Nov 7th, 2017 1:05 pm
Agree with the above.

A bit of an explanation.
Employer-provided health insurance exists for 2 reasons.
1. Spread out the risk of huge covered expenses
2. Pay health expenses, small or large, with pre-tax dollars (without the 3% of income limit that applies if you claim health expenses on your personal taxes)

#1 can only work if there is a large enough pool of covered people that the healthy ones (or their employer) pay for the less healthy ones. If you are a sole prop, there will always be the question why you specifically want coverage, i.e. you will be (or appear to be) a poor underwriting risk and so get either very limited coverage, or obscenely high rates, or both.

The alternative is something like Brock Health, which addresses #2. You self-fund your actual health expenses with your corporate money, pre tax, and the "insurer"/processor (Brock Health in this case) pays you back personally, taking a small cut.

Bottom line - you can get the govt to chip in on your massages and dental work, but you can't average it out over an insured pool of one.
Exactly. Insurance companies are not going to insure 1-man companies so they can lose money.
Deal Addict
Aug 28, 2007
1806 posts
223 upvotes
Calgary
Both options are tax deductible as business expense.

With group coverage you will pay monthly premiums, submit claims, and you'll get back "somewhat less" than that ( or else the insurer would go bankrupt). The type of plan (gold, silver etc.) will dictate the size of the premium, which in turn determines the size of "somewhat less". If you pay a higher premium you'll get more things covered. Generally, the premiums amongst insurers for similar plans are reasonably comparable because in a competitive market one insurer can not be so low priced as to get all the business. So Yes, those $160 to $300 per month figures are probably reasonable.

So if you think about this, for everyday medical expenses you are really just getting a portion of your own money back. The key reason why you'd opt for a group plan is if you are really worried about a catastrophe where a huge expense will exceed the monthly premiums.

On the other hand, if you are not worried about a catastrophe and just want to have your business cover the cost of the everyday expenses for your family, then a flat fee PHSP is more practical.

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