Posted by Wayne-NC on December 15, 2004 at 07:31:15:
Let me bring up another analogy.The situation that you discribe is similar to this country, states, towns etc. As more and more deadbeats ie liabilities to the country move in or are created, taxes rise to pay those “claims” causing the “assets” to society to migrate to greener pastures if you will. Does this sound familiar to your example? For specifics, watch California and Florida. SOS, save our society.
Full-time Investors - What about BENEFITS? - Posted by jon
Posted by jon on December 14, 2004 at 12:38:57:
To all the full-time investors out there - how do you all handle personal insurance such as medical insurance, dental, vision etc. ?
BENEFITS? - Posted by JT-IN
Posted by JT-IN on December 14, 2004 at 20:11:37:
Jon:
You purchase a high deductible, low cost plan with catastrophic coverage. 5K or 10K deduct, with NO Dental or Vision. The cost of this plan will be minimal, and you are self insuring for the smaller risks, and paying premiums for the catastrophic risks. Providing that all in the family are relatively healthy, you should be money ahead with this approach… Also consider a plan that offers the Medical savings acct as an option, so that that fund can c/f those smaller expenses.
Regardless of which way you go as an individual, or small company, you are saddled with the issue of medical underwriting in order to qualify for a plan. If you would happen to have someone in the family unit that has a health problem, obtaining coverage at all, can be a nightmare… For those situations, it almost forces someone in the unit to be employed/insured with a larger employer… if even part time, to obtain guaranteed issued, non-underwritten coverage at standard or group rates. For this very reason, my wife works 20 hrs per week… for those 20 hrs per week, she is paid 25 per hr in benefits… as the best quote that was able to be obtained for us was 2K per month for maj med coverage. (and neither of us have any serious med issues)
Some of the other suggestions are good, with the use of several different entities paying bens for you, but the core issue is if you are now healthy enough to buy insurance, and if you will be healthey enough next year, to keep you insurance… These are major, major risks to a small group, small business. They are experience rated each year… hence, if you have a bad claims year, your next years premium is rated based upon this years claims history. A catastrophic illness in a small group can price you right out of your coverage in a year or two… Few folks truly understand these risks…
Wish you luck on finding the program that works best for you… Hate to lay the heavy news out there, but this is part of assessing your risk and asset protection, so best to understand the true risks posed before you as a small business person…
JT-IN
Re: Full-time Investors - What about BENEFITS? - Posted by RichV(FL)
Posted by RichV(FL) on December 14, 2004 at 18:04:03:
Jon,
We did the same as Bob in Indy.
We purchased our own insurance and have it under our corp. If you are interested in setting up a corp seek out competent tax and legal professionals for advice.
Bottom line, get it set up the right way and you’ll be glad you did.
Great Success,
RichV(FL)
Re: Full-time Investors - What about BENEFITS? - Posted by Bob In Indy
Posted by Bob In Indy on December 14, 2004 at 17:38:12:
Hi,
We set up a C corp.
That let’s the owners (my wife and I), purchase a group plan.
For any other expenses, like deductibles or co-pays or expenses not covered by the plan, we write corporate resolutions that provide those as benefits to the corporate officers.
That way everything is paid for with ‘before tax’ dollars.
Hope this helps,
Bob Meister
Re: Full-time Investors - What about BENEFITS? - Posted by IB (NJ)
Posted by IB (NJ) on December 14, 2004 at 16:56:27:
Try a group health ins. policy with a major carrier. You have to have at least 2 employees (it could be you ad a partner) but it’s a lot cheaper than an individual ins. policy. I pay $155/mo. I’m single with no kids.
Re: Full-time Investors - What about BENEFITS? - Posted by Jim FL
Posted by Jim FL on December 14, 2004 at 16:30:15:
Jon,
As the other poster indicated, your local REIA should have info on plans, some thru the national REIA I think.
Also, contact local small business associations, chamber of commerce etc, they often have referals for plans you can sign up for when you own a business, and/or join.
I was using a policy thru another local association for small businesses.
However, we’ve since moved to a policy thru my wife’s employer.
She took a job after being ‘bored’, and it offered better benefits than we had.
I have a feeling we’ll go back to the other soon, when she gets ‘bored’ with her employment.
A luxury she has, because I invest full time and we don’t need J.O.B.s
Anyway, HTH,
Jim FL
Re: Full-time Investors - What about BENEFITS? - Posted by Rob
Posted by Rob on December 14, 2004 at 15:40:57:
You purchase your own. Your local investment club may have a plan you can purchase.
all fins feathers - Posted by all fins feathers
Posted by all fins feathers on January 07, 2006 at 10:36:51:
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Re: BENEFITS? - Posted by Wayne-NC
Posted by Wayne-NC on December 14, 2004 at 21:00:30:
JT, with what you discribe here with risk adjustment is much like automoble insurance. This is not really insurance, just a very expensive loan. You just end up paying the company back and then some the next year. I just signed up with Fortis on a high ded plan coupled with a HSA with the tax benefits as you know. I cannot be signaled out for a rate increase. It goes by age. I pay by the year for the maximum savings with tax deductable HELOC funds. Not a bad plan for me and my family.
Re: BENEFITS? - Posted by Rob FL
Posted by Rob FL on December 14, 2004 at 20:37:50:
We have the family plan with Blue Cross Blue Shield. We keep a high deductible of 2K per year, then 80% after that. This keeps the premiums down to under $400/month for our family of 4. Premiums keep rising every year though.
I figure you have to pay the premiums every month, but the deductible doesn’t always get met every year. So why pay higher premimums? The high deductible, lower premiums has reduced our costs significantly.
Re: Full-time Investors - What about BENEFITS? - Posted by jon
Posted by jon on December 14, 2004 at 22:13:22:
I just started investing full-time and created an LLC - which so far I’ve used to flip a few properties.
Do you use a seperate C corp as your main operating company and create sepereate corps or LLCs for flipping and rental properties respectively?
Re: BENEFITS? - Posted by JT-IN
Posted by JT-IN on December 14, 2004 at 21:19:57:
Wayne:
Sounds like you have a good option for now… They rate the group, or Trust, that is comprised of tens of thousands of policy holders that are being issued policies this year, or in a certain period… Then based upon the experience rating of ALL those in that Trust, they arrive at rates for the entire trust for the next contract period…
The falicy, or risk occurs when the healthy folks who are insurable with any new company, shop for better rates after a big increase… then 10 to 20% of the payers leave who aren’t likely to have claims, leaving behind those folks that aren’t portable due to health history or recently developed health problems, wiht a diminishing number of premium payers.
Then the remaining folks have higher and higher claims, resulting in yet higher premiums, which results in yet more folks who drop out of the group, and it goes on… until there is the last man standing… paying pure claims, plus admin costs… or self insurance…
Of course this is a dramtization, but I have seen folks who cannot move to a new company after being in a similar Trust for years… their rates are many times over that of a new applicant… It is just the way that it is… The answer, stay healthy and maintain the ability to shop for insurance, when the rates go up…
All the best to you…
JT-IN