How Will Federal Rule Changes Affect You?

Sole proprietors, get ready. You now have one more thing to sort out in your business: how you buy health insurance. Effective January 1, 2016, the Affordable Care Act (ACA) redefined the meaning of “small group.” According to the new rules, sole proprietors now fall into one of two health insurance categories: small group purchasers or individual purchasers.

Why is this important?

“If you think about the Rhode Island economy, small business immediately comes to mind because it is the lifeblood of Rhode Island,” said Melissa Cummings, senior vice president and chief customer officer at Blue Cross & Blue Shield of Rhode Island (BCBSRI). The state’s well being is directly tied to the health of the business community.

To know where a business fits under the change, understand the primary difference between these two groups—number of employees.

“A sole proprietor can retain their ‘small group’ status if they employed at least one person during the preceding calendar year and they continue to employ at least one person (who is not a spouse of the owner) on the first day of their annual health insurance cover period,” explains George Tager, manager of small group sales at BCBSRI. In this case, nothing changes for the small business.

The owner of a business that has no employees, regardless of incorporation, must purchase coverage in the “individual” market. This change actually presents business owners with a range of options for various budgets, so they should learn what their choices are. They also can use HealthSource RI (HSRI), the state’s health insurance exchange, and may be eligible for federal tax credits.

These credits can help reduce the cost of individual coverage, but you need to be careful when you apply for them. They are based on net income, and if you suddenly find your income higher than expected, you will need to contact HSRI and make adjustments to avoid having to pay back some, or all, of the tax credits.

Although change is not always welcomed, opportunity is. Many of the people who make up the lifeblood of Rhode Island are currently facing change in how they insure themselves and their families. But with this comes the opportunity to better understand their medical and dental insurance needs.

About Blue Cross Blue Shield of Rhode Island: 

Blue Cross Blue Shield of Rhode Island (BCBSRI) is committed to assisting small business owners through this transition. “We proudly provide coverage to 95% of sole proprietors in Rhode Island, giving them all the information they need to get the right plan,” said George Tager, manager of small group sales at BCBSRI. “We know the new federal regulations can be confusing, so our top priority is to help small businesses understand how the rules affect them.

“We’re already contacting small businesses that might be affected,” Tager added.

BCBSRI has put special emphasis on customer service, adding phone service seven days a week and recently opening its third Your Blue Store retail location. You can ask questions face-to-face at Your Blue Stores in Bristol, Lincoln, and Warwick.

Sole proprietors who start purchasing their insurance as individuals will continue to enjoy the same BCBSRI value-added features they received as small group purchasers, like CVS/pharmacy discounts and the 24/7 Nurse Care Line. They also can purchase medical and dental coverage together with just the one Blue Cross card.

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