Self Employed Spouses and Insurance

The Affordable Care Act's full implementation on January 1st, 2014 significantly changed the health insurance landscape for many Americans. The new law's requirements that there be no pre-existing condition discrimination helped millions of Americans gain long overdue access, and was especially helpful for people with disabilities  and chronic conditions. Really though, prior to 2014, insurance companies could discriminate against people due to any pre-existing condition. I wrote in a prior blog post about how in my mid-20s and very healthy, I was denied an individual plan due to a resolved sports injury and mild depression. 

One of the unintended, and I would argue unforeseen, consequences of the ACA was that insurance companies decided to use omissions in the law's language to refuse coverage to part time employees and groups where only the owner and their spouse or immediately family were applying. This meant that many owner-operated small businesses (the Mom and Pop shops of yesteryear) couldn't buy a group plan. Instead, they would have access to the Marketplace. Up until 2018, this was a good option and equally cost effective as the old group plans. However, as we keep seeing pricing increasing, the Marketplace is no longer a viable financial option for owner-operated businesses with income over $65,000 per year. 

As of recently, one intrepid insurance company in Wisconsin has decided to allow small business insurance plans for spouses/immediate family operating their small businesses. This is welcome news, as employer-based plans are tax deductible for the business. The plan is Level Funded, which means there is medical underwriting. Rates are determined by the health of the group. But finally, spouses running a business will have some access to health insurance. I can only hope other companies follow suit, soon. 

​Sadie Tuescher, owner