Adviser health insurance options exist

NEW YORK — Most financial advisers wouldn’t expect to find health insurance in the same store where they buy lumber and fertilizer, but it turns out that the folks in orange aprons really can help with just about anything.
Since it was launched in June, hundreds of small-business owners have signed up for health coverage through The Home Depot Inc.’s Business ToolBox program. The program, which is open to any small-business owner, requires participants to pay for the insurance, but it allows them to take advantage of the Atlanta-based retailer’s group rates.
It is an especially attractive option for advisers coming out of an employer group plan, said Alexander Cudzewicz, a principal of Oak Brook Asset Management Corp. in Scottsdale, Ariz., which manages $10 million in client assets.
“Since the adviser would be going from one corporate plan to another, pre-existing conditions can’t be excluded under [the Health Insurance Portability and Accountability Act],” he said.
Covering pre-existing conditions — along with sidestepping the extremely high cost of individual health insurance — are keys to obtaining desirable coverage, observers noted.
BenefitProtect LLC in Phoenix administers the Home Depot plan, which offers individual and group coverage in all 50 states and is underwritten by many health insurers, depending on where the adviser’s business is located, noted spokesman Jerry Shields.
Among the insurers are Aetna Inc. in Hartford, Conn., Assurant Health in Milwaukee and Humana Inc. in Louisville, Ky.
Insurance for commissions
Advisers also may obtain health insurance from MyBizOffice Inc., which offers coverage to “commissioned professionals,” including financial advisers, insurance agents and real estate brokers, said Gene Zaino, chief executive of the Herndon, Va.-based company, which provides “employer of record” services to independent contractors.
Many of its adviser clients are affiliated with Genworth Financial Inc. in Richmond, Va.
Advisers who are new to the business or who recently have started their own firm have said that finding affordable health insurance for themselves and their family is a vexing and costly problem (InvestmentNews, March 26).
The MyBizOffice plan is available to advisers with more than $60,000 in gross annual commissions. Genworth’s program mandates $80,000 in annual commissions.
Those with less commission income may apply but are charged additional fees.
The advisers become employees of MyBizOffice and receive back-office services — including benefit program eligibility — in return for 3% of their commission income, Mr. Zaino said.
“The adviser opens a bank account and runs the business through us,” he added.
Coverage, which is underwritten by Aetna, includes health, dental, disability and vision at “true group insurance rates,” Mr. Zaino said.
Premiums are much lower than in individual plans, and there is no individual rating, he noted. Premiums vary widely, depending on the state, but a ballpark figure would be $200 to $400 per person annually, Mr. Zaino said.
That compares favorably with individual and (Consolidated Omnibus Budget Reconciliation Act) premiums, which can be 10 times that or more, observers noted. The firm’s website has a feature that calculates premiums according to the adviser’s ZIP code.
There is no problem with covering pre-existing conditions, as long as there was no time gap in coverage between the adviser’s former group plan and the MyBizOffice plan, Mr. Zaino said.
Plans such as these are great for new planners just getting into the business or going out on their own, Mr. Cudzewicz said.
They also can be useful to advisers who worked for companies that drop retiree health coverage, he added.