DISCUSSION / BACKGROUND:
As self-employed individuals, most Realtors® are forced to purchase their health coverage in the individual insurance market (or small group insurance market for those with employees), which are often more volatile and more expensive than the large group market - where most large employers purchase coverage for their employees.
Based on a survey of members by the Virginia Realtors®, more than 7,000 Realtors® in the Commonwealth have been forced to make the decision to go without health insurance, largely because of the high costs associated with obtaining coverage.
With nearly half of the population getting insurance coverage from employers (49 percent), the market for large employers tends to be more stable and offer better health care options at lower costs. So, how is the large group insurance market, where employers purchase insurance more affordable than individual markets, where many Realtors® purchase insurance?
- The economies of scale benefit employers. The more employees participating, the more power the employer has to bargain with insurance companies for better coverage and lower premiums.
- Federal law imposes fewer regulations on large employer plans, which allows for more flexibility in plan design to reduce costs.
- As an employee benefit, some employers may subsidize employees' health coverage, which also keeps costs down.
- There are administrative savings, such as streamlined billing, which promotes efficiency and allows employers to devote resources for other uses without jeopardizing health insurance services.