Buying guide: health insurance for real estate agents

Real estate agent health insurance options

Finding affordable health insurance can be a challenge for anyone who isn’t covered under an employer-sponsored or group plan. Self-employed real estate agents are often left to scour health plans on HealthCare.gov under the Affordable Care Act (ACA), searching for the best benefits at the lowest cost. In other cases, real estate agents may be able to buy into health coverage through their broker, through a spouse or family member’s plan, or through a professional association.

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In looking at ACA plans in particular, many real estate agents face a conundrum. On one hand, it offers health insurance where they might otherwise be unable to find coverage. On the other hand, rising health insurance rates and less available subsidies—especially for those who surpass a certain income level—make it difficult to find affordable health insurance options. As of 2019, there are no federal health insurance penalties for not having health insurance coverage.

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HealthCare.gov options

Real estate agents have the option to purchase a health care plan through Healthcare.gov, though this may be the most expensive and limiting option. The best way to navigate health plans on this exchange is to pay attention to the “metal ratings”, which can provide an estimate of out-of-pocket costs. For example:

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• Platinum plans—pay for roughly 90% of out-of-pocket costs
• Gold plans—pay for roughly 80% of out-of-pocket costs
• Silver plans—pay for roughly 70% of out-of-pocket costs
• Bronze plans—pay for roughly 60% of out-of-pocket costs

Also understand that the more out-of-pocket costs covered by the insurance companies, the higher the monthly premiums tend to be.

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Premium Tax Credit Health Insurance Subsidy

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One way to save money on health insurance is to qualify for the premium tax credit health insurance subsidy. To qualify, you must make between 100 and 400 percent of the federal poverty level (FPL). For states that have expanded Medicaid, the lower threshold is actually 139 percent because Medicaid coverage is available for those that fall below that level. The FPL is calculated based on income and family size and a comprehensive chart to find out if you qualify is available here.

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Even if you do not fall into a lower income bracket, you may be able to qualify for this subsidy by reducing your taxable income. Some ways to do this include:

• Max out pre-tax retirement contributions: Those that make less than $122,000 as a single and under $193,000 as a married couple can contribute $6,000 each to an IRA account.
• Become an S-Corp or LLC: Real estate agents should look into these elections as a way to reduce taxable income. With both, real estate agents can deduct business-related expenses. Check with your accountant to be sure you can make certain deductions.
• Own rental property: As a real estate agent, this may be particularly appealing route as you have an edge on finding great properties. Since all expenses tied to operating rental properties are tax deductible—as is the non-cash expense of depreciation—this can be another way to reduce income.

The bottom line is to do your homework. There are many options on HealthCare.gov, but real estate agents will need to do their homework to find the best savings.

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NATIONAL ASSOCIATION of REALTORS® options

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One place to visit if you are a member of the NATIONAL ASSOCIATION of REALTORS®  is the REALTORS® Insurance Marketplace. This shopping site/exchange provides NAR members with a variety of health insurance options, including:

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• Qualified Health Plans that meet the mandates of the Affordable Care Act through major insurance carriers
• Supplemental Medicare insurance options for Medicare-eligible NAR members
• Short Term Insurance ranging from 30 days to 6 months that can serve as coverage to avoid gaps between long-term policies.
• Members TeleHealth programs where members can gain telephone, smartphone app, web chat, or email access to licensed physicians for non-emergency diagnosis and treatment.
• Members Supplemental Health Plans that can be combined with other major medical health insurance plans to provide financial aid for out-of-pocket expenses and other services that traditional insurance might not cover.
• REALTORS® Dental Insurance that provides coverage for dental expenses exclusively for NAR members and their families.
• REALTORS® Vision Insurance that provides a PPO and non-PPO option for NAR members and their families.

How to win the health insurance game

When considering the options above, there are tried and true best practices to help ensure you find the best plan for your needs. We’ve compiled a list of these best practices to help you shop health care plans and find great coverage without breaking the bank.

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Review your options

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Health insurance shopping is often a headache. Many people opt to stay with the same plan year after year simply because it’s more convenient than taking the painstaking time to review a myriad of options. It’s also intimidating to look for better health insurance when many plans are laden with industry jargon that can seem impossible to decode.

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Here’s the thing—plans, benefits, coverage, provider networks, and prescription coverage change all the time. Your needs do, too.  It’s a good idea to keep a finger on the pulse of the changing industry as most plans change significantly each year. You may be tossing more money at significantly less coverage. We recommend that you, at a minimum, take 1 hour to review your options once each year. This keeps you aware of changes happening to your plan (even if you decide to stick with it) and could potentially save you thousands of dollars.

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Take a refresher course on health insurance basics

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Health insurance jargon can be quite complex. It’s not a bad idea to refresh your knowledge on health insurance basics. For example:

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• Deductible—the amount that an individual (or family) has to pay for healthcare services covered under their plan before health plan benefits go into full effect. (Hint: many items considered preventative care is often covered before the deductible. That includes things like physicals, screenings, flu shots, and immunizations)
• Co-pay—a flat fee that individuals must pay at the time of receiving healthcare. This is often broken down with separate fees for office visits, urgent care, and specialist visits.
• Max-out-of-pocket limit—the maximum an insured individual (or family) will have to pay for covered services in the year. Once an individual reaches this amount through paying co-pays, deductibles, and co-insurance, the health plan should pay for 100% of any other covered benefit costs.

It’s also a good idea to understand how your health care plan covered prescription medication. If you require name-brand medication, you’ll want to find a plan that covers non-generic medication. If you don’t require name-brand medication, many drugs are available in generic form, which can be more affordable. Look into the cash price of your prescriptions and see how that compares to the coverage/co-pay of your health plan for that medication.

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Make decisions based on predictable costs

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Shopping for health insurance can be overwhelming. Many people try to game the system and factor in multiple variables and unknowns. The bottom line is that no one can predict with 100% accuracy what will happen in a year. That said, you can make some highly educated guesses based on your current medical history and predictable health care costs. For example, you probably have a pretty good idea about what prescriptions you’ll need, doctor visits, necessary medical equipment, therapy needs, and other specialist care. If you’re young and healthy, you may plan on needing just one or two of these services in a year. According to statistics, 75% of your costs will be made up of these predictable items in a given year.

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On the other hand, unpredictable health care needs (and costs) pop up. You may catch the flu, sprain your wrist, or need to be hospitalized. These may make up the other 25% of costs. When you look at it in this light, it makes sense to choose a plan based on your predictable costs, which will make up the bulk of your health care needs. It also removes the stressful guesswork in choosing a plan that’s right for you. If you’re still feeling stressed about these unpredictables, consider the maximum out-of-pocket costs when choosing a plan. Even if something catastrophic occurs, you will only ever pay this amount.

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Don’t forget to take the self-employed health insurance deduction

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Self employed real estate agents who pay for their own health insurance out of pocket may be able to take a self-employed health insurance deductions. If you qualify, your premiums may be tax deductible. If you work for yourself and aren’t eligible for employer-sponsored health plans through your spouse, you are likely eligible for this deduction. If you qualify, you can deduct 100% of your health insurance premiums paid for yourself, your spouse, and any dependents under 27. If you qualify, this deduction also reduces your adjusted gross income (AGI), which lowers your overall taxable income.In general, you qualify if:

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• You’re not eligible for other health insurance coverage: You can’t take advantage of the self-employed health insurance deduction if you are eligible for an employer-sponsored health insurance plan from your employer or your spouse’s employer.
• You report business income: If you report business income from your real estate business, you should be eligible to claim this deduction. You cannot deduct more than you earn from your real estate business. In other words, if you are not generating income or if you incur a loss, you cannot claim the deduction.

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Find a plan with free primary care

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Due to skyrocketing health insurance costs, many physicians have decided to opt out of fee-for-service insurance model and charge patients a flat fee instead. Known as direct primary care (DPC), this allows physicians freedom from exhaustive paperwork and oversight from non-medical administrators to focus more on spending quality time with patients. The flat fee—which patients pay monthly, quarterly, or annually—covers all routine primary care services like lab work, blood tests, strep throat cultures, and annual check-ups.

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While the DPC model is a great alternative for patients, it doesn’t cover all services, so many patients also purchase a high-deductible policy to help cover emergencies. Some progressive insurers have realized the benefits of this model and now offer plans with free primary care wrapped into their affordable health plans. This hybrid model is a great option for real estate agents, who can benefit from free primary care while also carrying a health plan that will cover other health needs that come up throughout the year.

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Look for open enrollment options

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With the Affordable Care Act, real estate agents have just over a one month window to enroll in or change healthcare plans, starting in November. Outside of this open enrollment window, real estate agents may be able to enroll or change plans in the following special cases:

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• During a special enrollment period because of a qualifying life event
• Via a short-term medical plan
• Through Medicaid or the Children’s Health Insurance Program (CHIP)

Fortunately, alternative insurers are now open year-round open enrollment. Plans offered by these insurers give you the flexibility they need to choose the best, most cost-effective plan for your individual needs.

Health insurance for real estate agents shouldn’t be a headache

At the end of they day, finding an affordable, comprehensive plan shouldn’t be a painstaking experience. While scouring exchanges for good deals and running the numbers on subsidies may be overwhelming, there are alternative options available that make it easy for real estate agents to get insurance.

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According to recent data, the average lowest cost silver premium was $422 in 2019. However, between out-of-pocket costs, higher co-pays for primary care visits, and confusing co-insurance costs, many people are not getting the full benefits they need at reasonable rates.