Business Owners Who Pay 100 Percent of the Cost of Medical Insurance

This section is for business owners, either self-employed or owner/shareholders of a Sub S Corp., Limited Liability Company (LLC) or Partnership who pay 100 percent of the cost of their medical insurance, (i.e., the company’s contribution for their personal health insurance comes out of their own pocket one way or another).

Business owners pay for their health insurance either with their company’s check or with a personal check – two checking accounts – one person picks up the tab. Also, while the Federal government forbids companies from paying the cost of Medicare and Med Sup plans for an employee; business owners can pay these costs for themselves out of their personal accounts and not violate the law.

This gives business owners more flexibility. For them, it’s a simple calculation: which costs less the amount they pay for health insurance on the group plan or if they were to enroll in Medicare and get a Med Sup and Rx plan. The dependents of business owners who are enrolled on the group plan would go on COBRA or Cal-COBRA. The business owner would likely pay that cost. So, to determine the total financial impact of switching to Medicare, an owner with dependents must include the cost of dependent coverage under COBRA or Cal-COBRA plus the monthly cost of Medicare and a Med Sup plan.

In addition to the cost comparison, a business owner must compare the benefits of the group plan with the coverage of Medicare with a Med Sup. Typically, Medicare and a Med Sup plan pay very well (i.e., very low or no deductible plans with very little financial exposure when someone seeks medical care.)

Conversely, business owners often enroll on very high deductible plans in their group medical plans so they’ll pay a very low monthly premium for their health insurance. For the business owner, it may be that Medicare is a lower cost option when combining the rich benefits of Medicare and a Med Sup with the relatively low premium.

We’re happy to help you figure out what to do. Just make us the agent for your company’s group plan and/or enroll in a Medicare Supplement or Medicare Advantage plan through It only takes a letter on your company’s letter head and will work on your behalf. Give us a call (800) 746-0045.