With healthcare costs still on the rise, more people are going outside the confines of the workplace for cheaper coverage. According to the latest U.S. Census Bureau report, 62 percent of Americans are covered through an employer.
Brian Nelson is part of the 38 percent who are not.
Nelson started working at his brother's mixed retail-dining shop, M.A. Simms, in Tyler last year. But, to date, he still hasn't signed up for the company's insurance plan. The reason -- he's paying almost one hundred dollars less on an individual insurance policy.
"Healthcare has just spiraled out of control," he says. "I know after dealing with my brother here, that it's hard for small businesses to offer good health care plans to employees." In fact, Brian's brother and employer, Brett Nelson, says only two of 12 eligible employees opted for group coverage. The rest are buying individual policies or foregoing insurance all together.
"I removed my own family," says Brett. "I can go out and get a policy for my family for less than if I stay in the group plan."
Insurance agent, Rowdy Nutt, with Bosworth & Associates says a weak economy and higher doctor and prescription drug costs fueled the rate hikes, causing companies to pay more.
"It really poses some difficult questions for an employer, whether or not they're going to be in a position to offer those benefits," says Nutt. Nutt believes the solution is shopping the market and eyeing new coverage plans for the future.
"We're seeing higher deductibles coming into place. From a tax standpoint, we're trying to look at other ways we can offset some of the cost," he says. "I think we're going to see more insurance companies offering plans that are partnerships. You'll pay smaller costs up front, and then from a catastrophic standpoint, we'll see the companies step in."
For now, Brian Nelson copes with a pre-existing back condition using his individual policy for coverage. His brother Brett, like other small business owners, is coping with high insurance rates by hiring more employees part-time.