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HEALTH Insurance
HEALTH INSURANCE INSIGHTS

Costco and Aetna roll out medical coverage to warehouse shoppers.

Costco Aetna health insurance

Being a Costco member has its privileges, including member savings and a wide variety of merchandise. But one of the most prized perks is reserved for small business owners who have a Costco membership. They can qualify for health insurance plans available through a special health insurance marketplace.

Costco's history of partnering with insurance providers offering insurance products to its members isn't new to Costco. Years ago, it provided homeowner, automobile and renters insurance policies to members via Ameriprise Financial. Later, the retailer collaborated with Aetna to offer Costco medical insurance options to qualified members. Aetna was the actual insurer that did the policy underwriting and paid out insurance claims.

Now, Costco has joined forces with Custom Benefit Consultants, Inc. (CBC), an insurance broker that pairs Costco member business owners with leading medical insurance carriers offering health insurance plan choices. The CBC Health Insurance Marketplace for Costco Members website lets eligible applicants shop for health insurance plans and get a quote quickly online. The online portal also has a Q&A section that can answer your questions, plus a glossary section that defines commonly used insurance terms and concepts.

This marketplace is designed to simplify matters for small businesses. But it can also generate savings, particularly for companies with more employees. Case studies demonstrate that some larger clients have saved, for example, 25% in plan costs.

To be eligible for health insurance through CBC, you need to have an active Costco membership. You also need to be a small business owner and reside in a state that participates in this program. Currently, every state participates except for Alaska.

Note that individual and family health insurance plans for non-business owners are currently unavailable through Costco; however, CBC does support these options on their direct-to-consumer portal.

Costco health insurance benefits 

Costco member small business owners can select from medical, vision, dental life and disability plans and other voluntary options.

"The CBC Health Insurance Marketplace for Costco members has created a convenient place for Costco members to go to address all of their questions, proactively research options and make an informed decision regarding the health insurance needs of their employees," says Kenneth Bahl, principal with Custom Benefit Consultants, Inc., in Las Vegas. "We've created an efficient shopping and vendor evaluation experience to help small business owners evaluate carriers, plans and budgeted expenses.">

Carrier and plan options available through Costco/CBC may vary, based on your state and geographic area.

"Depending on your region, all major carriers and many regional carriers are represented," adds Bahl.

How the Costco health insurance process works

Shopping for small business health insurance can be done via the CostcoBusinessQuote.com website. After entering key information about you, your business and your employees, customized health insurance plan quotes are generated. And a health care ambassador is available by phone or chat to answer any questions you have along the way.

"The process is simple. We gather a census of eligible employees, including age, gender and ZIP Code and some very basic company information like location, contact persons and the type of business," says Bahl. "In most cases, our system will return an automated quote from the carriers and plans in your specific area. You can sort through these quotes based on your own criteria, such as monthly premium, deductible amounts or plan types."

Bahl adds that you can use a budget modeling tool on the website to better understand the impact of employer contributions based on either a percentage or flat dollar amount.

Once you're ready to commit to a plan, you can complete the process online or with the help of a health care ambassador available via online chat, phone at (800) 611-9056 or email at costcobusinessquote@cbcins.com.

"Our business portal enables real-time access to the tools needed to manage plan changes and additions and review invoices prior to payment," says Bahl.

You can also count on continued support and guidance from a CBC health care ambassador post-sale.

Your responsibilities as a business owner

Remember: You may be required to provide health insurance coverage to your workers.

"Currently, the Affordable Care Act and other federal regulations do not require small businesses with fewer than 50 employees to offer coverage to their employees," Bahl notes. "But many small business owners continue to shop, procure and offer coverage for several reasons. These include maintaining a competitive benefits package that enables them to compete for talent, offering a richer benefits package that has less out-of-pocket exposure than in the individual market, and providing continuity of coverage."

Congress eliminated the individual mandate penalty that required most Americans to have health insurance. However, a growing number of states have their own mandate.

"Many small group employers find group health insurance plans to be more competitive, more affordable and simpler to access and administer,” says Bahl.

What to consider before choosing a health care plan

Of course, Costco isn't the only source for small business health insurance. It's important to do your homework and shop around carefully to locate the right coverage and benefits for you and your employees.

"Be sure to find a partner who can help you understand the regulatory and market dynamics that can be very specific to where you live," recommends Bahl. "This partner should have the resources to support you and your employees and their families throughout the year, not just before enrollment."

Additionally, carefully evaluate network access to ensure that your preferred providers continue to participate in the plans you are considering.

"Networks can vary greatly, even with the same carrier in particular areas," Bahl cautions.

Also, don't forget to include your employees' input and preferences, if possible.

"Some of your staff may have services planned for the coming year and consulting with them in this process can help them better understand the differences in the options available," he adds.