Despite the continued political battles over the Affordable Care Act, or “Obamacare,” it remains the law, the marketplace for insurance still exists and enrollment starts Wednesday.
Farmers in most of the country are left largely with the same health-insurance options they have faced in the past when it comes to the law, though a new experiment is starting in Minnesota with a farmer health-insurance cooperative.
The idea of a farmer health-care cooperative had been kicked around in Minnesota since 2009 but had faced multiple regulatory stumbling blocks. At the end of last year, Minnesota farmers complained to state lawmakers that the insurance exchange was collapsing down to one insurance option across much of the exchange and as many as seven counties in the state were looking at no insurance option. Minnesota lawmakers passed legislation last spring specifically allowing farmers and their employees to form a health-care cooperative.
“It will fill a need in the individual marketplace for the people who have gotten hammered by the premium increases,” said Gary Wertish, president of the Minnesota Farmers Union. “This is where all the farmers fall, and this is an attempt to correct that.”
HOW IT WORKS
The cooperative, called 40 Square, is a self-insurance plan that operates like most insurance policies with a deductible, copays and a percentage of out-of-pocket costs. Deductibles and out-of-pocket costs are waived for routine preventive care, and there are standard costs for prescription drugs. A summary of 40 Square plans offers annual deductible options for families from $3,000 to $13,100 in different plans.
To sign up for 40 Square, a Minnesotan has to farm and have at least one common-law employee — a person who receives a W-2 for working on the farm. If the insurance is attractive, a farmer who is a sole proprietor might consider working with an accountant to provide a seasonal contractor, or relative, with wages and taxes withheld to issue a W-2 rather than treat that person as an independent contractor with a 1099 form.
“If your spouse does the books and you issue him or her a W-2, you can consider the farm an employer with a common-law employee,” said Charlene Vrieze, project manager for 40 Square.
Farmers require an employee because the cooperative is regulated under a Department of Labor regulation dealing with employer-employee benefits.
Farmers also purchase stock to join the cooperative, which amounts to a $100 voting share stock and a $1,000 common stock, which will be paid throughout the first 12 months of membership in 40 Square. The cooperative also requires farmers to offer 40 Square insurance to employees for at least three years.
“That’s a requirement by the state because the state wanted to see as stable a pool as possible because it’s new,” Vrieze said.
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