what about health care?
Although my fledgling company is making very small profits, I have to stop operating it, because my family and I need health care. So I accepted a job that offers medical benefits.
What other options are there?
Since you have just accepted a job, it seems too late to investigate other options.
How big is your fledgling company? If you have more than 1 employee you can get group insurance, often through your state's business association, chamber of commerce or other entity.
I used to sell insurance and I know what the costs are like for small businesses - basically, the bigger the group, the less you have to pay, but the smaller the group, the more you pay.
Among the ones I used to handle was AFLAC. Yep, the duck. Of all the stuff I handled, AFLAC is the one I kept - I still have their accident policy for my wife and me. I pay about $52 a month (this is for AZ - prices may be different in other states). It doesn't cover regular doctor visits, drugs, seeing a specialist, but it's there in case something happens - like a car accident, fall from a ladder, accidental stab with scissors (the only things I've claimed) - basically any type of accident and they pay you over and above whatever auto, home, health, worker's comp, etc. insurance pays (they don't pay a doctor or the hospital, they pay YOU).
Truth be told, neither my wife nor I really ever need to go to the doc but maybe once a year and with health insurance rates at around $130 a month for minimal coverage for my wife and I (it costs less than that to see our doctor!), it makes more sense to have something more like car insurance for us (car ins don't pay for gas, maintenance and repair, but they pay for accidents and the like). Now, if you have a family and children or have diabetes or another pre-existing condition, your situation will be different.
Right now, it's the only policy my wife and I have because we can handle basic medical expenses (if my company foots the bill, it's a tax deduction - talk to your accountant), but if something serious happens, we're up the proverbial creek and most health insurance won't cover it anyway.
Obviously, talk with your insurance broker or your company HR person and try looking up your local AFLAC agent for other options, too. If they offer AFLAC, you can get it while u are there, but if you leave, you can keep the group rate. Also, in general, not all insurance is created equal so shop around and don't get bullied into a policy and pay attention to the company's rating (go to insure.com for standard & poor's - you want A, AA or AAA, am best is ambest.com - you want an A- or better), how fast they handle claims, customer service, etc. All very important.
I won't claim to be an expert, but I'm happy to answer whatever questions you have or, at least, point you in the right direction.
I am a one man company, and my Blue Cross PPO Health Insurance is about $10,000 a year for me and my wife, with a $1000 deductable on each of us - no perscription plan, no dental plan. The cost of this plan is the #1 reason I scream at people on Creative Cow who want to do 2K or 4K uncompressed jobs for "budget" prices. It costs money to have health insurance, and the idiots that are willing to work for free on an expensive job, will not be so understanding when they get hurt in a random car accident, and have no health insurance.
If you can't afford health insurance (which is a 100% employee benefit program tax writeoff if you own your own company) then you should not have your own company. My total medical expenses receipts (insurance, dental, perscriptions, regular checkups that don't meet the deductable) for 2010 is HIGHER than my electronics expenses receipts for 2010, (and neither me or my wife are sick) so I take all of this very seriously.
We're in very similar situations. I talked to my Blue Cross rep asking if there was any way to lower the increasing (and increasingly INSANE premiums) and she indicated that if I increased my deductible from $1k to $5k I could lower the monthly premium from $1000 to around $600. That made the "payback" point under a year. So if you have savings or can set aside the extra $400/mo. you're already paying out for a year to cover your deductible, you can at least lower the monthly payment.
Then it's a matter of how much "health care" services you need in the average year. That's the key issue.
But a 1 year payback and a net savings of $400/month was sensible for our family.
My BCBS agent noted that very few people who've been with their plans for a long time look at what they could change to lower their effective rates - they just keep doing what they've done for years. (The SAME thing I did until a billing dispute on my son's coverage caused me to open the dusty file and look at it.)
You mileage may (and probably will) vary.
BTW, I agree wholeheartedly that the newbies that don't run REAL business models with sustainable expenses and who do 4k work at DV prices just because they CAN - are going to wake up some day and wonder why they can't both pay their bills and pay their taxes.
Bottom line here is that Health Insurance costs
are totally out of control.
Our elected officials have not addressed the issue in a sensible
way. Most people here most likely have spent more time selecting
their last monitor than they did selecting their Health Insurance
Policy. This is not because of laziness but because comparitive
shopping is impossible. The fact that Health insurance cannot be
purchased across state lines quarantes a monopoly for a few.
Tremendous waste and duplication of effort. Imagine what would happen to any company we deal with here if they had to set up 50 different entities to sell in all 50 states.
I identify with Bob here, Health insurance is my largest monthly expense. All that said
in a practical sense Choose a high deductable and save the premium
differential, the pay back time will be pretty short and you will
save in the long run. Over ten years ago I increased my Auto
deductable to 1000 and decreased my premium by over 500 and havn't had a claim since, so i'm 5000 ahead. No matter what happens now
I will still be way ahead.
I know a debate on Health Care policy is inappropriate here - however for balance, I'll place a health care opinion along with some video business advice to try to "piggyback" this into surviving the forum admin scrutiny (hi folks - great job as always!)
On allowing policies to be sold across state lines - what would then stop any huge multi-national insurance company from then selling a nationwide LOWEST POSSIBLE COST but ALSO - WORST POSSIBLE COVERAGE policy - effectively circumventing ALL local control over minimum benefits offered in the state?
I bet in 10 seconds any good national insurance lawyer could find an argument, for example, that SKIN CANCER diagnosed for someone living in Arizona MUST be a pre-existing condition because it involves lifetime cumulative exposure - and therefore they'd DENY coverage under your "nationwide" policy - whereby the AZ, CA, and Florida legislatures might REQUIRE such coverage for policies sold in their states.
One could argue that Nationwide Insurance company regulation is more BIG Government. While LOCAL control is a SMALL government view.
This stuff is NEVER as simple as it sounds.
Just like getting business insurance! No reasonable business person practices without appropriate insurance in place. IN fact, at some point in your career you'll likely be REQUIRED to have it. You'll need a "named insured" certificate to shoot in a government building or to work on a large project involving a public space. So the point of this thread is to help the new guys understand that if you're building your business by offering high-end products at CUT RATE prices - and doing so by ignoring the typical costs of stuff like business licenses, insurance, legal advice, CPA help, and other typical business expenses and think you're actually COMPETING in the market place - you're not. You've just discovered that your machine can turn out pretty pictures for a small investment - but you haven't yet run into the reality that operating a real business at a real, sustainable profit is SELDOM as easy as it seams.
Still, it's been like this forever - and sooner or later, the guys who undercut will, themselves be undercut - and the market will stabilize with the divisions being between those who've learned the craft AND the business - and those who grabbed the new tool and decided they could simply "do it cheaper" than everyone else.
Well, most insurance companies offer policies that differ little from state to state. The thing is that individual states handle insurance on their own. Each state has an insurance bureau which handles all insurance and financial products (for video businesses). Big companies DO offer nationwide policies, BUT they must first be approved by each state and can vary slightly due to individual state insurance laws. Did you know you can get a policy in another state by going to that state? Most states allow it. If I produce insurance in Arizona and a family member from Minnesota comes down, I can sell them a policy, but I can't go to MN and sell an AZ policy unless I'm licensed in MN (you have to be licensed in the state in which you are doing business), but then I'd be selling the MN version of the policy for that company.
My problem with health care (in the video business) is that everyone wants this incredible, all-inclusive health care policy which covers tons of things they will NEVER NEED and has $0 copays, free drugs, and an unlimited supply of available doctors, dentists, optometrists, specialists, etc. Those kinds of connections come at a price - administration, staff, buildings, utilities, computers, paperwork, insurance adjusters, and other basic costs of doing business - paying out settlements to doctors, hospitals, policyholders, et al. notwithstanding. They're federally and regionally mandated business practices.
For insurance, it costs me just over $1200 a year for me and my wife. My health is my responsibility - I pay for doctor visits (after being on set), the eye doctor, my contacts (so I can look through the viewfinder), my own healthy food (better than donuts and coffee during shoots), etc. Including my out-of-pocket expenses and insurance, I spend about $3000 a year for my wife and I. If I had even a modest health insurance policy, it would cost me well over the $3000 I already spend and I won't be going to the doctor more often or getting a better deal on contacts or getting drugs I'll never take, or actually getting any healthier. In fact, with copays, premiums and deductibles, I'll actually spend MORE on healthcare.
Try this: Ask your doctor, dentist, or optometrist what they charge if you don't have insurance. For me, it was a $265 optometrist visit for my wife and I and $300 in contacts. That's $565 or about $50 a month since I only go once a year. Can you even get an eye plan for that? Wait until myopia is a pre-existing condition... Don't forget, these costs are NEGOTIABLE just like any other business transaction. if you're paying cash, you should pay less - no rigorous, lengthy insurance paperwork, no waiting for payments, just wham-bam...you get the idea. Hell, offer to shoot a commercial for them and turn a $500 doctor visit into a $3500 commercial - good ROI!
I think if most people (media professionals?) REALLY looked at what they were spending, they would realize they were spending more to INSURE their health than the actual expense of caring for themselves. Take that money and put it in a stock, IRA, or (at least) interest-bearing account, get a good term life policy, a cancer policy if there's a risk, an accident policy, improve your auto insurance, check out the various sickness and illness plans and get some professional insurance - it's closer to what you need and costs far less. The overall benefit of health insurance for a small group or individual is just not there from a cost-benefit standpoint and being overinsured is a waste of money. Yes, there are people who have serious health problems and they should have health insurance, but most people are pretty healthy and really don't need it. Insurance companies want lots of very healthy people paying for policies to offset the payouts for unhealthy people on the same policy.
I agree with the idea of keeping costs down by having very high co-pays and deductibles - in my case I pay for everything up to $2500 per year. However ...
Yes, there are people who have serious health problems and they should have health insurance, but most people are pretty healthy and really don't need it.
My totally healthy son, aged 24, doesn't smoke or drink to excess, developed "Spontaneous Pneumo-thorax" - a collapsed lung. After about 3 weeks in the hospital and several surgical procedures he is now perfectly fine and the bills were around 110K. No warning, no family history, nothing - it seems this just "happens" to men in their early 20s.
Insurance is there to protect you from the unforeseeable. The odds are you won't need it - but the question is can you afford to play the odds.
Egads! I hadn't even heard of that one. Yes, that's exactly what health insurance is for and I'm glad you had insurance to handle that as $110k is a lot for even the wealthiest to handle. Again: I'M NO EXPERT! I've had some insurance training and I have my opinions (opinions are like...insert expletive... you get the idea) which, not surprisingly, reflect my personal, professional, and financial situation.
My wife and I take great pains to be as healthy as possible and living in Arizona presents unique situations (like Valley Fever which I've had and it's really not fun). Now, were I in a different situation, I would likely feel different. The larger issue of healthcare in this country is touchy and not likely to present a solid, workable solution in the near future. Part of the reason I decided I wanted to make movies instead and get out of insurance.
We have drifted pretty far off the original post about competing with script-kiddies with hacked software. Again, don't play on their field, make them compete with YOU. They won't be able to compete on quality, knowledge, experience, etc., but can on PRICE. Let 'em. After working for 40 hours on a project and getting paid $200, they'll be in business at that level for a really short time and then either raise rates or just go out of business. They'll be replaced by someone else and this cycle will continue.
Suggestions: if you think (or know) your competition is using pirated software, turn them in. A lot of people say, "oh, I don't wanna do THAT..." Turn them in - think of it as a business strategy. There are stiff fines for using educational software for business use or using a stolen license or an illegal copy. Adobe will very aggressively prosecute license violations. So does Apple, Microsoft, and a host of others. If someone stole your video and made copy upon copy, wouldn't you prosecute? You pay for your software and it ain't cheap. Your competition shouldn't have to resort to illegal activity to improve their edge. I paid for my Adobe Suite, FCS, a stack of other apps and more than a few plug-ins. I'm heading to NAB next year to figure out what I'll spend money on next year. Don't forget to factor in what you plan to spend on software and hardware in your quotes. Think also - they need to have a valid business license in their region - big fines for operating a business without valid licensing.
Now, if they did buy their software and can prove it and still want to charge too little for a project, that's their deal. They obviously have a different business model than you.
I think the "kids", flush with good health thanks to youth, discount the value of preventative care and having a personal doctor check you once a year at least. The kids figure "I'm healthy as a horse now; this money is better spent elsewhere". And so they live on high-sodium foods and over-sweetened drinks and eat a lot of garbage and keep poor hours on little sleep because "whoo-hooo; I'm immortal". No eye doctor checkups, no dental visits, no physicals. Never see a doc except at urgent care, to stitch up an accidental injury or get a shot for an STD.
Anybody want to guess what comes next? Anybody? You there, the middle-aged fat, blind diabetic with the high blood pressure and spine problems, care to make a comment?
The whole idea of preventative care is to monitor your wellness and detect and fix things when they are small and correctable - before they become a more expensive problem later. It is an investment in yourself to invest in your health.
Let's put this into a business perspective for those readers who may be in need of some good business advice:
When you ask "how much should I charge for X?" consider the cost of health insurance as part of your overhead or your burdened labor, depending upon whether you are an independent contractor or an employer.
If you are a independent contractor/sole proprietor/freelance operative, you should have a minimum of health insurance, even a catastrophic policy. Because if your sole source of income is whatever work you alone can manage, and you are injured or serious ill, you are seriously in trouble.
If you are an employer, your burdened labor rate is the rate you pay your employee plus your half of medical, medicare, social security, and retirement premiums. If you don't account for a percentage of those costs in your billing then you have to come up with that money out of thin air.
And if you are an employee of someone else but you set the prices, then you need to know these rates, or at least a percentage overhead charge to add to your labor to get a fair selling price.
And likewise, if you are asked "Why do you charge $3 for a DVD copy? I can buy a blank DVD for a nickel." you can reply, or at least know, that the labor to make a quantity of DVD copies takes someone's hourly wage plus these other additional fees that you as an employer pay for each hour of labor. So it may cost you $45 an hour to make $3 per unit DVD copies. And that's why dvd copies don't cost a nickel.
If you are a sole proprietor, figure that you have to provide similar additional costs to yourself.
So in other words, you should have some form of healthcare. But more importantly, make sure you account for these costs in your cost of doing business.
PS - Please debate the politics of health reform on the Politics forum.
to not have health care.
... or to move to place that prop[erly places it on the open market.
Like Bob, my wife and I pay about 10K in health care a year. Also like Bob, we both run "proper" businesses so it's a 100% company deduction. We didn't turn a profit last year because of health insurance. Because we didn't turn a profit we qualified for some serious tax breaks under the stimulus plan. Another reason to run a "proper" company and get a good accountant. We actually made money, just didn't turn a profit.
Higher Ground Media
Mick said it all - if you are in business, don't go to H&R Block - get a GOOD ACCOUNTANT, and pay him well (it's all a write off anyway).
That saves your behind.