Health care act could ease some insurance pain for real estate agents

For real estate agents who buy their insurance on the open market, there finally is light at the end of the tunnel.

Unfortunately, the tunnel is 2 years long.

Last month, the U.S. Supreme Court upheld most of the Obama administration’s Affordable Care Act. That means real estate agents and other independent contractors will be able to purchase individual health care plans through statewide exchanges, which aren’t expected to be available until 2014.

But, real estate industry professionals say, the act won’t mean realty companies will be required to start offering health insurance to the agents whose licenses they hold.

The act requires businesses with 50 or more full-time employees to offer employee health benefits by 2014 or face a penalty from the federal government. Jennifer Frontera, president of the Charlotte Regional Realtor Association, said the act is expected to have little to no effect on real estate companies, because most agents are not considered full-time employees.

“I don’t think the law will change the marketplace much to affect the price of insurance,” Frontera said. “That is just one of those things that you (real estate agents) know you will have to do is provide your own health insurance.”

Michael Thompson, a professor in the public health sciences department at the University of North Carolina at Charlotte, said the state exchanges are expected to offer some relief to real estate agents.

“Under the exchanges, they would be in a larger risk pool, so they can get insurance at a cheaper rate,” he said. “The markup on the individual policies has been much higher because the individuals are essentially buying it at retail, where the larger employers are buying it at wholesale.

“One of the problems that the self-employed face is they are kind of priced out of getting that insurance.”

For those Americans who can get health insurance through their employer, the cost can be as little as $100 or less a month.

Until state exchanges are up and rolling, real estate agents who want health insurance will have to continue paying as much as $1,000 a month to buy coverage because, as independent contractors, they aren’t getting health insurance through their employer.

Frontera said she pays about $1,000 a month for the health care coverage she has to go out and buy on her own.

Edwin Wilson, an agent with 5 Points Realty, said he isn’t paying as much as Frontera. But that’s because he opts to have a high-risk insurance plan. He said he pays only $72 a month for his coverage from Blue Cross Blue Shield of North Carolina.

“Since I’m 32, I decided I could go for a high-deductible plan,” he said. “I am in good health, and so I just have that high-risk policy.”

Other agents, like Jose Maldonado, of Keller Williams Realty’s University City-area office, are taking an even bigger risk, going without insurance.

“I’m one of those people who are taking a gamble,” Maldonado said. “I don’t have health insurance. When I heard about the law being upheld, I was hopeful. But now I’m not sure what is going to happen.”

Thompson said that until the state-based exchanges go into effect, small businesses and independent contractors can use tax credits to help offset health insurance costs, thanks to the act.

“Small businesses and the self-employed are eligible for a 35 percent tax credit on the premiums they pay now,” Thompson said.

He predicts that the overall cost of health insurance policies will decrease after the state exchanges are set up in 2014.

“Premiums should decline, and some of the other provisions about the way risk is rated for pre-existing conditions will make it easier for those policies to get affordable,” he said.

For the next two years, though, real estate agents and brokers will have to continue to pay for high-priced coverage or go without.

In the wake of the Supreme Court’s ruling, some agents are still scratching their heads over what the health care act will mean.

“We know there is going to be a tremendous change for people like myself,” Maldonado said. “But it is still a big question as to how exactly it will change. I know in a way it will help us, but we have to find out what will really happen.”

BAUGHMAN can be reached at [email protected].