What is the Costco health insurance marketplace?

Costco started in the group health insurance market by partnering with Aetna, but the system has since changed to offer access to multiple health insurance companies. The Costco business health insurance marketplace works with Custom Benefit Consultants (CBC). Costco Insurance Agency, with CBC, helps to connect business owners with health insurance plans for their employees.

The marketplace provides business owners with access to medical, dental, vision and other group benefits that they can offer to their employees. Many different insurance companies offer these, and availability varies by location.

Costco Insurance Agency doesn't underwrite plans, collect premiums or pay claims. It acts solely as an agent.

Costco health insurance benefits

Costco members who are small business owners can choose 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."

So what health insurance plans are available through Costco? 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," Bahl says.

The 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 25% in plan costs, for example.

How the Costco health insurance process works

So, how do you get Costco health insurance for your business? Shopping for large or 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," Bahl says. "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 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," Bahl says.

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

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," Bahl says. "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 says.

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 says.

How much is Costco health insurance?

The cost of a group health insurance plan through Costco will vary based on several different factors. They include the type of plans you choose, what options – like dental and vision – you decide upon, and the size of your company.

The health insurance company you choose to work with will also affect the cost. Costco’s role is that of an agency, which means it partners with health insurance companies and help you find the right choice for your business. Costco doesn’t determine the cost of health insurance through the marketplace.

What health insurance plans are available through Costco?

The availability of plans will vary from state to state and company to company. The best way to find out what plans are available for your business is to request quotes through the CBC website.

How does Costco health insurance help business owners meet requirements?

You may be required to provide health insurance coverage to your workers by law, but you should consider it even if you aren’t.

"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 says. "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,” Bahl says.

Costco’s health insurance marketplace makes finding coverage for your employees easier. Whether you’re required to or not, providing health insurance can make working for your company more appealing to potential employees and help retain the ones you have.

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COBRA

The Consolidated Omnibus Reconciliation Act, better known as COBRA, allows you to stay on your former employer's health insurance plan to bridge the gap until you get new coverage. COBRA is expensive, as you will pay the full premium without help from your employer. It should be considered a short-term solution.
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You may qualify for Medicaid based on your income. Guidelines for eligibility differ by state. To find out if you qualify in your state, contact the local Medicaid office.
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You can stay on your parent's health insurance plan until age 26 under the Affordable Care Act. For most people, this is the cheapest option. A dependent usually costs less to insure than a spouse or an individual.
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Health insurance through your employer is generally the most affordable option since employers pay a large portion of the monthly premium. If an employer-sponsored plan is available, it's likely the best choice. You may have more than one plan option to choose from.
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Preferred-provider Organization (PPOs)

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Preferred-provider organization (PPOs) plans are the most common type of employer-based health plan. PPOs have higher premiums than HMOs and HDHPs, but those added costs offer you flexibility. A PPO allows you to get care anywhere and without primary care provider referrals. You may have to pay more to get out-of-network care, but a PPO will pick up a portion of the costs.
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Health maintenance organization (HMO)

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Health maintenance organization (HMO) plans have lower premiums than PPOs. However, HMOs have more restrictions. HMOs don't allow you to get care outside of your provider network. If you get out-of-network care, you'll likely have to pay for all of it. HMOs also require you to get primary care provider referrals to see specialists.
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High-deductible health plans (HDHPs)

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High-deductible health plans (HDHPs) have become more common as employers look to reduce their health costs. HDHPs have lower premiums than PPOs and HMOs, but much higher deductibles. A deductible is what you have to pay for health care services before your health plan chips in money. Once you reach your deductible, the health plan pays a portion and you pay your share, which is called coinsurance.
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Exclusive provider organization (EPO)

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Exclusive provider organization (EPO) plans offer the flexibility of a PPO with the restricted network found in an HMO. EPOs don't require that members get a referral to see a specialist. In that way, it's similar to a PPO. However, an EPO requires in-network care, which is like an HMO.
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You should compare individual insurance plans, including those on the health insurance exchanges created by the Affordable Care Act (ACA). ACA plans have no restrictions on pre-existing conditions and must include certain coverage basics.
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The Affordable Care Act created insurance exchanges that allow people to compare plans. The health law also requires insurers to accept everyone and not charge them exorbitant rates. People who make below 400% of the federal poverty level qualify for subsidies to help pay for an ACA plan.
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These plans have lower monthly premiums and higher out-of-pocket costs
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Silver plans provide a good balance of monthly premiums with out-of-pocket costs. Coinsurance is 70% with a silver plan, meaning you will pay 30% of the costs after your deductible is met, up to the out-of-pocket limit. Silver plans are a good choice for people who are in generally good health but don't want high out-of-pocket costs if something goes wrong.

Bronze plans are a popular choice with those who value low monthly premiums and are willing to pay more when they need care. Coinsurance is set at 60%, meaning you will pay 40% if you do need care, up to the out-of-pocket limit. Bronze plans are good for those who don't expect to need many services outside of preventative care throughout the year.

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The Affordable Care Act created insurance exchanges that allow people to compare plans. The health law also requires insurers to accept everyone and not charge them exorbitant rates. People who make below 400% of the federal poverty level qualify for subsidies to help pay for an ACA plan.
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ACA platinum plans have the highest monthly premiums, but the lowest out-of-pocket costs. You'll pay more monthly in return for lower deductibles, copays and coinsurance amounts. Coinsurance with platinum plans is 90%, which means you pay 10% after the deductible, up to your out-of-pocket limit. Platinum plans are good for those who anticipate a lot of medical needs throughout the year.

Gold plans cost a little less than platinum plans, and come with higher out-of-pocket costs. The coinsurance amount on a gold plan is 80%, which means you pay 20% after the deductible, up to your out-of-pocket limit. A gold plan is a good idea if you think you'll need a lot of care throughout the year, but don't want to pay platinum premiums.

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Frequently asked questions: Costco health insurance

Is Costco health insurance good?

Costco doesn’t provide health insurance directly. Costco’s insurance agency partners with CBC, which works with various health insurance companies. Research each company offering quotes to learn about their reputations before you buy.

Who is eligible for Costco health insurance?

To be eligible for health insurance through CBC, you must have an active Costco membership. You also need to be a small business owner and reside in a state participating 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.

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