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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

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Forming a group for health insurance

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If you notice an error or are in doubt, please send a new question by email or ask for an update. Email

Q: I am self-employed and starting a new job for a private school. The school does not offer Health Insurance and does not have any employees. All workers are self-employed contractors (teachers & administrators). Can the contractors form a Group and purchase Health Insurance on that basis rather than all maintaining individual plans? There are currently 6 contractors that would comprise the group.

A: Yes, you can do that but realize that the perception of better health insurance available through group plans vs. individual insurance is largely a myth. A few of the unhealthy applicants will benefit, but the majority of health group members wind up paying more for coverage as compared with what they could have obtained on their own without the group. The real advantage of obtaining health benefits though an employer-sponsored group is the potential to receive all of the benefits tax free. Independent contractors qualify for the same tax advantages as employees for this purpose. offers assistance with the design and set up of this type of health plan for a flat fee of $150. Any type of health insurance may be used.


More resources:

Freedom Benefits small business health plans Forming a group for health insurance (2)