As any small business owner knows all too well, running and building a business can be a costly affair.
And being a small business owner in California can be particularly expensive. For example, only seven of the other 48 states in the nation have a higher corporate tax rate than California.
All of which can lead a small business owner to wonder if small business health insurance costs are worth it.
The Benefits Of Offering Benefits As A Small Business Owner
We have covered at some length in a previous article the reasons why health insurance is important for employees. And, understandably, no fair-minded small business owner would argue with them.
For example, employer-sponsored health insurance for employees means:
- Access to affordable health coverage
- Support for their overall well-being
- Improved morale and company loyalty
But it is a fair question for a small business owner to ask, “What’s in it for me?”
It’s a fair question because, if you have less than fifty full-time equivalent (FTE) employees you can legally choose to not offer health insurance coverage for your workers. And, unless you also have less than 25 FTE employees, you are not eligible for the Small Business Health Care Tax Credit.
So, from a purely fiscal stance, it would seem reasonable to avoid the added costs of health insurance for small businesses.
But there are numerous substantial benefits to employers who offer health insurance to workers:
Being more competitive
In the current job and hiring market, many if not most employers are struggling to attract good job candidates. And one of the most significant factors that can tilt the scales in your favor are the benefits offered.
If you opt to offer health insurance to your employees, you can use the number of premiums you pay as a valuable income tax deduction.
Better health insurance for yourself
Because of the tax breaks for small business owners who purchase a group health insurance policy, they often find that enrolling in the same plan is a better deal for them as well.
How To Choose The Best Health Insurance For Small Businesses
After a review of the several leading insurance carriers licensed to do business in California, we determined that the five best health insurance providers for small businesses are as follows:
Blue Shield of California
Blue Shield of California is the third-largest health plan in the state after Kaiser and Anthem Blue Cross. As a not-for-profit corporation operating only in California, Blue Shield of California offers coverage in the individual, small and large group markets. Blue Shield’s small group plans are well priced, however, business owners can only offer a full network or narrow network option, but not both networks.
According to BenefitsCafe.com, UnitedHealthcare offers small and large group medical insurance plans and allows small employer groups to offer HMO, PPO, and HSA plans with full, medium, and narrow provider networks, which is more flexible than most other California insurers.
UnitedHealthcare offers coverage in all 50 states and is a good fit for an employer with employees who reside in different states. Many UnitedHealthcare group plans include Virtual Visits, which provide for online health care and doctor consultations using computers, mobile devices, or tablets.
Aetna offers coverage to California employers in the small and large group markets. Their group plans are unusually flexible in that they allow employers to offer full, medium, and narrow network HMO networks to their employees at the same time.
Aetna’s competitive and affordable plans for small business employers also feature a number of wellness and funding options. Aetna Funding Advantage is a self-funded option to provide the benefits of self-funding to small businesses.
Kaiser Permanente is the largest health plan in California in terms of both revenue and membership. As a not-for-profit corporation operating in California, Kaiser offers small and large employer groups PPO plans. Kaiser is unique in that it promotes itself as a “comprehensive health care delivery system” through Kaiser providers.
Being the largest managed care organization in the state allows Kaiser to offer a significant number of affordable small business health insurance plans and options. In addition, many Kaiser Permanente HMO group health plans, HSAs, and HRAs have lower premiums, and their PPO plans provide flexibility when choosing doctors.
Anthem Blue Cross
Anthem Blue Cross is the California subsidiary of Anthem, Inc. and is a separate company from Blue Shield in the state of California. Anthem Blue Cross offers HMO, PPO, EPO, Health Savings Account (H.S.A.) compatible plans for small groups, large groups, and seniors.
Anthem’s PPO networks are extensive and include most doctors and hospitals. Anthem Blue Cross insures more PPO members in California than any other insurance company while offering integrated health care and intuitive online tools for employees.
4 Things To Consider When Choosing Health Insurance For Small Businesses
1. Your Purchase Options
You can buy a small-group plan directly from an insurance company, through a broker, Covered California, or the SHOP marketplace. You may qualify for the Small Business Health Care Tax Credit, if you buy a SHOP plan. SHOP plans can be purchased directly through the insurance companies, or with the help of a SHOP-certified broker.
2. All Plans Are ACA-Compliant
Effective as of January 2014, all new small-group plans are compliant with the ACA regardless of where you get the plan. In California, small-group rules apply to groups with up to 100 employees.
3. Employee Medical History Is Not a Factor
Health insurance providers cannot set premiums for ACA-compliant small-group plans based on the group’s medical history. In addition, premiums for older employees cannot be more than three times those for younger employees.
4. Plans Have Clearly Defined Benefits
In California, all ACA-compliant small-group plans must fit into one of the four metal levels and cover the ACA’s essential health benefits.
Your Local Resource For California Small Business Health Insurance
J.C. Lewis Insurance is a long-time, family-owned firm based in Sonoma County and we are expert California small business health insurance brokers.
We only offer California small business health insurance plans from leading health insurance carriers that are licensed to do business in California.
Along with the fact that we are experienced, professional, and local brokers, we are also licensed and certified by each of these insurance carriers. This allows us to offer coverage to individuals, families, and small group employers, in addition to Medicare supplemental and prescription drug plans for seniors.
As a small business employer, shopping for the best health insurance plan options for your employees, or for you and your family, means you are likely to have questions and concerns. We invite you to bring us your questions about health coverage insurance and want you to know that J.C. Lewis Insurance Services will help you find the right solution.