As a small business owner, you have an abundance of responsibilities and expenses that must all be met regardless of whether you are making a profit or not. This is why some small employers choose to forgo offering health insurance coverage to their employees. To them, it is simply another expense tied to a number of headaches.
However, while the law does not mandate that employers with 50 or less full-time employees offer sponsored health insurance, many of them do.
But what constitutes a “small business” in the realm of health insurance?
According to HealthCoverageGuide.org,
“Under federal law, small employers are guaranteed group coverage should they choose to purchase it, regardless of the employees’ health status. A ‘small employer’ is defined as a business with 2 to 50 full-time employees. Owners are generally counted as employees, so sole proprietorships with one employee usually fall into this category, as do partnerships without any employees (by definition partnerships have two or more partners).”
Although research shows that businesses with 50 or fewer employees are less likely than larger businesses to provide health benefits, there are a number of good reasons to do so.
For example, recruitment of talent is strongly influenced by benefits offered, especially health benefits. In fact, over half of employees say that health insurance is the most important benefit in terms of their job satisfaction, according to data from Clutch.co.
A 2016 Glassdoor survey observed that, “The factor with the single biggest impact on employee satisfaction was the quality of employer-provided health insurance plans.” Being offered affordable group health insurance is a core benefit highly valued by most of today’s employees.
The 2018 eHealth report on small business health insurance trends found that 66 percent of respondents said they offered small business coverage because it helps them recruit and retain top-quality employees.
While employer-provided health coverage is a benefit in recruiting new employees, it’s even more important for retaining them. As a recent survey showed:
- 46 percent surveyed said health insurance benefits was the deciding factor or a positive influence in choosing their current job.
- 56 percent of U.S. adults with employer-sponsored health benefits said that a key factor in deciding to stay at their current job was whether or not they liked their health coverage.
In addition to all this, employees who have and use their employer-sponsored health benefits tend to be healthier, happier and more productive.
How to Find the Best Small Business Insurance for Your Company
Assuming you are shopping for a group insurance plan, there are several different types of health plans available. The four most common are:
PPO Health Insurance Plans
Employees covered under a Preferred Provider Organization, or PPO plan typically must receive services from doctors or hospitals on the insurance company’s list of preferred providers.
HMO Health Insurance Plans
Health Maintenance Organization, or HMO, plans offer a wide range of health care services through a network of providers contracted exclusively with the HMO, or have agreed to provide services to members.
HSA-Qualified Health Insurance Plans
HSA-qualified plans are typically PPO plans designed to be used with Health Savings Accounts (HSAs), a special bank account that allows participants to save pre-tax money for future medical expenses.
Indemnity Health Insurance Plans
Indemnity plans allow members to direct their own health care and generally visit any doctor or hospital with a set portion of the total charges paid by the insurer. Employees may be required to pay for some services up front and then apply for reimbursement.
The plan type that is best for you and your employees depends largely on what you and your employees want, and how much you are willing to spend.
There are many differences even among the four most common health plan options, but the simplest approach is to compare different plans based on these three factors: benefits, price, and providers.
Benefits
Closely review the details of what’s covered and what’s excluded in specific plans. This doesn’t need to be exhaustive – focusing on the most important benefits, like these, will suffice:
- Doctor’s office visit copay
- Percentage of co-insurance
- Prescription copays for generic and brand-name drugs
- Out-of-pocket maximum (after which the insurance company pays 100 percent of costs)
Price
Compare the premium prices for each plan with similar benefits on a monthly basis. Typically, finding the lowest priced plan with the best benefits is the goal of small business owners. After you’ve made a few selections, your California health insurance broker can help you determine the best trade-off between benefits and price.
Providers
Knowing your employee’s preferences is important here. Ideally, the doctors or health care providers that you and your employees want are in the provider network of the plans you’re comparing.
Your Local Team for Small Business Insurance
As a small business owner, you understand the wisdom and value in the services of industry experts. It’s no different when it comes to small business health insurance.
As a family-owned and operated California health insurance agent licensed to do business in California, we specialize in medical insurance plans for small businesses, as well as for individuals and families, and people with Medicare.
At J.C. Lewis Insurance Services, we can tailor our recommendations to your particular needs since we are licensed with most major carriers in California. You save time and money, and we can quickly define your particular needs and recommend the best products and price to meet those needs.