As a small business owner thinking about how to offer small group health insurance, you have a few concerns. You want coverage that meets the needs of your employees’ but without costing a fortune for you or them.
And you probably have a number of questions concerning recent health insurance laws and how they might affect your business. Then there are the questions about what kinds of group health plans are available and the best way to apply for group health coverage.
We can help you with all of these questions and will address some of them here, but one thing is certain: the costs have increased over previous years.
Affordable Health Care Keeps Getting Less So
A Kaiser Family Foundation survey found that the average annual premium for families increased 5 percent in 2019. This works out to almost $21,000, with workers paying and average of $6,015 each year and their employers the rest.
These increases were supported by the National Business Group on Health, which surveys large employers, and found that the total cost of health benefits is expected to rise 5 percent in 2020.
A 2019 article in The New York Times noted,
“Adding to the cost are higher deductibles — what workers must pay for their medical care before their insurance covers it. The average single deductible is now $1,655, double what it was a decade ago, Kaiser found.
One bright spot, according to a survey by the National Business Group on Health: More large employers say they are expanding their health plan offerings beyond high-deductible plans. Just a quarter of employers surveyed said they would offer only high-deductible plans next year, down from 39 percent in 2018, partly because of worker demand.”
Small business owners who want to provide insurance options for their employees have many concerns to consider. In addition to cost, however, there is also the question of what type of coverage is best for them and their employees, the initial set-up, annual renewal, and any on-going maintenance that may be needed.
Assessing Your Small Business Health Insurance Plan Needs
Selecting the best health insurance plan for your small business should be a well-informed choice based on both your own priorities, and those of your employees.
Let’s look at some basic questions that need to be asked in order to determine the overall needs of your employees and your business:
Who will be covered under your health plan?
Perhaps you need a plan that covers you and your family as well as employees and their dependents. If so, you’ll need to find a group plan with coverage that is affordable for all parties and can provide for the various medical needs of those covered. For many plans, it will be required that a minimum number or percentage of employees participate.
For example, we have found that 65 to 75 percent of eligible full-time employees must participate in a program and they cannot have Medicare, military benefits, or be covered under a spouse’s group plan.
How much of the premium cost-sharing can your business cover?
Group health insurance is employer-sponsored coverage, which means that monthly premiums are typically paid for by both the employer and employees. In California, as in most states, employers are generally required to cover at least 50 percent of the monthly premium for their employees.
At JC Lewis, we are able to offer contribution options as low as 50 percent and, depending on the insurance carrier, you can also choose between a monthly fixed dollar or percentage contribution. We offer flat dollar contributions as low as $100 monthly per employee.
Do your employees want higher premiums and lower deductibles, or or vice versa?
As you may already know, most health insurance plans with lower monthly premiums have higher annual deductibles, while plans with similar coverage but with lower deductibles often come require higher monthly premiums.
This is a difficult choice for many individuals but if, as a group, you and your employees tend to require few doctor visits, it might be better to go with a plan with a higher deductible so as to have a more affordable monthly premium. However, the deductible should still be reasonably affordable in case emergency services are needed.
What kind of benefits are more important to your employees?
In other words, are costs more critical than breadth of coverage? HIPAA and other federal privacy laws prevent employers from asking about an employee’s personal medical history, but you can inquire about which kinds of benefits are most valuable to them.
For example, is catastrophic coverage for serious illness or hospitalization sufficient (along with high deductibles) or are low deductibles and copayments more important? You will also want to get a consensus on the value of coverage for vision care and dental care.
Getting Professional Help With Your Small Business Health Insurance Plan
A group health insurance plan is a great way to keep and reward your valued employees by offering medical protection for them and their families. J.C. Lewis Insurance Services offers a variety of affordable and flexible options allowing companies to choose portfolios and contribution options suited to their specific needs.
We assist small business employers with between 1-50 employees with the set-up, renewal and on-going maintenance required. We are contracted to sell policies only from the leading carriers licensed to do business in California.