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Small Business Health Insurance

Choosing the Right Health Insurance Plan for Small Businesses

According to a survey by the National Small Business Association, 87% of small businesses think that offering health insurance to employees is important for recruiting and retaining top quality employees. However, this can be difficult for smaller businesses, especially considering 72% of small business owners are the ones that are primarily responsible for handing benefit offerings.

To save time and ensure you are spending your money wisely, it is important to be fully educated on your health insurance plan options.

Price

The average monthly family per-employee cost of health insurance premiums for a small firm is $1,121.02 (as of 2014). For small businesses, making sure the price fits within the operating budget is crucial to success—especially for businesses that are just starting.

Factors that affect the cost of providing health insurance to your employees include:

-Insurance carrier

-Type of Plan (PPO, HMO, etc.)

-Network of Providers

-Location

-Contribution strategy

-Demographics of employees

Brokers that specialize in small businesses in the area can be very useful in helping to determine the best fit for your business based on your budget and needs. In fact, about 76% of small businesses purchase insurance through a broker because of this. Brokers can assist is shopping for the best price and help to find sizable tax credits, which are available to businesses with fewer than 25 full-time employees (calculate potential credits using this calculator).

 

Benefits Offered

When deciding on a health insurance plan, small business owners reported that benefits (after Costs) are the second most important factor in the decision process.

Just like business’ individual employee needs often differ. If you are deciding on group coverage for current employees, make a list of the specific benefits that are important to your employees (family coverage, prescription drugs, emergency services) to be sure you offer plans that satisfy all employees needs’ and budgets.

The most common benefits offered by small business include a PPO Insurance Plan, Dental Benefits, Vision Benefits, and a High-Deductible Plan.

Customer Service

Establishing a personal relationship with your insurance provider, whether that is with a broker or direct agent, is important for many small business owners. Research customer reviews in your area to find out how supportive agents are in times of need. Learn whether he or she is knowledge in the types of products you need and if he or she has experience in your businesses’ industry. Ideally, you’ll want an agent or broker that specializes in small businesses.

To learn more about healthcare options for your small business and how the Affordable Care Acts affects it, visit the Small Business Administration Resource Page, which provides valuable webinars and articles on tax credits and plans.