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Choosing Small Business Health Insurance

The very term health insurance is often enough to make small business owners shake in their boots. This can often feel like one of the most stressful parts of running your own business. You understand why offering small business health insurance is a good thing for your employees and also your business, but you’re not sure where to even begin.

As a small business owner, you don’t have the same large buying power as larger enterprises. The Bureau of Labor Statistics reports that only 55% of employers with under 100 employees offer health insurance. This gap in coverage between large and small businesses is the result of a complicated, expensive insurance landscape.

However, this landscape is rapidly changing. Things are becoming easier for small business owners who want to offer affordable insurance to their employees. Why should you bother with health insurance as a US-based small business owner? Here are just a few of the leading reasons:

  • Tax credits and other tax benefits
  • Better recruitment potential
  • Increased job security
  • Healthier employees

In this guide for US-based small business owners, we’ll discuss how to get started with small business health insurance as well as how to find the best provider. Your employees will thank you, and you’ll quickly discover it’s not as complicated or as expensive as you thought it would be.

 

What You Need to Get Started

To get started, you’ll need a few things. Not only will you want to ask some questions about your budget, your timeframe to find coverage, and your requirements, but you’ll also want to gather some basic information about your business. You’ll need your business name, address, list of employees, payroll records, and Tax ID.

In addition, you’ll also need to provide what’s known as an employee census. This is a breakdown of your employee’s demographics. It includes things like names, ages, the number of dependents, and employee’s zip code. This is how your small business health insurance company will determine premiums and employees’ risk levels.

 

Comparing Health Insurance Plans

Now that you’re ready to start your search, let’s talk about how to choose the best plan. You’re looking for affordable health insurance plans that suit your employee’s lifestyles, so put them first when you consider the following questions:

 

  • What’s covered? First, think about what’s covered. You might choose a plan that offers a large range of services with a high monthly premium, or maybe you’ll choose the opposite for a lower monthly payment. It could help to talk to your employees about what they expect to pay.
  • What type of plan is it? There are four main types of plans: HMO, PPO, POS, and EPO. Each plan has different networks and requirements.
  • What is the provider network? What hospitals, doctors, and specialists are included in your health insurance network?
  • What choices will employees have? Most of the time, you want your employees to have a lot of choice about their own coverage and providers.
  • What are the costs? Finally, ask what premiums, deductibles, copays, and coinsurance payments you can expect with your plan.

 

Where to Find Small Business Health Insurance

You’re now ready to start your search. If you’re self-employed and have no employees, you’ll likely start your search in the Healthcare Marketplace. This is where you can access all the plans available to you in your region. If you do have employees, you have a few different options for securing a plan:

    1. Contact insurance companies directly. This is best if you already know which companies you want to work with that offer coverage in your area.
    2. Work with an insurance broker. An insurance broker can help you find the best deals, rates, and providers in your area.

 

  • Partner with an association. Recently, it’s become common for small businesses to join together to purchase larger group coverage at a more affordable rate. You might also choose to use a professional employer organization (PEO) to choose coverage as a larger group.

 

Successfully Choosing Small Business Health Insurance

Are you ready to choose the best plan for your employees? Your employees deserve the right coverage, and you’re in a position to provide just that with these tips and steps above. Insurance doesn’t have to be as complicated as it seems. Keep your employees in mind and just take each step one at a time.

Once you offer insurance, you gain a competitive advantage over other small business employers. You prove you really care about your employees, and you’ll reduce your turnover rate. Ultimately, this is a win/win you can’t pass up.

 

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