As 155 million people get their health insurance through an employer-sponsored plan, employers are under a lot of pressure to choose a good plan.
No matter what industry you’re in, you can’t bank on having a young and healthy workforce forever. Even if you’re a young tech outfit, eventually people will get sick, have kids, and need access to the best small business health insurance.
Choosing the cheapest plan isn’t always the most cost-effective plan. Offering a poor benefits package will keep you from getting ahold of the best talent and keeping them around.
It will mean that your employees will foot the bill for a high deductible and might opt for their own plans, driving low enrollment that costs you more.
If you’re interested in finding the best small business health insurance plan for your team, get to know some of the basics.
Do You Want Group Health Insurance?
There are two main categories of health insurance that an employer can offer.
When you offer a group health insurance plan to your employees, you’re offering to split the cost with your employee. You’ll be required to contribute a minimum percentage of the cost in order to maintain the plan.
Potential employees are attracted to group health insurance plans because it often extends to dependents. That means that even employees with kids in college might be able to cover them while they’re in school.
For your small business, you can contact a broker or buy your insurance online.
Look into the Small Business Health Options Program or SHOP plans that are offered by the ACA marketplace near you. You might be able to get a good deal that serves all of the needs of your employees.
Given that the most basic health insurance plans cost hundreds of dollars a month, your employees will appreciate this option. Even if you don’t buy the best small business health insurance plan, they’ll be paying less and getting a better plan than they would on their own.
Be sure your HR department is well trained in whatever plan you choose so they can answer basic questions to your employees.
Would You Prefer To Subsidize Individual Plans?
The other category of health insurance plans available is the individual health insurance plan.
This is a policy that allows more freedom of choice. If you’re a small business that can’t afford to help pay for anything but the most basic plan, this will allow employees to get the services they need.
While your employees might end up paying slightly more out of pocket, they won’t be confined by a limited plan.
Since the Affordable Care Act went into place, there are no more restrictions on current health status. People who have more severe issues might end up needing a more comprehensive plan than younger employees in stable health.
Through this program, you can have premiums reimbursed to employees for their individual plans. This will be similar to how you contribute to a group plan, but leave your employees to choose their plan.
Because individual plans vary by employee, it could be just a couple of hundred dollars a month before premium tax credits or it could be into the thousands. When employees need to cover their children and dependents, the prices will go up.
Since most people are eligible for tax credits, many pay less than $100 a month for their health insurance plans.
Check out the guides available if you want to learn more about the kinds of plans available.
Once you’ve chosen the category of coverage, it’s time to choose the type of plan to offer. There are 4 major types of group and individual plans. They each have their pros and cons.
1. PPO Insurance plans
PPO stands for Preferred Provider Plan and is the most commonly purchased plan.
Under this plan, there are a set number of providers that are chosen by the insurance company when you opt into the plan. You’ll need to choose your provider from this list or else pay a higher premium to see them.
Seeing the approved providers allows claims to be paid at the highest level possible, sometimes requiring nothing out of your pocket. Providers similarly opt into working with these insurance companies for the promise of a steady stream of patients and services paid for.
While providers might make less from the insured patients, the access to the number of patients is why they choose this path.
2. HMO Plans
Health Maintenance Organization plans offer a more limited number of providers but they often will work exclusively with the insurance you get.
You start off by choosing a primary care physician. This is who you’ll visit for all of your general health needs. If you think you need to see a chiropractor, urologist, or any kind of specialist, you’ll have to visit your primary care doctor first.
They will then refer you to the specialist who will likely be on the same network and covered by your insurance. If they’re not, you could be paying a high bill out of pocket.
3. HSA Plans
A Health Savings Account is a type of bank account where your employer will automatically dump a portion of your paycheck, tax-free.
These funds are to be used specifically for medical expenses. This means that you’ll have money ready for emergencies and medical procedures.
These are usually connected to a PPO plan that works in tandem with an HSA provider.
4. Indemnity Plans
Under these plans, you can see any doctor or visit any hospital you’d like. Your insurance company will pay a set amount in response to the charges. You may have to pay some amount up front and then apply for reimbursement.
The Best Small Business Health Insurance Plans Offer What Employees Need
To choose the best health insurance for small business owners, ask around your company.
If you’ve got a small enough office, you should be able to put together a list of essential services your employees need. Rather than guess or overpay for services employees don’t need, check with them.
Rather than skimping on health insurance, check out our guide for how to cut business costs this year.