As a business owner, it is in your best interest to offer your employees a comprehensive benefits package, but how do you know what works and what doesn’t? Health insurance is a good place to start but there are so many options to choose from.
Offering the "right" health insurance plan is one of the most important decisions you can make as a business owner. Keeping employees happy and healthy will benefit you in the long run. But making sense of the complex health care system has become increasingly difficult for employers.
Choosing the right small business health insurance plan
Assess your needs.
First, determine what your small business needs in a health insurance plan. Consider the following:
Who will be covered? Consider the needs of your employees and their dependents to find a plan that will suit the diverse medical and financial needs of the group.
How much cost sharing can you afford? Premiums for small business health insurance are paid by the employees and the employer. Make sure to consider how much cost sharing makes sense for your business.
What kinds of benefits are important for you and your employees? While federal privacy laws prohibit employers from inquiring about an employee’s medical history, it’s important to ask your employees which types of benefits are important to them.
Compare small business health insurance options.
There are a lot of factors to consider when weighing your small business health insurance options. At eHealth, we recommend using the following 5 criteria to find plans that best match your needs:
Monthly premiums: Know what you and your employees will be able to pay on a monthly basis.
Deductibles, copayments and coinsurance: Ensure these types of payments will be manageable for you and your employees when you receive medical care.
Medical provider networks: If you already have a preferred doctor or facility, make sure they'll be included in your new coverage.
Prescription drug coverage: Use eHealth prescription drug comparison tool to see which plans cover costs of certain prescriptions.
Coverage add-ons: With Shop N Health, you can add things like vision and dental care to ensure your employees are fully covered.
Small business health insurance enrollment process
- Enrollment is the process of getting your employees and their dependents signed up for your new health plan. Once you've selected a plan, an agent can walk you through the enrollment process.
- During enrollment, be sure to answer all questions honestly and to the best of your knowledge. Though premiums may differ based on age and zip code of the individual, no employee will be declined coverage.
How does small business health insurance work?
Getting coverage through a small business health insurance plan can be more affordable than buying coverage by yourself. Here's what you need to know:
- Coverage is generally a guaranteed issue.
- You need at least two W-2 employees to qualify.
- You must contribute toward employee premiums.
- And you can shop for coverage at any time of the year.
Does my business qualify for a health insurance tax credit?
You may qualify for a tax credit that could cover some of the costs you pay for employees' premiums. This credit reimburses qualifying small businesses for up to 50% of the premiums paid toward health Insurance. Shop N Health can help you obtain your tax credit and find a small business health insurance plan that works best for you and your employees. In order to qualify:
- The average annual wage per worker must be less than $50,000.
- Your business needs to have 25 full-time employees or less.
- You need to contribute a minimum of 50% toward employee health coverage.
What type of plans are available?
Health Maintenance Organization (HMO): HMO plans offer affordable, comprehensive health coverage with relatively low out-of-pocket costs, but most care must be done in-network to avoid additional costs.
- Each member selects an in-network Primary Care Physician (PCP)
- Referrals from your PCP are often required to see a specialist.
- Out-of-pocket costs are predictable and often limited to low annual deductibles and copayments for doctor visits and other covered services.
- The number of providers in the HMO network varies by location.
Preferred Provider Organization (PPO): While premiums are often higher for a PPO than for an HMO plan, a PPOs typically offer larger networks and will give you more flexibility.
- Members don’t have to choose a PCP
- Members don’t need a referral to see a Specialist
- Members can choose any doctor or hospital regardless of whether the provider is in the plan’s network (costs may increase for out-of-network care)
- Out-of-pocket costs may include annual deductibles, copayments, and coinsurance for covered services
Point of Service Plan (POS): A POS health plan is a hybrid, containing features of PPOs and HMOs. POS plan premiums are often mid-range between HMO and PPO plans. However, POS network size varies by location.
- Members usually need to select an in-network PCP
- Members usually don’t need a referral to a Specialist to receive POS plan benefits
- Members can choose to use the plan’s provider network for some services and go outside the network for other services
- Members usually pay a small portion of the cost of covered services when they stay in the POS network