Health insurance is generally optional for smaller employers but is critical to most employees. That’s why employers of all sizes should take care when choosing the right business health insurance plans.
Benefits are essential in an employee compensation package, and health insurance plans are the crown jewel. However, before you can choose the right health insurance plan for your business, there are some things that you need to know.
In this blog, I’ve highlighted the benefits of offering employees group health insurance plans and the difference between group and individual health insurance. I’ve also included tips on choosing the right health insurance plan for your small business.
Read more: Insurance Basics: Understanding Health Insurance
What Are the Top Benefits of Offering Health Insurance to Employees?
The top benefits of offering health insurance to employees include:
Attracting and Retaining Talent
Depending on competitor offerings, health insurance can be crucial for attracting and retaining qualified employees.
The Small Business Health Care Tax Credit
If you have fewer than 25 employees and purchase insurance through SHOP, you may qualify for the federal tax credit known as the Small Business Health Care Tax Credit.
Tax Advantages
Employers can deduct contributions toward employee health insurance from their taxes, effectively lowering costs. However, you can deduct the full amount from your health insurance premiums if you are self-employed.
Avoiding Penalties
Employers with 50+ full-time employees must provide affordable health coverage through their health insurance program to avoid paying penalties.
Read more: Lower Prescription Costs with Discount Prescription Programs
Group Purchasing Power
Employers can provide employees access to group insurance rates, potentially lowering individual insurance plan costs. Small businesses can also use the well-known Small Business Health Options Program (SHOP) for coverage.
Employee Wellness
Affordable health insurance supports preventative employee care, helping to maintain employee health and limit absenteeism due to serious illnesses.
What’s the Difference Between Group and Individual Health Insurance for Employees?
Group health insurance is generally provided through employers, covering employees. In contrast, individual health insurance is bought directly by individuals from insurance plan providers, offering personalized health coverage outside of employer-sponsored health insurance plans.
Read more: Negotiating Lowering Medical Bills: What You Need To Know
How Do I Choose the Right Health Insurance Plan for My Small Business? Tips
Below are tips on choosing the right health insurance plan for my small business.
- Assess Employee Needs: Evaluate your company size and workforce demographics. Use surveys to gather information on employee healthcare preferences and analyze workplace health data while protecting confidentiality.
- Analyze Coverage Options: Research different plan types, including:
- Exclusive Provider Organizations (EPO): See specialists without referrals and some out-of-network emergency care.
- Health Maintenance Organizations (HMO): Lower deductibles with referrals required from primary care physicians.
- Point of Service Plans(POS): Combines features of HMO and PPO; preapproval for specialists.
- Preferred Provider Organizations(PPO): Offers flexibility for in- and out-of-network providers, but higher premiums.
Read more: How to Expand Your Reach and Find New Healthcare Opportunities
- Evaluate Costs: Compare premiums, deductibles, copayments, and coinsurance. Aim for a plan that effectively balances costs and health coverage.
- Research Administration Support: Look for plans with easy administration, responsive customer service, and online tools for claims and provider directories. Ensure compliance with legal regulations.
- Implement and Review: Effectively and accurately communicate plan details to employees. This helps them fully understand how to use their insurance. Regularly review and adjust the plan to meet changing employee needs and satisfaction.
Read more: Top Skills Every Pharmacy Benefit Manager (PBM) Should Master
The Wrap-Up On Choosing the Right Health Insurance Plan for Your Business
There is no right or wrong answer regarding affordable health insurance for businesses, tiny businesses because there are many variables to consider.
A licensed insurance broker can list the pros and cons of each model and help you develop a strategy that works best for your company and employees.
Contact me today to learn more about your small business health insurance coverage options.
