Group Health Insurance and Small Businesses
Attracting and retaining quality employees isn't always easy, especially for smaller businesses. Offering the right kind of benefits is a big part of getting the best people to work for you, but it's not true that only the big companies can offer good benefits. Small companies can also offer group health insurance to its employees. In most states, regulations have been passed to make sure that small employers can get coverage, and insurance carriers are required by law to offer group coverage to small businesses with between two and 50 employees. This varies somewhat from state to state, but in general, if you are a small business, an insurance carrier may not refuse to sell you a small business group plan. You must, however, keep at least the minimum amount of qualified employees on the group plan in order to continue to qualify for it.
However, even though the law may mandate that the insurer offer group coverage, there isn't very much in the way of regulations over the price they can charge. The premiums will vary from carrier to carrier, and also based on factors such as the age and health status of the individual employees, as well as any occupational safety hazards that exist, the nature of the business, and its location.
Despite the fact that health insurance costs are rising across the board, there are several options available for small businesses. Before making a decision, you'll want to decide on a few variables that will affect how much you will pay: what percentage of the premium do you, the employer, want to pay and how much should your employees pay? Do you want to provide a managed care (PPO or HMO) plan, which is usually less expensive, or an indemnity plan where you can choose your own providers? What extent of coverage would you like to offer, and how much deductible should there be? All of these factors will greatly influence the price you ultimately pay for health insurance for your small group.
Most businesses of any size require employees to make at least some contribution towards the premium. Another common option is to pay for most or all of the employee's premium, while requiring employees to pay for any dependent coverage. Your employer contribution will usually be fully tax deductible.
For very small businesses, you can get group health insurance for as few as two full-time employees. This means that a very small, family-run business can still get a health insurance plan. If you are self-employed and have no employees at all, you may not be eligible for a group health insurance plan, but you may instead be able to obtain individual policies more specifically designed for self-employed individuals.
There are enough options available, and a small business should be able to find a plan that suits its own budget and the budgets of its employees. You can start by comparing quotes online. Get at least three different quotes, because insurance rates often vary a great deal between carriers for the same type of coverage. If it's hard to find something in your price range, consider varying the options by examining different deductible amounts, and by considering a high-deductible insurance policy combined with a health savings account.
Information is for educational and informational purposes only and is not be interpreted as financial or legal advice. This does not represent a recommendation to buy, sell, or hold any security. Please consult your financial advisor.