Small Business Health Insurance 101

Chances are, if you’re reading this article, you’re a small business owner trying to decide whether or not to invest in health insurance for your company. It’s a big question that requires a bit of research, and the right information to ensure you pick the best plan.

Click here to learn why offering health insurance can give you an edge over the competition.

Read on to learn the fundamentals of small business health insurance and ways you can be sure you’re picking the right carrier and policy for your employees and your business.

Who qualifies for small business health insurance?

There are three key elements carriers look for to determine eligibility. (It’s worth noting most small businesses meet these requirements.)

      1. Registration as a business in your home state
      2. Two or more full-time employees, one of whom has a W2 (besides the owner)
      3. Payroll records for salaried employees as well as tax and ownership documents for the owner


What does health insurance cover?

Health insurance plans are legally required to cover any legitimate medical condition—big or small. A legitimate medical condition includes everything from a doctor’s visit when you’re sick, to major surgery. In addition, the ACA requires all insurance plans to cover ten essential health benefits. You can see them here.

What does health insurance NOT cover?

There are three procedures most insurers typically won’t cover. These include cosmetic surgery, weight loss programs, and long-term care. There are also procedures seldom covered, but sometimes will have limited coverage. These include infertility treatments, bariatric surgery, and hearing aids.

What should I consider when selecting a plan?

There are a lot of policies to choose from, so it’s important to assess the specific needs of your business and employees before diving in. Ask yourself:

      1. What coverage do my employees need based on their medical histories?
      2. Which kinds of doctors do my employees want and need?
      3. Are my employees’ doctors in a network offered through the plan?
      4. How much do I want to spend?


What types of health insurance are available to small businesses?

There are a variety of plans suited to small businesses, but we’ll cover just a few here. These include EPOs, PPOs, HMOs, HSAs, and a combination of these plans. Generally, both public and private plans use a managed care model whereby a private insurer manages and oversees the administration of services, the quality of the care, the reimbursement method, the provider network, and rules like prior authorization.

What will health insurance for my small business cost?

It can be difficult to estimate how much health insurance will cost. Costs vary dramatically depending on your particular business. According to a 2018 study by the Kaiser Family Foundation, employers paid an average premium of $6,896 per full-time employee. Employers covered around 80 percent, with employees covering the remaining 20 percent.

Most plans require employers to pay a minimum of 50 percent of each enrolled employee’s premiums, but many employers pay more than that. According to the Kaiser Family Foundation, covered workers contribute an average of 17 percent of the premium for single coverage and 28 percent of the premium for family coverage. That leaves the remaining 83 percent of single coverage and 72 percent of family coverage for the employer to pay.

How do I find health insurance for my small business?

There are several ways to identify the right health insurance for your company. Most people use one (or more) of three avenues.

      1. Work with a broker: Having a broker will save you time and effort. This person will help with selecting a provider, navigating paperwork and coverage requirements, and much more. There is no cost to you,  any commission or referral fees will be paid by the carrier.
      2. Reach out to insurance companies yourself: This is a good option for those who do their own research and feel prepared to make their decision without the help of a broker.
      3. Use SHOP: The Small Business Health Options Program is the federal health insurance exchange database. It allows you to find health insurance in your state, select from different-tiered plans, and get tax credits of up to 50 percent of premiums.


Should I offer health insurance?

If you’re asking yourself when the right time to start offering health insurance is, the answer is right now! Most potential employees consider benefits like health insurance a non-negotiable requirement, and not offering it can mean losing top talent to competitors.

The decision to invest in health insurance can be daunting, and hopefully this article has given you a better understanding of why and how to move forward. And remember you’ve already done the hardest part—starting your business. Health insurance is just another bump in the road.


Interested in learning more? Contact your agent or call CGHC at 855-494-2667 for more information or a quote.






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