Employer-based health insurance wins. In 2017, employers covered 56 percent of the population in the U.S. A win for both employers and the employees.
As a small business owner who offers health insurance to your staff, you give them the gift of better health. Your benefit?
Healthy employees don’t just show up for work. They show up and seize the day. When that happens your business thrives.
Whether you’re a first-time buyer of renewing your current plan, you probably have questions. We have answers!
Read our 7 helpful tips for small business owners who want to give their employees the best health insurance options.
1. Learn About Health Insurance
Unless you trained as a health insurance agent or took a medical billing and coding course in school, you’re probably not familiar with health insurance terms. And it’s likely you don’t completely understand how benefits work.
You don’t need to be an expert but understanding the basics helps when you begin researching employee health insurance for small business. Don’t feel overwhelmed if you don’t know the lingo—the terminology and the acronyms. A quick search online should help.
As far as the rules and regulations, small business health insurance specialists can explain them in laymen’s terms. Don’t feel intimidated! Learning as much as possible puts you in a better position when you’re ready to look seriously at the various health plans and make comparisons between them.
Before researching health care plans, it’s a good idea if you know a few things about your employee group.
2. Get to Know Your Employees
You know your staff because you hired them, right? It’s true that you know some of their strengths and weaknesses as far as performing their job. You might even know if they get too many colds or have migraine headaches. After all, you’re the one they call when they’re not coming to work.
What you don’t know is how often they see their doctor. You don’t know whether they get an annual physical or get regular health screenings. Maybe no one in your group takes prescription drugs, or maybe most employees do use at least one prescription they refill on regular basis.
No, you can’t walk up to your employee and quiz them about their health habits, but you can get a general idea of the types of health benefits your employee group needs.
You know the age ranges of your staff. You also know their income levels. You may have an idea about their family size.
Keep in mind employees won’t be denied benefits or charged a higher premium because of medical history. But medical history, age group, and family size do figure in when you choose the health insurance plan.
For example, prescription coverage isn’t mandatory but if most of your staff use prescriptions regularly, coverage is important to them. Knowing the demographics of your staff will help you choose the best coverage options.
3. Survey Your Employees
Bring employees in on the insurance selection process by asking them for their ideas. You ask for votes when you plan the annual company party, why not do something similar for their health insurance?
Let your staff know you’re preparing for health plan renewal and appreciate their feedback on the current plan. You can include questions about whether they have a single or family plan. Provide a ranking system for how important things are such as premium cost, out-of-pocket expenses, choice of provider, etc.
Surveying employees doesn’t only help them feel included in major decision making. It also helps you determine their needs so that you look at the most comprehensive plans. Keep in mind your employees are unique and will have varying opinions on health insurance.
Like your employees, health insurance isn’t a one-size-fits-all product. When you start researching, you’ll find a variety of plans.
4. Learn About the Different Plan Types
If seeing HMO, PPO, and EPO makes you throw your hands up and say, “SOS,” you’re not alone. These are only 3 acronyms used by the health insurance industry and it can get confusing when you don’t know the difference between them.
Your insurance specialist knows everything about each plan but you should understand at least the basic differences.
Health Maintenance Organizations (HMO) generally only cover care from medical providers who contract with the HMO. A Preferred Provider Organization (PPO) also uses a provider network but normally have fewer restrictions when choosing providers.
HMO plans don’t offer coverage for out-of-network charges. PPOs typically do pay when you use a provider out-of-network, however, the benefit is lower.
EPO stands for Exclusive Provider Plan. EPOs are similar to HMOs because they use a care network and you can’t use a non-network care provider. The difference? EPOs are usually less expensive.
Once you pick a few plan types, compare the plan details for each one.
5. Compare Health Insurance for Small Business
Don’t make snap decisions about your company health insurance. Take a day or two and look at each option. Bring in another management level employee if you have one, or a trusted assistant.
Certainly, cost is a factor but so are plan benefits.
Go over the details of each plan. Look at benefits. Understand plan restrictions.
Affordable health insurance is a benefit you provide for your employees but make sure you don’t choose a plan that ends up costing them more in the end because they pay more out of pocket.
Check the plan documents for each one and make sure you have a basic understanding of the terms and limitations.
If you feel confused, call your insurance broker and go over your questions until you’re comfortable. Insurance is a major decision for a small business and one you will live with for the duration of the contract.
If this is the first time you’ve purchased health insurance, you may not realize you qualify for tax benefits.
6. The Small Business Health Care Tax Credit.
The Affordable Care Act includes a health care tax credit for small business owners.
If you qualify, you’re eligible for financial assistance through the tax credit. Qualification for the health care tax credit depends on the number of people you employ, wages you pay them, and the percentage of employees you insure.
Even if you don’t qualify for the small business health care tax credit, you should still qualify for tax deductions for your premium payment. Talk to your tax accountant if you have questions about whether your business qualifies for the credit.
Every small business owner enjoys maximizing tax benefits but there is one more tip you should consider when purchasing healthcare insurance.
7. Your Business Benefits
When you offer health insurance, you have an advantage in the marketplace.
Health insurance isn’t just a nice thing you do for your current employees. Employers who offer health insurance attract higher quality applicants. They also do a better job of retaining employees.
When you consider the cost of your health insurance plan vs. the cost incurred every time you recruit and train a new employee, insurance is worth the investment.
Questions about Health Insurance?
Thanks for reading our tips! Hopefully, they helped you answer some of your questions about purchasing health insurance for small business.
Take time and learn about health insurance including the various plans and the needs of your employees. Make plan comparisons. Don’t forget about tax credits.
Contact us for more information on current plans and options. We’re here for you!