Health insurance from your small business is one of the perks that employees look for. According to research conducted in 2015, Nearly four in five (79%) of employees would prefer new or additional benefits to an increase in pay. Another survey of benefits decision-makers and employees, found that
Therefore, there are clear indications that your small business employees are going to be more satisfied if you supply them with health insurance.
The most compelling reason employees prefer employer-based plans is that many medical providers stopped accepting individual plans after 2014. The individual plans, whether purchased directly through the insurance company or through Covered California for the subsidy, are the same as mandated by the ACA. The plans pay the doctors the same. A doctor may accept Anthem Blue Cross PPO if it is a small group plan but not accept it if it is an individual/family plan.
Assessing The Needs For Your Business’ Health Insurance
One of the first steps to ensuring your staff have the coverage they want is to assess their needs and wants against the cost to implement it. There is no standard insurance product, and the costs can vary depending on the size of the organization and what you offer. For instance, you might want to provide your staff with just one health insurance option as this would be easier to implement. However, some employees might want to be able to make their own choices which can make working out the insurance costs more complicated and also make it more challenging to implement.
Choosing The Option For Your Business
There are four basic options for setting up a plan. We can easily offer a combination of all of these plans, some of these plans or one for your company depending on your priorities and budget. These options are:
Managed Care (HMO) – Health Care Maintenance is when there is a prepaid health-care arrangement. Employees of your business are obliged to use doctors employed or contracted to the HMO and / or hospitals that are approved by the HMO. EPO is a form of an HMO because you have a designated network for medical services but can access an additional pool of doctors for second opinions and consultations only.
Managed Care (PPO) – Preferred Provider Organization is where there is an approved list of health care providers for the employee to choose from. The employee pays a ‘per visit contribution’ while the insurance company covers the rest.
Self Insurance – When the company absorbs all or a significant portion of the risk for the health issues of their employees. The paperwork is usually outsourced, but claims are paid by your company even if employees help pay premiums. This has some benefits (such as greater control), but it can increase costs in some cases. You may require ‘stop loss’ insurance if you choose this option.
Health Savings Account (HSA)– This is a program where an employee can setup an account to pay exclusively for medical bills. The contributions are funded with pre-tax dollars, offering employees tax savings and accumulations of funds that can earn tax-free interest. There are rules that attach to these plans that may be worth it to those in higher tax brackets and not so much for others.
Seeking The Necessary Information Out
It might be wise to speak to business contacts you know at networking meetings about what insurance they have. This can help you determine what is standard in the area and what reasonable costs are.
You should also set a budget in mind before you go and seek more information from any insurance provider, agent or broker. You need to ensure that what you are spending is affordable.
Next you need to speak to insurance agents and brokers. These individuals are useful as they can help you assess your needs and come up with the most affordable option within your budget. Brokers are also obligated to meet certain regulations that prevent them from mis-selling insurance.
Seeking a professional can also be reassuring as the range of options available can be daunting to the uninitiated and time consuming to analyze. Also how you implement these schemes to your employees can be challenging but a professional can help support you in matters like this.
Health insurance and benefits are highly desirable to your staff. They can be the difference between your key staff staying with your business or leaving. Setting up quality health care options might be the best investment for your small business. To do this is to determine the needs of your staff, the budget you can afford and what type of health insurance you want to implement.
Speaking to a professional insurance broker might be the best option to ensure that you get a good deal for your business.
Are you setting up health insurance in your small business? Do you need some support in setting it up?
Let us know in the comments.