How Does Small Business Health Insurance Work?
As an individual working in the healthcare industry, you have an understanding of how health care works, and although you’ve dealt with a lot of insurance yourself, eHealth is here to be your on-call group health insurance expert. Let’s start off with explaining who qualifies for small business health insurance, also known as group health insurance plans.
Health insurance for a number of employees that make up small businesses is often referred to as group health insurance. To buy a group health insurance plan, there are a few basic things you need:
- Proof of Business. You need to prove to health insurance companies that you are a legally recognized small business. In order to prove that your medical practice is actually a small business, you’ll need to have a document like a current business license, articles of incorporation, or your most recent full business tax return.
- One employee besides yourself. Your business must be comprised of yourself, and at least one other full-time equivalent employee (some health insurance companies call this a common law employee). For group health insurance plans, full-time employees are defined as any staff member who works at least 30 hours a week for more than 126 days a year. The exact definition may vary by insurance company or plan. Keep in mind that if your only other employee besides yourself is your spouse, then your small medical practice office will likely not qualify for a group health insurance plan.
After your medical practice office has met the qualifications for enrolling in a group health insurance plan, it’s important to understand the basics of how this type of insurance can work for your medical office.
Preparedness Checklist Overview for Your Healthcare Office:
- Know that you need at least one full time employee other than you or a spouse working at your small medical office in order to qualify for a small business group health insurance plan.
- Have your tax forms on file that explain what type of business your small medical office is. The table below shows which tax forms each type of business typically files.
| Business Type | Tax Form |
|---|---|
| Sole Proprietorship | Schedule C - Form 1040 |
| Partnerships/LLP | Schedule K-1 - Form 1065 |
| S-Corporation/LLC | Schedule K-1 - Form 1120S |
| C-Corporations | Tax Form 1120 w/Schedule 1125E |
Finding and enrolling in a group health insurance plan for your small healthcare office shouldn’t be difficult with eHealth.
How long does it typically take to get a group health insurance plan?
If you have key information about your small health care office on hand as outlined above, it should only take a few minutes of your time depending on what insurance company you plan to purchase from.
Our streamlined online application guides you through the process of providing all the information the insurance company will need for you to apply for a group health insurance plan. After you’ve done your part by providing the necessary forms for the insurance company, and your employees have each declined or accepted coverage, your application will be submitted for approval.
It usually takes a few days for the insurance company to review and approve applications, so your small healthcare office shouldn’t have to wait long to get coverage under a new group health insurance plan. In some cases, the review and approval process may take longer, but your account manager at eHealth will notify you about updates throughout this process and help answer any questions that come up. Once approval is complete for your small health care office, expect to see an email from eHealth.
Small Business/Group Health Insurance Vs. Individual & Family Health Insurance
As a medical office, you would be purchasing group health insurance to cover all of your employees that wish to be on the plan. See the graphic below to see some basic difference between these two types of health insurance plans.
Keep in mind, if your medical practice has 50 employees or fewer, you are not typically required to provide coverage under federal law. If your healthcare office does not offer group health insurance, your employees may need to shop for individual or employee health insurance themselves. This will likely result in higher premiums per individual, since the cost of premiums will not be split between employer and employee and, in some markets, the per-person premiums for individual and family plans may be higher than for small business/group plans. As the owner of a medical practice office, you may also miss out on tax incentives for some small businesses that offer group health insurance.