Learn what options are available for affordable group health plans.
If you are an employer or entrepreneur, you may be wondering how much the cheapest small business health insurance is. After all, it’s a smart move to consider all of your options while keeping in mind your budget and cost preferences.
While the cost of a group plan ultimately depends on a variety of factors, you may be able to find cheap health insurance for your small business that could be more affordable than purchasing health insurance by yourself.
Continue reading to learn about how you can find the cheapest small business health insurance out there.
The cheapest small business health insurance may be more affordable than individual coverage
According to a recent eHealth study, the average per-person costs of small business health insurance are lower compared to individual health insurance.
- The average premium per-person through a small business plan was 7 percent lower than the average premium for an individual plan in 2018.
- The average individual deductible per person for small business plans was 31 percent ($1,438) lower than the average deductible for individual coverage in 2018.
Due to the advantage of having a larger risk pool (larger number of people enrolled in a medical plan, who help to better spread out the cost of risks for the insurer), a group plan can be a cheaper health insurance option for a small business than an individual plan bought by each individual employee and employer.
While it probably comes as a pleasant advantage that small business health insurance may already be cheaper on average per person than individual coverage, it’s still good to know some tips and tricks to finding the cheapest insurance that still meets your group’s health care needs.
What factors can help make small business health insurance more affordable?
All health insurance plans have different specifications and features, and insurance costs will vary among different companies. Finding the cheapest small business health insurance for your organization usually depends on a variety of factors. These considerations may include:
- Your small business’ location
- The number and ages of your employees
- The type of group plan coverage your business wants
- Extra health benefits you may include, like dental or vision plans
According to the Kaiser Family Foundation, insurers cannot look at employee health when they set rates for Affordable Care Act (ACA) plans, as per the policies of the ACA; however, this is only true for ACA plans, since short-term health plans can look into your health and turn down applicants or charge more based on health status or pre-existing condition.
Beyond considering the price of group plans, small businesses may also need to take time to administer health plan benefits or outsource the administrative side to a third party.
How do plan types contribute to cheap health insurance?
From the perspective of minimizing costs, the cheapest small business health insurance plans generally tend to be plans with lower monthly premiums and higher annual deductibles. This is usually because your primary cost from month to month would be your premium, unless you require medical care; in that case, the cost of those health services would then be added to your monthly expense. On the other hand, if you or your employees require frequent doctor’s visits, medication, and various health care services consistently, it may be financially smarter to pay for the high premium and benefit from the access to care after reaching your deductible.
If you or employees require more regular access to medical care though appointments or prescription medications, then a high premium, low deductible plan or a plan with affordable copayments may be a more cost-effective and cheaper option in the long run depending on your health care needs.
Reviewing plan types can be an effective way to select the cheapest small business health insurance. While HMO plans generally tend to have lower monthly premiums and out-of-pocket costs than PPO plans, you may be surprised to learn that many small business owners also chose POS plans in 2018, according to a recent eHealth study.
In fact, POS and HMO plans account for almost three quarters of all group insurance plans selected in 2018.
This may be due to both the lower premiums of HMO plans and the greater flexibility of POS plans (which combine features found in both PPO and HMO plans).
How do plan metal levels contribute to cheap health insurance?
Metal levels refer to the actuarial value (AV) of a health plan, meaning the percentage of total average costs for covered benefits that the health insurance company will pay.
For instance, a Silver level plan has a 70 percent actuarial value, which means that the insurer would pay an average of 70 percent of all of the plan’s medical costs, and you would be responsible for paying 30 percent of covered medical expenses until you reached the plan’s out-of-pocket maximum limit.
While a Bronze level plan may be a cost-effective option as you shop for the cheapest small business health insurance, it may be worthwhile to consider the benefits of other metallic heath plan levels.
A recent eHealth study found that small businesses decided to choose Silver and Gold metal level plans by a significant margin in 2018.
Ultimately, just because a plan is the cheapest does not always mean it will be the best fit for your company’s needs. As a small business owner, be sure to consider the specifications and cost structure of each plan, as well as consult with your employees to find out what they would want in a group plan.
eHealth can help you find affordable insurance
If you are looking for the cheapest small business health insurance, eHealth can help you find affordable options that work within your budget.
With eHealth, you can quickly find and compare free quotes for group plans based on your cost and coverage preferences, while benefiting from a great selection of the top insurance companies available in your area.
Visit eHealth.com today or speak with one of our licensed health insurance agents to discover affordable health insurance solutions for small businesses.
This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.