Stress-Free Guide to Finding Health Insurance for Small Business Owners
Published on January 10, 2018
The worth of health insurance for small business owners
Before outlining a health insurance guide for business owners, let’s take the time to understand how valuable health insurance for small business owners can be.
Health insurance can help you financially—it can save you money by giving discounted rates on medical care, protect you from unexpected medical costs (such as hospitalization, and protect you from tax penalties.
Health insurance for your health—this one might seem obvious, but there are plenty of perks that come with health insurance for small business owners that you may have not even considered. Not only will you have access to quality health care, but you also have the opportunity to take advantage of preventative care and annual checkups.
Health insurance for business protection—having a group health insurance plan available to your employees could help you hire and retain valuable employees. Health insurance can also ensure that you are safe from medical expenses hindering your ability to run your small business.
Simple health-care guide for business owners
- Assess your needs: ask yourself: who will be covered under this group plan? Know your employees and their needs. You might offer more than one plan, but choosing the options should be done with employees in mind.
- Know the vocabulary: when researching health insurance for small business owners, if you don’t know the terms being talked about, it might be hard to know what you’re purchasing. Here’s a list of health insurance terms you may find helpful. These terms refer to plan members – in other words, you and your employees.
- Premium: the amount you pay to the health insurance company each month for coverage. As an employer, you will typically share this cost with your employees if you buy a group plan.
- Deductible: the amount you (as a plan member) may be required to pay per year before insurance kicks in and pays for your covered medical claims for the rest of the year.
- Copayment: also known as a “copay”, this is the specified amount you pay out-of-pocket for a medical service.
- Coinsurance-: the percentage you may have to pay for covered services after you meet your deductible requirement.
- Maximum out-of-pocket cost: a set limit to your financial liability. Once you have paid a certain amount out-of-pocket, the insurance company pays the full amount for any services needed for the remainder of the year. Your premium most likely does not count towards this, but your deductible, coinsurance, and copayments typically do.
- Compare costs: use a licensed insurance broker like eHealth to get quotes and research health insurance for small business owners. You can see various plans from different insurance companies side by side, and compare their prices and services.
Last few details about health insurance for small business owners
Now that you have a simple guide to buying health insurance for small business owners, you can buy a plan. Before you buy, here are a few more things to keep in mind.
First off, you should understand health care reform and what it means for you. The Affordable Care Act (ACA, or Obamacare) requires qualifying health insurance to be ACA-compliant, or you might face tax penalties. Not all employers are required to offer health insurance. For example, if you have fewer than 50 employees (or fulltime equivalents), you are generally not required to offer group health insurance at all.
Maybe you’re thinking Why buy insurance at all if I have fewer than 50 employees? Even though it is not required by law, there are benefits providing health insurance options. First of all, you might qualify for a tax credit by offering health insurance to your employees if you have 25 or fewer full-time employees. On top of the money you could save, health insurance also might foster a sense of trust within your company and might help with hiring top talent and keeping them around.
Please note that Obamacare (the ACA) might be repealed or revised after this article is published.